1099 Pages from the CFPB and Links to Comment; Mortgage Debt Relief Act Expiration
I received a note yesterday from the CEO of a mid-sized lender.
"Rob, I have begun thinking that the
CFPB is the best thing that ever happened to my business. There is no way
anyone in their right mind would ever want to start a mortgage company from
scratch. The government is concerned about 'too big to fail,' yet its
regulators continue, through their practices, to promote exactly that. How
many new banks were established in 2011? I've heard rumors of 'none.' Today's
Proposal #1 (New Loan Estimates and New Closing Disclosures) and Proposal #2
(High Cost Mortgage Protections) are just more of the same thing that will
eliminate new lenders, and force smaller lenders to either join us larger
lenders or go away. 1099 pages of simplification? That represents job security!"
(More on the details of the CFPB's plan a few paragraphs down.)
And yes, the hiring continues. Down in New Jersey, 100% retail lender Oceanside
Mortgage Company is searching for a secondary marketing executive.
Recent GNMA pooling experience and sub-servicer oversight is a must.
Oceanside is a retail lender, licensed in 16 states and based in NJ funding
approximately $40 million per month of FHA loans. (The company's website is www.yourfha .com.) Oceanside is currently not
GNMA approved, but the candidate is expected to assist in gaining its approval.
The company will consider letting the candidate work remotely. If you know
someone who might fit the bill, they should contact Steve Stone at sstone@yourfha .com.
And I have been retained by an established lender in the California Bay Area
that is searching for an Underwriting Manager. The ideal candidate must
have FHA, VA, and all the other typical credentials, either live in Northern
California or be prepared to move there, and have adequate management
experience to assume a Vice President or Director role. The company expects to
fund more than $1.5 billion in 2012, and is licensed in six states. Resumes
should be directed to me at rchrisman@robchrisman .com,
confidentiality assured. (I am attending a conference in San Francisco for a
few days, and then will be in San Diego, and will respond when I can.)
Back on to the CFPB. Yesterday's commentary contained a link to its
employee salaries, and now we know why they're making the big bucks. It seems
like the CFPB is taking years to design two forms, but maybe I'm wrong - early
comments indicate that the forms are pretty straightforward, but it wants more
comments. Read Reactions Here. Here are the links to them: Estimate and Disclosure
The public has until Nov. 6 to weigh in on the changes to the mortgage
And we have until Sept. 7 to weigh in on the expansion of the definition for
What turned heads was the 1099 page document focused on the new
rule, proposed by CFPB, that would provide special protections from fees and
risky loan terms for consumers who take out mortgages that are considered
"high cost" by virtue of the interest rates, points and fees, or
prepayment penalties. It is an expansion of the Home Ownership and Equity
Protection Act (HOEPA). The proposal would generally ban potentially
risky features such as balloon payments and would completely ban prepayment
penalties on high-cost loans. The rule would also ban fees for modifying
loans, restrict fees when customers ask for a payoff statement, and cap late
fees. But heck, shouldn't companies be
allowed to make them if the risk is known, and the borrower told?
Anyway, in addition the proposed rule would require counseling for
consumers before they could take out a high-cost mortgage and would implement
TILA counseling requirements where first-time borrowers are considering a loan
that permits negative amortization. The proposal will be available for public
comment for 60 days (until September 7) with some provisions subject to comment
until November 6. A final rule will be published next January. Here are
the 1099 pages in all their glory.
Lots of folks were excited when they saw the news about the IndyMac-shareholder
But American Banker was quick to point out that it is completely covered by the
Directors and Officers (D&O) policy. Plaintiff's probably wanted to
make sure they got something before the FDIC takes the rest. "Michael
Perry and other former executives of IndyMac Bancorp, holding company of the
thrift that spectacularly failed four years ago, settled a shareholder suit.
The D&O insurer will pay the investors $6.5 million; Perry and his former
colleagues will not have to reach into their own pockets. The D&O policy
has an estimated $80 million left, and there are other suits pending against
Perry and other IndyMac managers, including one brought by the FDIC seeking
And here's a little PR that our industry doesn't need, or warrant. A Texas
woman is suing JPMorgan Chase, claiming that the bank's eviction
caused the heart attack of her husband, a retired minister. Wanda Jo Engel
alleges that JPMorgan's wrongful home foreclosure and eviction created so much
stress that it "overwhelmed" her husband, Harry Engel, ultimately
triggering his death. She and her children, Steve, Debra and Josh, are suing
the bank for wrongful death and wrongful foreclosure and eviction among other
claims, according to a lawsuit filed in Dallas County Court.
Remember The Mortgage Debt Relief Act of 2007? Well, it expires at the end of
this year - I wonder if the expiration of its tax implications is part of the
"fiscal cliff" that our legislators seem unable to stave off. Of
course, the easy way out is just to extend everything, "kicking the can
down the road." After all, they made the rules and the deadlines; they can
extend them, right? Regardless, here is a reminder of the Act.
Here are some somewhat recent investor/M&A/training/agency updates,
providing a flavor for the environment. They just don't stop. As always, it is
best to read the actual bulletin.
Mortgage is hosting a complementary Plaza Training Webinar on "Reverse Mortgage
Basics" today from 11-12 PST. To sign up, go here.
Mortgage Guaranty Insurance Corporation (MGIC) recently issued its
Operational Summary for the month of May. The Summary shows continuing
improvement in the company's inventory of delinquent loans and a slight
increase in new business, from $1.7 billion of new primary insurance written in
April to $2.0 billion in May. At the beginning of the period there were 156,698
loans in that inventory, down from 160,473 at the beginning of April and
175,639 at the beginning of this year. Activity during the month included
10,907 notices of new delinquencies, 3801 claims paid, 8537 cures, and 294
rescissions or denials. By the end of May the inventory was down to
154,973 loans, a net reduction of 1,725 during the month and 20,666 since
January 1. Comparable activity in April included 10,134 new notices, 3,967
claims paid, 9,717 cures, and 236 rescissions or denials for a net reduction of
3,775 loans during the month. At the end of the first quarter of 2012 (March
31), the MGIC, the principal subsidiary of MGIC Investment Corporation, was
providing insurance covered for 1.1 million mortgages, a total of $169.0
billion of in force primary insurance.
Given the fires in Colorado, Freddie reminds clients of its disaster
policies. People should look for information in the Seller/Servicer Guide Vol.
2, Chapter 68, "Servicing Mortgages Impacted by a Disaster." "Our disaster
relief policies provide a number of ways for mortgage servicers to help
affected borrowers in the presidentially declared Major Disaster Areas where
Federal Individual Assistance programs are being made available. Freddie Mac,
for example, gives servicers the discretion to reduce or suspend mortgage
payments for up to 12 months for borrowers with Freddie Mac-owned mortgages. Each
case must be individually assessed to determine what assistance will best fit
the homeowner's circumstances. Freddie Mac also strongly encourages servicers
to help affected borrowers with Freddie Mac-owned loans by: 1) Suspending
foreclosure and eviction proceedings for up to 12 months; 2) Waiving
assessments of penalties or late fees against borrowers with disaster-damaged
homes; and 3) Not reporting forbearance or delinquencies caused by the disaster
to the nation's credit bureaus."
On Friday, over in Georgia, Montgomery Bank & Trust was closed by the
Georgia Department of Banking and Finance, which appointed the FDIC as
receiver. The FDIC entered into a purchase and assumption agreement with Ameris
Bank to assume all of the deposits. Speaking of problems in Georgia banks,
check out this separate fraud case.
The Mortgage Bankers Association of the Carolinas is offering a
number of self-paced online courses, all of which can be found here.
On offer are "Lending Integrity in the Dodd-Frank Era," "SAFE Comprehensive
Mortgage Loan Origination under the CFPB," "SAFE Comprehensive CE FHA for
Mortgage Loan Origination," "FHA for Mortgage Professionals," pre-licensing
courses, FHA DE underwriting, and FHA 203k training.
The Texas MBA will be putting on a webinar on implementing Anti-Money
Laundering and Suspicious Activity Reporting programs for independent
mortgage bankers in preparation for FINCen's upcoming August 13th
deadline. Interested parties can register here.
Fargo Funding is offering a webinar on FHA basics on July 17th. The
webinar will cover mortgage limits, insurance premiums, refinance programs,
underwriting, property and borrower eligibility, appraisals, energy efficient
programs, and support options. To register, visit http://www.wfhmevents.com/ and use access
code "FHA basics."
The FHA will also be offering training on "FHA FAQs and Hot Topics" on July
18th. This webinar will focus on credit scenarios, occupancy and
refinance transactions, and recent mortgagee letters. Register at http://www.visualwebcaster.com/event.asp?id=87795.
With all this going on, it is fortunate that that the markets are relatively
quiet. Of interest from yesterday is that Spanish yields breached 7% and the
EUR continued to trade below 1.23. The market closed near the highest levels of
the day (1.51% on U.S. 10-yr's) and was driven mainly by corporate issuance. Traders
reported that volumes were light throughout the day and will likely pick up
throughout the week with the auctions. Speaking of which, today we have a $32
billion 3-yr note auction ($21 billion 10-yr auction tomorrow, $13 billion 30-yr
auction on Thursday). So far MBS prices and the 10-yr (at 1.51%) are nearly
unchanged from Monday afternoon.
IT'S SO HOT in Indiana (Part 3 of 3)
.....you realize that asphalt has a liquid stage.
.....the potatoes cook underground, so all you have to do is pull one out and
.....the cows are giving evaporated milk.
.....farmers are feeding their chickens crushed ice to keep them from laying
And IT'S SO DRY IN Indiana... that the Baptists are starting to baptize by sprinkling,
the Methodists are using wet-wipes, the Presbyterians are giving rain checks,
and the Catholics are praying for the wine to turn back into water!