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Tag Archives: Consumer Financial Protection Bureau

CFPB: Banks, Nonbanks Liable for Third-Party Violations

The Consumer Financial Protection Bureau (CFPB) issued a bulletin Friday reminding financial institutions that they may be held accountable for violations under contracted service providers. The agency said that banks and nonbank entities need to supervise their third-party vendors with due diligence, consistently request and review their internal controls and training materials, and establish clear expectations about compliance. The CFPB is reaffirming its role as both a formal supervisor and informal trendsetter in the industry.

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Fitch Says Rules CFPB Is Considering Will Cause Servicers to Pay Up

In response to mortgage servicing rules the Consumer Financial Protection announced it may propose, Fitch Ratings issued a statement and said it believes mortgage servicers will incur increased operational, compliance, and reporting expenses if the rules take effect. To create more transparency, the CFPB said it is considering rules which require clear monthly mortgage statements, a warning before interest rates adjust, options to avoid ""force-placed"" insurance, and early information to keep customers out of foreclosure.

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CFPB to Propose Rules for Servicers to Tackle Problems

The Consumer Financial Protection Bureau (CFPB) is looking to propose mortgage servicing rules to keep borrowers from costly surprises and prevent servicers from giving customers the runaround. Lack of transparency and lack of accountability are the two issues motivating the new rules, and to create more transparency, the CFPB is proposing clear monthly mortgage statements, a warning before interest rates adjust, options to avoid force-placed insurance, and early information to keep customers out of foreclosure.

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CFPB Files Amicus for Borrowers’ Right to Cancel Certain Loans

The Consumer Financial Protection Bureau (CFPB) filed an amicus brief on behalf of borrowers for their rights to cancel home equity-loans or second mortgages if they did not receive important disclosures required by the Truth in Lending Act (TILA). The amicus brief - or ""friend of the court"" - was filed to ensure proper implementation of statutes allowing certain borrowers to rescind on their loans if they notify the lender of their intent to cancel within three years of signing the loan.

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AGA Seeks to Overturn Fed Ruling

The American Guild of Appraisers (AGA) petitioned the Fed and the Consumer Financial Protection Bureau to overturn a regulation that allows appraisers to be paid a fraction of what can be defined as a customary and reasonable fee, a release from the AGA stated. In 2010, Dodd-Frank rules were enacted to establish certain requirements for appraisals, including one to “ensure that creditors and their agents pay customary and reasonable fees to appraisers,” according to the Dodd-Frank website. But last year, the Fed introduced a new law that the AGA views as undermining the original Dodd-Frank requirement.

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AG Settlement Brings Relief to Military Members

The settlement reached last week between federal and state officials and the nation's five largest servicers includes specific provisions for U.S. military members wrongfully harmed by their mortgage servicer. Four of the five banks participating in the settlement - JPMorgan Chase, Wells Fargo, Citigroup, and Ally - will review foreclosures of military members since January 2006, identifying instances of violation of the Servicemembers Civil Relief Act, according to the Department of Justice.

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With 10M at Risk of Default, CFPB’s Primary Focus Is Mortgages

As many as 10 million homeowners are at risk of default, according to Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB). In an op-ed piece, Cordray recounts the type of behavior and practices that put so many Americans in danger of losing their homes - it's what he describes as ""the wild West of lending."" Enter the CFPB. While the agency is charged with overseeing all consumer-facing financial products and services, Cordray says its greatest focus is on the mortgage market, and servicing in particular.

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Loan Servicing Costs Expected to Rise as Foreclosure Expenses Mount

Analysts at Fitch Ratings expect to see a sharp rise in the cost to service mortgage loans. They describe the housing recovery in the U.S. as ""unhurried"" and as a result, they say lenders have been forced to shoulder higher foreclosure expenses. Fitch says increased foreclosure costs compounded by credit, compliance, regulatory, and other real-estate owned expenses are beginning to have a profound effect on the industry. The agency estimates the cost of servicing nonperforming loans is likely to double from pre-crisis levels.

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National Servicing Standards Emerge in New Homeowner Bill of Rights

The mortgage servicing system is badly broken and would benefit from a single set of federal standards, according to White House officials. President Obama on Wednesday introduced what he's termed the Homeowner Bill of Rights - principles that he says will ensure borrowers and lenders are playing by the same common-sense rules. These rules address disclosures, conflicts of interest posed by investors and junior lien holders, assistance for at-risk homeowners, and safeguards to prevent wrongful foreclosures.

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Raj Date Named CFPB Deputy Director

Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB) has named Raj Date the agency's first deputy director. Date has been leading the day-to-day operations of the bureau since it launched in July. Cordray also named Kent Markus to the position of assistant director of the Office of Enforcement to fill the position Cordray vacated upon his director appointment.

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