Tag Archives: Consumer Financial Protection Bureau

While the national delinquency rate remains elevated and even increased slightly month-over-month in December, the delinquency rate ended the year 32 percent lower than the January 2010 peak, according to the December Mortgage Monitor report from Lender Processing Services (LPS). Compared to January 2012, when about 15.5 million loans were in negative equity, the number of underwater borrowers has decreased to 9.8 million, which represents a 35 percent decline.

A federal appeals court in Washington, D.C., ruled Friday that the controversial recess appointments made by President Obama in January 2012--which includes the appointment of Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB)--are ""invalid from their inception."" In Noel Canning v. National Labor Relations Board, the court examines the recess appointments of three members of the board--Sharon Block, Terence Flynn, and Richard Griffin, all of whom were appointed January 4, during a three-day Senate break. While he is not specifically named in the court's opinion, Cordray was also appointed to his CFPB post that day.

The last few weeks have seen a deluge of new rules from the Consumer Financial Protection Bureau (CFPB) and other regulatory agencies, but a new report from the U.S. Government Accountability Office (GAO) says the reform process is still coming along slowly. As of the end of 2012, GAO estimates regulators have issued rules for approximately 48 percent of the Dodd-Frank provisions that call for them. Most of the effective deadlines for those rules have not yet been reached, the agency says.

The new servicing rules recently issued by the Consumer Financial Protection Bureau (CFPB) will benefit the mortgage servicing industry by creating uniform standards, but it will also increase compliance costs for the servicers, which will put pressure on smaller-sized entities, according to a report from Fitch Ratings. ""[S]imilar to other servicing-focused initiatives, the CFPB rules will further increase compliance costs for the industry, extend timelines, and potentially drive further consolidation within mid to smaller servicers,"" Fitch stated.

President Obama nominated Mary Jo White to serve as chair of the Securities and Exchange Commission (SEC), according to reports. White is known for her work as a U.S. attorney for the Southern District of New York, a position she held from 1993 to 2002. During her time as a U.S. attorney, White served as a prosecutor in international terrorism cases, as well as complex white collar cases. Obama also renominated Richard Cordray as the director of the Consumer Financial Protection Bureau (CFPB).

Now that the industry has its long-awaited ""qualified mortgage"" (QM) definition, Fitch Ratings believes jumbo prime securities are poised to see a jump start. While many analysts anticipate a kick start in lending and securitization now that the rules are clear, Fitch asserts most of the underwriting guidelines suggested have already been put into practice since the financial crisis. However, the ratings agency sees the QM definition as a boon for the jumbo prime market.

Starting in January 2014, mortgage lenders will work under new rules governing the handling of appraisals and other home value estimates. The Consumer Financial Protection Bureau (CFPB) announced Friday the adoption of a new rule intended to improve consumer access to appraisal reports. The new rule implements requirements under the Dodd-Frank Act that state that lenders must give consumers a copy of each appraisal free of charge. A lender generally may still charge a reasonable fee for the cost of conducting the appraisal.

The disagreement over the nation's borrowing limit took a back seat to gun control and perhaps lost some urgency when House Republicans floated the idea of a temporary extension, which would do what Washington seems to be famous for--kicking the can down the road. But, the controversy and its impact on the nation's financial credibility demands a solution that will last for more than just a few months. Just a week after unveiling new rules for mortgage originations, the Consumer Financial Protection Bureau stepped up its game by turning to the other end of the mortgage business, collecting on loans.

The long-awaited definition of the Consumer Financial Protection Bureau's (CFPB) ability to repay rule and qualified mortgage standards have been unveiled, and Capital Economics says the new rules will not hamper the housing recovery. Previously, some concern circulated the industry that the qualified mortgage rule would be too limiting, possibly shutting reasonably safe borrowers out of the market and stalling a market recovery.

After issuing a finalized qualified mortgage (QM) rule on Thursday, the Consumer Financial Protection Bureau (CFPB) also released its guidance on rules to protect consumers of high-cost mortgages. For borrowers with high-cost mortgages, the bureau's final rule bans potentially risky features such as balloon payments (with some exceptions) and penalties for borrowers who pay off loans early. The rule also bans and limits certain fees and practices, such as fees for modifying loans and fees for requesting a payoff statement.