Posts Tagged ‘loan officer’

CFPB Sues Lender for Violating Compensation Rule

July 25th, 2013 Comments off

A mortgage lender is being sued by the Consumer Financial Protection Bureau (CFPB) for allegedly paying bonuses to loan originators that charged consumers higher interest rates in violation of the loan officer compensation rule. The 85th largest lender in the country, Castle and Cooke Mortgage LLC of Salt Lake City is said to have paid 150 loan officers quarterly bonuses ranging from $6,100 to $8,700 for leading borrowers into higher-priced loans. The Bureau


says loan officers who did not charge higher rates did not receive bonuses, and that 1,100 of the loans were illegal. According to what MHProNews has learned from nationalmortgagenews, C&C originated $332 million in loans in the first quarter. The lawsuit seeks restitution and civil penalties, and specifically cites company president Matthew Pineda and senior vice president Buck Hawkins. “We are taking action against the type of practices that precipitated the financial crisis,” said CFPB director Richard Cordray.

(Photo credit: top, ABCNews; bottom, HousingWire)

Existing and New Home Sales Rising

June 25th, 2013 Comments off

New home sales rose 2.1 percent in May over April, according to Commerce Dept. figures, the highest rate since 2008. The S&P Case Shiller home price index (HPI) of existing homes rose 12.1 per cent from last year, the best rate in seven years, according to what David Blitzer of Dow Jones S&P tells abcnews. In addition, the survey of 20 major metro areas show average home prices rising in all 20 cities. He says: “The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue.” Stan Humphries, Zillow’s chief economist, says, “The housing market worm has turned over the past few weeks – inventory levels are beginning to show signs of easing, and mortgage interest rates are creeping up. Going forward, both of these factors will help mitigate extreme price spikes caused by very strong housing demand and very low housing supply.” As MHProNews has learned, he says while the recovery is strong and sustainable, prices will not continue rising at the current rate.

(Photo credit: Reuters)

CFPB: Cap Excludes Comp

May 31st, 2013 Comments off

Saying it is too difficult to calculate individual pay early in the origination process, the Consumer Financial Protection Bureau (CFPB) now says loan officer compensation should not be included in the three percent cap threshold under the qualified mortgage rule. However, as nationalmortgagenews informs MHProNews, compensation paid by the creditor to a mortgage broker should be included, and so should fees paid by the consumer to the creditor. “This cap ensures that lenders offering qualified mortgages do not charge excessive points and fees,” says the CFPB. Mortgage Banker Association (MBA) president and chief executive David Stevens, says, “We welcome the stipulation that compensation paid by brokers and lenders to loan originator employees do not count toward the points and fees threshold for what constitutes a qualified mortgage. Both of these provisions should facilitate a more efficient and affordable marketplace for borrowers.” He adds the CFPB is trying to balance consumer protection with access to affordable credit.

(Image credit: hansafx)

CFPB’s New LO Rule due Soon

December 7th, 2012 Comments off

Nonbank lenders are closely watching the progress of the loan officer compensation rule set to be released mid January, 2013 by the Consumer Financial Protection Bureau (CFPB) as it could have a large effect on their income. A key issue to watch, as originationnews tells MHProNews, is dual compensation where the loan originator (LO) is paid by both the consumer and the wholesaler, a policy the CFPB strictly opposes. The National Association of Independent Housing Professionals (NAHIP) says dual compensation is not double compensation. Meanwhile, the government watchdog wants a zero-zero exemption. This policy would require lenders to make a mortgage available to borrowers “with no upfront discount points, origination points, or fees that are retained by the creditor, broker, or an affiliate of either if commission-based compensation is paid to an originator,” a rule opposed by the Mortgage Bankers Association. The MBA would support restricting the commission paid to a loan originator by a brokerage or creditor if that brokerage or creditor was also being paid by the borrower, but not the zero-zero as it stands.

(Image credit: moneycontrol)

Loan Origination Comp. May be Revealed Tomorrow

August 17th, 2012 Comments off

nationalmortgagenews reports Peter Carroll, assistant mortgage manager at the Consumer Financial Protection Bureau (CFPB) says the proposed loan officer compensation rule will be significantly different from the original set of guidelines issued in early May when the CFPB first raised the concept of flat fee payments for certain transactions, a practice that met resistance from the mortgage industry. The CFPB said it may prevent loan officers from charging origination fees if they were being paid by the buyer of the loan or the table funder. As MHProNews has learned, a briefing has been scheduled for Friday by the CFPB to discuss loan origination issues.

(Image credit: Consumer Financial Protection Bureau)

Loan Officer Comp. Still in the Wings

August 15th, 2012 1 comment

OriginationNews‘ Paul Muolo says the Consumer Financial Protection Bureau’s (CFPB) proposed unveiling of its final loan officer compensation rule set for early August has yet to be issued. While the mortgage industry anxiously awaits, some loan officers are suggesting the result might be better the longer the agency waits, hopefully in an attempt to get it right. As MHProNews has learned, if flat fee pricing is the answer, lenders might avoid markets where home prices are more modest. As he so aptly notes, “2% of $100,000 is a lot less than 2% of $500,000. Who knows, maybe the agency is trying to fix this.”

(Image credit: texaslendingtoday)

Loan Originator: Comp. is Wrongheaded

July 6th, 2012 Comments off

Writing in OriginationNews, Paul Muolo expresses the mortgage industry’s contempt for the Consumer Financial Protection Bureau’s (CFPB) loan officer compensation proposal, particularly the ‘flat fee’ payments. Some industry officials, thinking the agency is more intent on meeting the deadline of early 2013 than making sure the rule is equitable, are concerned that few, if any of the people at the CFPB have ever worked as a loan originator (LO). has learned loan brokers hope the proposal is either amended by Congress or delayed for at least two years to determine its fairness.

(Image credit: BankRate)

CFPB Examining Loan Officer Compensation Rule

March 29th, 2012 Comments off

OriginationNews tells Peter Carroll, the acting assistant director for the Consumer Financial Protection Bureau (CFPB) in charge of the Office of Mortgage Markets, is examining the Federal Reserve’s loan officer (LO) compensation rule. Jurisdiction for the rule was moved to the CFPB in July 2011 from the Fed’s control as part of the Dodd-Frank Act. The rule prevents LOs at mortgage firms from benefiting financially from the consumer and the lender in the same transaction. Responsible for how rules affect borrowers and lenders, Carroll says, “We are re-visiting some of the issues around that rulemaking as well as other items that were given to us in the Dodd-Frank Act.”

(Image credit: CFPB)