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Posts Tagged ‘loan originators’

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)

Threat to Industry Needs to be Addressed

June 11th, 2013 Comments off

In an appeal from the Manufactured Housing Institute, MHI Chairman Nathan Smith says unless the Preserving Access to Manufactured Housing Act (H.R. 1779) becomes law, low-to-moderate income prospective buyers will face a tougher time trying to purchase a manufactured home, due to Dodd-Frank Act provisions. The bill will alter the definition of “high-cost” loans as they pertain to small-sized manufactured home loans, and re-define loan originators so as to exclude manufactured home salespeople. Noting the broad support needed from both parties, Smith says, “It is absolutely critical that the members of the manufactured housing industry and its allies clearly demonstrate that this corrective legislation is needed and transcends any partisan politics.” MHProNews has learned similar legislation will be introduced in the Senate shortly, so MHI members and associates need to re-double their efforts in contacting their representatives. Click here for full story.

(Photo credit: mycn2–Nathan Smith, Chairman of MHI))

CFPB Issues Exam Procedures

June 5th, 2013 Comments off

According to mortgagenewsdaily, the Consumer Financial Protection Bureau (CFPB) has issued updates regarding what examiners will be checking lenders for when the new regulations go into effect Jan. 2014. Noting these are the first of what is anticipated will be numerous updates, the examination procedures concern the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). “The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” says CFPB Director Richard Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.” As MHProNews understands, the updates deal with compensation, appraisals, escrow accounts and qualifications for loan originators. The CFPB is coordinating its efforts with other federal government regulators that oversee financial institutions and mortgage companies to ensure there is a shared understanding of the rules.

(Image credit: HousingWire)

Rep. Fincher’s Remarks Regarding HR 1779 in the Congressional Record

May 3rd, 2013 Comments off

Rep. Stephen Fincher (R-Tenn.), Rep. Bennie Thompson (D-Miss.), and Rep. Gary Miller (R-Calif.) sponsored The Preserving Access to Manufactured Housing Act, HR 1779, which will amend the provisions in Dodd-Frank that curtail the availability of manufactured housing loans. In remarks in the Congressional Record of April 26, 2013, Rep. Fincher, while noting the importance of manufactured homes as affordable housing that many families rely on, states the housing turndown resulted in an 80 percent reduction in the production of MH, the closing of 160 plants, and the loss of 200,000 jobs. He says the Consumer Financial Protection Bureau (CFPB) issued guidelines as required under the Dodd-Frank Act that will classify many manufactured home loans as predatory and high-cost under the Home Ownership Equity and Protection Act (HOEPA). He says, “ Simply put the cost of originating and servicing a $250,000 loan and a $25,000 loan are the same in terms of real dollars, but the cost as a percentage of each loan’s size is significantly different. This difference causes the smaller-sized manufactured home loan to potentially exceed the new HOEPA thresholds set by Dodd-Frank and be categorized as a high-cost mortgage and stigmatized as predatory, even though there is nothing predatory about the features of the loan. The liabilities associated with making and obtaining a HOEPA high-cost mortgage will likely prevent lenders from offering loans to low and moderate-income homebuyers, denying families access to necessary credit for new and existing manufactured homes.” Noting the business model for buying manufactured homes differs from a traditional mortgage, he adds the measure would also remove manufactured home retailers and salespersons from being classified as loan originators, providing they do not receive compensation from a lender. As MHProNews reported April 27, the Senate will be considering a similar bill. For the entire entry into the Congressional Record, please click here.

(Photo credit: Champion Homes)

Loan Originators Gain Common Ground

April 2nd, 2013 Comments off

According to the Conference of State Bank Supervisors, nationalmortgagenews says as of April 1, 2013, 20 states have signed on to a uniform state test for loan originators, allowing them to operate in those states without being re-tested. Another six states will be on board by October. As MHProNews has learned, the 2008 SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act) created state licensing requirements and testing for nonbank loan originators.

(Image credit: andyenstallblog)

Housing Crisis Tab: Nearly a Year’s GDP

September 11th, 2012 Comments off

HousingWire reports Ann Fulmer, with fraud analytics firm Interthinx, said the nation’s housing meltdown, with all the mortgage-backed securities litigation, bailouts, lost home equity, and lawsuits cost $13 trillion, almost as much as the $15 trillion gross domestic product (GDP) for 2011. Speaking at a Mortgage Bankers Association (MBA) gathering, she noted, “We did not pay attention to data integrity on the way up, and so we have wiped out almost an entire year of gross domestic product in the United States.” She said in the future, loan originators or borrowers may try to fudge on loan applications, supporting documents, or manipulate numbers for the down payment amount. “If that becomes the standard then that becomes the problem area.” As MHProNews has learned, she added, “If you don’t get it right up front then you have a defective loan.”

(Image credit: HousingWire)

CFPB Amends LO Compensation Proposal

August 27th, 2012 Comments off

As follow-up to a story we published Aug. 17, 2012 about loan originator compensation, the Consumer Financial Protection Bureau (CFPB) has issued a new proposal which gives management more control of pricing, and prohibits loan originators from leading borrowers into higher cost or higher risk loans as a means to increase their compensation. The CFPB wants lenders to offer a “zero-zero option” which allows potential borrowers to see the full interest rate and total closing costs of a mortgage so they can more easily compare it to other options. As nationalmortgagenews noted, CFPB Director Richard Cordray said, “Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees. We want to provide consumers with clearer options and enable them to choose the loan that they believe is right for them.” In addition, under the revised proposal, senior managers would not be considered loan originators if they originated five or fewer loans in the last 12 months. The public comment period is open until Oct. 16. MHProNews has learned the CFPB intends to finalize the proposal after the first of the year.

(Image credit: moneycontrol)

Regulation would Standardize Loan Originator Training

July 24th, 2012 Comments off

According to OriginationNews, the Consumer Financial Protection Bureau (CFPB) wants to standardize training so all loan originators meet the same requirements for fitness, character, and financial responsibility. The new standards would erase some of the differences between bank loan originators and state-licensed LOs created by Congress’ passage of the SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act) in 2008, now under the jurisdiction of the CFPB. (As MHProNews knows, the SAFE Act prevents those involved in the manufactured housing industry who are not licensed mortgage brokers from discussing financing of MH with a customer.) Banks typically have their own training program for LOs, which are often more stringent than state licensing and testing. Standardizing the training would allow bank mortgage lenders to easily move over to a state-licensed mortgage broker. Agency officials want to finalize the new professional standards by the end of January 2013.

(Image credit: Foreclosure Listings)

Fed Lending Reforms due Soon

July 9th, 2012 Comments off

azstarnet reports the two major mortgage market overseers in the federal government are trying to convince private lenders to ease up on lending restrictions that have become tighter than those required by Fannie Mae and Freddie Mac, which are under the jurisdiction of the Federal Housing Finance Agency, and the Federal Housing Administration (FHA), which administers low-cost loans. Saying a minor infraction in documentation can conceivably cost hundreds of thousands of dollars, lenders have adopted “overlay” rules adding extra fees, larger down payments , and requiring higher credit scores than the GSEs require. In addition, loan originators are unsure of the effect of upcoming Dodd-Frank regulations, and do not want to be charged with underwriting deficiencies after 2-3 years of a loan that has been on time. MHProNews.com has learned FHFA and FHA are expected to announce reforms soon.

(Image credit: Federal Housing Administration)

MH Industry’s Call to FHA and HUD

November 23rd, 2011 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) and the Manufactured Housing Institute, acting jointly as the Coalition to Advance Manufactured Housing (Coalition), held a 30-minute follow-up conference call Nov. 22, 2011 with Federal Housing Authority (FHA) Commissioner Carole Galante, and Housing and Urban Development’s program manager, Henry Czauski, to discuss three issues previously detailed: Easing of FHA Title I Government National Mortgage Association (GNMA) securitization requirements and increasing the number of loan originators; selection of a non-career administrator; and appointment to the Manufactured Housing Consensus Committee (MHCC) of MHARR and MHI staff members. The Commissioner stated as for the tight GNMA credit, she understood those loans under-perform, although she conceded the only data available is from the 1980s and 1990s, and that it would be difficult to obtain that information from current HUD Code manufactured home loans. MHARR pointed out one unintended consequence of tighter credit was de facto monopolization of MH financing by one or two companies. The Commissioner agreed to work with the Coalition to obtain more relevant data. As for a non-career administrator, Commissioner Galante replied that budgets are tight and she would work to involve the manufactured housing industry with policy decisions. Regarding the appointment of MHARR’s Mark Weiss and MHI’s Lois Starkey as representatives to MHCC, program manager Czauski noted the appointments are being processed and an answer should be forthcoming by the year’s end. MHARR reiterated the importance of including industry representation on the MHCC as required by law.

(Graphic credit: FHA/HUD)