CFPB Issues Servicing Rules, Annual CARD, HOEPA, and QM Adjustments; Upcoming Events
The CFPB released a bulletin outlining expectations for mortgage servicers that transfer loans;
bulletin includes information on how mortgage servicers should pay
attention to new rules protecting consumers applying for loss mitigation
help or trial modifications. The updated bulletin, which can be
replaces the CFPB's February 2013 guidance. The CFPB explains that its
"concern in this area remains heightened due to the continuing high
volume of servicing transfers."
view this updated bulletin as a more detailed supervisory tool rather
than a departure from the CFPB's previous stance (in place since
January) on mortgage servicing transfers. For example, the original
bulletin included seven general information requests for certain
servicers planning transfers and this bulletin includes the same list
except it added the following request: "A detailed description of how
the servicer will ensure that it is complying with the applicable new
servicing rule provisions on transfers." The
CFPB's approval is not necessary for a mortgage servicing transfer
unless there is an overriding agreement (e.g. consent order) governing
the company. Given
the wave of transfers and the corresponding increase in headline
pressure, it is not surprising to see continued regulatory headwinds
impacting specialty servicers which are likely to further increase the
costs associated with growth via acquisitions.
(Speaking of transferring servicing, MSR tapes? I've seen a few. MountainView Servicing Group
has had two offerings, the first; a $1.6B FNMA/GNMA servicing
portfolio. The package was 94% fixed rate, 94% retail, WaFICO 740, WaLTV
80%, WAC of 3.92%, $225k average loan size, with New York (30.9%),
California (12.1 %), New Jersey (11.5%), and Virginia (5.6%); the second
a $348M FHLMC/FNMA portfolio with 99% fixed rate/first lien, WaFICO
755, WaLTV 75%, WAC of 4.18%, $234k average loan size, with Colorado
(61%), California (15%), Arizona (6.5%), and Illinois (6%); Interactive Mortgage Advisors' offerings included a $3.17B GNMA package with 3.67%
Wtd Avg Note Rate, a 12 month Average Escrow Balances of 1.07% of UPB,
sub-serviced by nationally known company, with DLQs (not including
FC/BK) of 5.37%.)
But the CFPB impacts all areas of residential lending, not merely servicing, and recently released its annual CARD Act, HOEPA, and QM adjustments,
as shown in this Ballard Spahr release. "The CFPB has published a final
rule regarding various annual adjustments it is required to make under
provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA,
and the ability to repay/qualified mortgage provisions of Dodd-Frank. The
adjustments made by the final rule are effective January 1, 2015. The
CARD Act requires the CFPB to calculate annual adjustments of (1) the
minimum interest charge threshold that triggers disclosure of the
minimum interest charge in credit card applications, solicitations and
account opening disclosures, and (2) the fee thresholds for the penalty
fees safe harbor. The calculation did not result in a change to the current $1.00 minimum interest charge threshold. However,
in the final rule, the CFPB increased the current penalty fee safe
harbor of $26 for a first late payment and $37 for a subsequent
violation within the following six months to, respectively, $27 and $38.
requires the CFPB to annually adjust the total loan amount threshold
that determines whether a transaction is a high cost mortgage when the
points and fees are either 5 percent or 8 percent of such amount. In
the final rule, the CFPB increased the current dollar thresholds from,
respectively, $20,000 to $20,391, and $1,000 to $1,020. Pursuant to its
ability to repay/QM rule, the CFPB must annually adjust the points and
fees limits that a loan must not exceed to satisfy the requirements for a
QM. The CFPB must also annually adjust the related loan amount limits. In
the final rule, the CFPB increased these limits to the following: For a
loan amount greater than or equal to $101,953 (currently $100,000),
points and fees may not exceed 3 percent of the total loan amount. For a
loan amount greater than or equal to $61,172 (currently $60,000) but
less than $101,953 (currently $100,000), points and fees may not exceed
$3,059 (currently $3,000). For a loan amount greater than or equal to
$20,391 (currently $20,000) but less than $61,172 (currently $60,000),
points and fees may not exceed 5 percent of the total loan amount. For a
loan amount greater than or equal to $12,744 (currently $12,500) but
less than $20,391 (currently $20,000), points and fees may not exceed
$1,020 (currently $1,000). For a loan amount less than $12,744
(currently $12,500), points and fees may not exceed 8 percent of the
total loan amount." But hey, don't take Ballard Spahr's word for it -
read all about it in the Federal Register.
A quick lender name note: Bay Bancorp Inc. is renaming its mortgage division "Bay Bank Mortgage"
as part of a plan to drastically increase the size of it. The name
replaces Carrollton Mortgage Services, which was left over from the
bank's $25 million acquisition of Columbia-based Carrollton Bank in
Upcoming events and training opportunities.
MBA of Greater Philadelphia and co-sponsor, MBA-NJ, are offering CE Classroom 8 Hour PA SAFE Comprehensive on Tuesday, September 23: Registration.
A La Mode's Modern Appraiser Road Show in Sacramento September 8th-10th. Every minute of our three-day CE-based training will fuel your business: Register.
If you're in New Mexico in late August, Register for the NMMLA housing conference.
MBA St. Louis Education Seminar and Expo
on September 11th will include session topics on Property Valuation,
Selling in a Purchase Market, Serving a Diverse Market, American Land
Title Association Best Practices, Continuing Education - Missouri State
Test, and Combined Disclosure Statements Roundtable.
Encompass Experience 2015 conference will be held Feb. 22 - 26, 2015 at
the Walt Disney World Swan and Dolphin Resort in Orlando, Fla. Early Registration.
Don't' forget the MBA's "Manual Underwriting and Risk Analysis Workshop in a QM World" on September 9th in Miami Florida: Register Now.
Ellie Mae's RESPA-TILA Integrated Mortgage Disclosures Webinar series: Delivery Timing and Tolerances is scheduled for August 20th.
Florida Association of Mortgage Professionals (FAMP) 2014 State
Convention and Trade Show is September 4-6 at Shingle Creek Resort,
Orlando Florida. "Two Day Tradeshow, Two Luncheons with the Regulators
That Impact Your Lives, Three NMLS Approved 8-Hour Continuing Education
Sessions, Breakout Sessions With The Experts That Can Enlighten and
Guide You In the Fields of Compliance, Technological Trends, Sales and
Marketing and Products Designed To Help You Work Smarter Than Your
Competition, Golf Outing At Shingle Creek Resort." Exhibitors and
Attendees - Click Here To Go To The FAMP Convention Web Page or e-mail firstname.lastname@example.org for additional information.
is offering 8 Hour SAFE Comprehensive CE on September 16th to satisfy
all Continuing Education Requirements for NM Loan Originators Register.
CAMP South L.A.
registration for Duane Gomer's Mortgage Loan Origination 8 hours of
live continuing education comprehensive course scheduled for Saturday,
October 4th is available now.
is hosting webinar to answer some frequently asked questions about the
TILA-RESPA Integrated Disclosure rule on Tuesday, August 26th Register.
This will be the second in a series of webinars to address the new rule
as creditors, mortgage brokers, settlement agents, software developers,
and other stakeholders work to implement it over the next year.
Acquisition Strategies for Mobile Webinar from American Banker
on August 21st (tomorrow!) will look at three approaches to mobile app
design and marketing tactics that can reel in new customers.
volatility that we saw last week is dissipating from the market. (Let's
see what happens in October when the Fed isn't engaged in QE3!)
Yesterday we saw a combination of lack of market-moving news from
overseas (Ukraine and Israel) and good news here stateside. Housing
Starts rose almost 16% in July to their highest level in eight months,
and Building Permits increased by 8.1% to a 1.05 million pace, the
fastest rate of building applications for single-family dwellings since
November. No wonder builders are optimistic! From a year ago, home construction was up 21.7%. Starts on single-family homes, which reflect the bulk of the market, climbed 8.3% in July from June. Construction
of multifamily units-mostly condominiums and apartments--rose 33% to a
pace of 423,000 units, the highest level since January 2006. We also were reminded about the lack of inflation, in spite of the best forecasts by "experts".
The Consumer Price Index was +.1% in July, the smallest gain since
February. QE has not caused the widespread inflation many thought - yet.
keep producing, and the Fed keeps buying. The New York Fed's daily MBS
operations amounted to $1.591 billion total, or 92.2% of the scheduled
$1.725 billion slated for purchase. But rates edged higher, basically
because they wanted to, and 30-yr agency MBS prices closed lower/worse
economic calendar at midweek features the Fed minutes from the July
29-30th meeting. These come out at 2PM EST, 8AM HST, as the market will
no doubt be scrounging for any information and tidbits beforehand. In
the early going this morning the 10-yr yield is slightly higher at 2.41% and agency MBS prices are worse a tad.
the recruiting side of things, "A number of loan officers over the last
few weeks have reached out to me because their mortgage firms can't
seem to close loans effectively", says Dr. Rick Roque, founder of MENLO,
a retail production growth firm whose focus is on loan officer groups
looking to make a transition to better capitalized and supportive
mortgage platforms. "To
mitigate risk, overlays and over-'conditioning' files prior to close
are a few examples how retail companies undermine the production efforts
of loan officers - this is either directly related to being
under-capitalized or a function of poor management regarding managing
Roque works closely with loan officer teams doing $2,000,000 to
$20,000,000 per month in origination volume who are looking for a more
stable and reliable mortgage platform. Specific geographies of interest
are Arizona, California, Missouri, Illinois, Kansas, Florida, Virginia
and Maryland. MENLO estimates roughly 1200 broker and mini correspondent
firms across the U.S., as well as a 10% attrition in the enterprise
market (mergers, etc.) will consolidate the retail market further in the
4th quarter and 1st quarter(s) of 2015 due to market conditions. For
more information contact Dr. Roque.
On the wholesale & correspondent side, AmeriHome Mortgage Correspondent is looking for sales professionals.
Amerihome just introduced a High LTV (89.9%), no MI option with its
Core Jumbo 5/1 Program, added premium pricing (101.50) to their
Expanded Program (loans to 600 FICO, 83% LTV, no MI, 2 yrs. out of
BK/FC, 1 yr. DIL & SS) and USDA loans.
"These programs and enhancements are in addition to its current full
slate of agency and non-agency product offerings; giving clients access
to 'a true one stop/full service correspondent investor'. To support
their continued growth, John Hedlund, Managing Director Correspondent Lending Division continues to add experienced sales professionals to the team...joining Chris Maturo - West, John Hill - West, and Steve Lemon - South East, are Gil Lopez - Central - a long time correspondent and capital markets sales professional out of Houston, Texas, and Paul Rofino - who brings 25 years plus correspondent and wholesale sales experience to Amerihome and his clients.