spent half my money on gambling, women, and booze. The other half I
wasted." Not that politicians would ever waste money - after all, they
can spend our money more effectively than we can, right? - but the
industry had some welcome news yesterday when the U.S. House and Senate
conferees reached an agreement on a multi-year transportation bill that does not
contain a provision to pay for a portion of the new transportation
spending through an increase in the fees charged by Fannie Mae and
Freddie Mac to guarantee a loan (g-fees).
Did someone say "CFPB" and "Dodd Frank"? No? Well, let's talk about them anyway. The Federal Reserve put in place rules (as a result of the Dodd-Frank Act) that would limit its emergency lending authority
to address only broad-based financial market issues rather than the
problems of a specific firm. In other words, the Fed ended "too big to
fail" lending to collapsing banks.
The CFPB released its Home Mortgage Disclosure (Regulation C) Small Entity Compliance Guide,
designed to address obligations under the Home Mortgage Disclosure Act
and Regulation C. (Hence the name.) There is also an executive summary,
timeline, and other resources that can help one understand the
requirements under the rule.
Certainly the CFPB's enforcement group has not been idle. In its latest report,
covering the six months from April through September, its supervisor
actions have "resulted in financial institutions providing more than $95
million in redress to over 177,000 consumers." In spite of my capital
markets background I am no math whiz, but by my longhand division
calculations this works out to about $536 per consumer. "During that
timeframe we also announced orders through enforcement actions for
approximately $5.8 billion in total relief for consumers who fell victim
to various violations of consumer financial protection laws."
are lots of figures out there, and one starts throwing around millions
in fines of various types I quickly become confused. Thomas Ressler
writes, "The Consumer Financial Protection Bureau more than doubled the
amount of money it collected in civil penalties during fiscal year 2015:
$183.1 million versus $77.5 million the year prior, according to the
agency's recently released financial report. Cash collections since the
CFPB's inception total $342.14 million, of which $190.12 million has
been allocated to victim compensation.
additional $13.38 million has been earmarked for consumer education and
financial literacy programs, the default destinations of a certain
amount of the penalties when victims can't be found or identified, or
when payment isn't 'practicable,' according to the bureau. Meanwhile,
approximately $2.07 million has been used by the CFPB as an
'administrative set-aside.' So as of Sept. 30, 2015, roughly $136.57
million remains available 'for future allocations.'" I mentioned all of this to my cat Myrtle, who seemed, like many, to be confused and suggested "people should follow the money."
The mounting criticism has not escaped the notice of Richard Cordray who addressed some of the comments regarding the CFPB's database in a recent response to American Banker.
Recently the CFPB announced
that it has initiated an administrative action against an online
lender, Integrity Advance, LLC, and its CEO, James R. Carnes, for
alleged violations of Truth in Lending Act, the Electronic Fund Transfer
Act (EFTA), and the CFPA's UDAAP prohibition. The announcement is
unusual since it has not been the CFPB's typical practice to announce an
administrative action without the simultaneous announcement of a
settlement. In the action, the CFPB seeks redress for harmed consumers,
as well as a civil money penalty and injunctive relief.
unlawful practices alleged by the CFPB include hiding the total cost of
loans by using disclosures that were based on a borrower's repayment of
a loan in a single payment, even though the loan agreement's default
terms called for multiple rollovers and additional finance charges.
Supposedly the lender required repayment by pre-authorized ACH payments.
According to the CFPB, this practice violated the EFTA prohibition on
conditioning a loan on the borrower's repayment through recurring
pre-authorized electronic fund transfers.
of the primary objectives of the EFTA and Regulation E is the
protection of individual consumers engaging in EFTs. The CFPB is
authorized, subject to certain exceptions, to enforce the EFTA and
Regulation E against any person subject to the EFTA and Regulation E. This
impacts mortgage lending because many lenders, and their servicers,
solicit and obtain authorization from consumers for payment of mortgage
loans by preauthorized EFTs.
of the industry continue to grapple with TILA-RESPA reform. Most folks I
have conversed with in recent weeks say that the title companies and
real estate agents are coming to grips with the changes. Want a great TRID chart based on fees? Here you go. And someone please assure me that the borrower is better off when lenders have to memorize this...
According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, the new integrated disclosure rules did not result in significant delays.
For home sales closed in October, loans related to the FHA saw a slight
decline in the share of mortgages that closed on time compared with
September, from 59.4 percent to 57.1 percent. During that same time
period, the share of VA loans closed increased from 60.1 percent to 65.5
percent, whereas FHA loans closed within 47 days in September and then
slightly increased to 47.2 days in October. Some realtors have mentioned
that despite, TRID, the process has still remained smooth, while others
have expressed a delay in closings.
Zelman and Associates published its October Mortgage Originator Survey finding that new
TRID disclosure requirements have led to unforeseen technical and
operational glitches but most of these problems have been resolved in a
Feedback has also suggested that the industry's significant preparation
for TRID has paid off, as most issues revolve around technical
Yet HousingWire published a report saying that TRID is a real obstacle in the lending process.
Leading up to the October 3rd
date of TILA-RESPA reform lenders and vendors continued to attempt to
help educate their clients and counterparties. Here are some random
announcements, for example.
First Community Mortgage has jumped on the band wagon enlisting Simplifile
and its collaboration services to aid them and their settlement agents
in meeting the CFPB's TILA-RESPA Integrated Disclosures (TRID) rule
timelines and requirements. "Simplifile offered a great price and great
product; what more can you ask for," said Mortgage Closing Manager Kele
Cuddy at First Community Mortgage. Simplifile's suite of online services
including Collaboration, E-recording, and Post Closing, allow lenders
and settlement agents nationwide to securely share, validate, audit,
track, record, and collaborate on loan documents, data, and fees to
ensure compliance. Interested in more information?
Pinnacle Capital Mortgage has TRID updates and announcements as well as brand new tools in its resource library.
Penny Mac TRID delivery requirements reminder have been posted here.
Nationstar Mortgage has updated its TILA/RESPA Integrated Disclosure Rule (TRID) Frequently Asked Questions (FAQ).
has provided answers to common questions regarding the new TRID rules.
For instance, Ditech will require a wet-signed signature on the final CD
to be executed at the time of loan consummation. The Intent to Proceed
from the borrower(s) will not be required prior to locking the loan. In
addition, Ditech will require that the CD has the realtors name, number,
license, etc. on page 5 of the CD to be eligible for purchase on
Over the last few months, Pacific Union Financial, LLC
has worked with its clients and business partners to assist in
successful implementation of changes to support the TRID rule. All loans
with applications dated October 3, and later (TRID applications) that
are submitted for purchase consideration should include all AIR
disclosures, Loan Estimates (LEs) and Closing Disclosures (CDs) issued
to the borrower(s).
over to the bond market, the U.S. Treasury complex rallied sharply
Tuesday "in a curve-flattening trade" after the ISM manufacturing index
fell to its lowest level since mid-2009. And once again both stock and
bond prices both improved. Total construction spending beat estimates
and increased 1.0% month-over-month in October.
we've already had the MBA's mortgage application numbers (refis -6%,
purchases +8%) and the November ADP Employment Change (+217k, topping
forecasts). We've also seen Q3 Productivity and Unit Labor Costs (+2.2%,
higher than forecasts, labor costs higher). Later is December Fed Beige
Book (14:00 EST) and more speeches from Fed officials expected to
continue laying the foundation for a short-term rate increase in a
couple weeks. Impending Fed increase or no increase, the 10-year closed
Tuesday at 2.15% and this morning it is at 2.18% with agency MBS prices worse .125.
Jobs and Announcements
The opportunities today span the nation, and the job gamut. In New England HomeBridge Financial Services
continues to grow its retail division and is now officially licensed in
Massachusetts, which brings its total number of state licenses to 49,
in addition to Washington, D.C. HomeBridge
is actively looking for associates at nearly all levels, including
branch managers, producing sales managers, loan originators and
operations support, in Massachusetts and across the rest of New England.
This has been a great year for HomeBridge, which is on track to fund
more than $10 billion in 2015 and recently launched its own in-house
servicing platform in suburban Atlanta and continues to operate two
thriving wholesale divisions, HomeBridge Wholesale and REMN Wholesale.
Anyone looking to connect with HomeBridge on opportunities within the
New England area should contact area manager Matt Hemphill (802-318-4564).
A thousand miles away First Community Mortgage's retail Midwest expansion continues with new offices now open in Kentucky, Ohio, and Minnesota. As
a Top 100 Lender, FCM is a sales and marketing focused lender providing
originators in-house processing, marketing support, and an aggressive
compensation plan. They are a direct FNMA, FHLMC, and GNMA lender and
offer Rural Housing and state specific down payment assistance programs.
FCM recently launched a one-loan 95% JUMBO product! If you are looking
for the personal touch of a local bank with the power of a direct
seller/servicer behind you, check out First Community Mortgage. Call Todd Turner at 330-620-6898 or Tim Smith at 612-987-5190 to talk about growing your team.
an east coast mortgage banker is seeking an experienced professional
for a newly created position of Chief Operating Officer. The
Company has strong capital backing from a public company and a national
lending footprint. The Company is embarking on an aggressive expansion
initiative and offers a full array of Agency, Government and Jumbo
products. The Company maintains both retail and third party channels.
The successful COO candidate must possess a proven track record of
leadership and change management, with a particular expertise on
implementing enhanced operational efficiencies. Please send confidential resumes to me.
Congrats to Lizzie David! Lizzie was brought on board by retail lender Mortgage 1 as AVP of Business Development. Mortgage 1
has just exceeded $1 billion in 2015 closed loan production and is
currently looking to expand production in the states of Ohio, Florida,
Mortgage 1's growth is attributed to a strong commitment to the
purchase market. Interested originators and originator teams please
contact Rick Holcomb (586.799.0009).
Heading into the New Year, it is important to evaluate how you've done so you can continue to be better next year. Today from
11:00 AM to 12:00 PM EST, join XINNIX, The Mortgage Academy, as CEO and
Founder, Casey Cunningham, reveals the Six Essential Skills of a
practical tactics to build and retain a highly effective sales team and
ultimately, increase your team's production. This live webinar is
complimentary, but registration is required. Click here to learn more and register.
California, Florida and Texas Mortgage Professionals, there's a huge party coming up next week for you. National Mortgage Professional Magazine
knows the only thing better than a closed loan is a free party. It is
hosting the biggest FREE Holiday Networking Party in years. "So big, we
need Texas, California and Florida to host it! The networking party is
preceded by business building workshops from industry leaders such as
Greg Frost from PRMI, Barry Habib from MBS Highway and Frank Garay and
Brian Stevens from NREP. After the workshops, you can mix and mingle
with other successful mortgage loan officers and celebrate the evening
with music, complimentary food, prizes and a heavy dose of holiday
cheer! MLOs with NMLS numbers, college students and veterans attend
FREE." Register by clicking the state that you wish to attend: California, Texas, or Florida.
Register for MBA's December 14th webinar
providing a deeper dive into the MBA White Paper entitled "Housing
Demand - Demographics and the Numbers behind the Coming Multi-Million
Increase in Households." MBA Speakers include Dr. Lynn M. Fisher Vice President of Research & Economics and Jamie Woodwell Vice President of Commercial/Multifamily Research.