Posts Tagged ‘mortgage lender’

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)

Self-Directed IRA Earns 15% from MH

December 3rd, 2012 Comments off

Bloomberg reports Marilyn Cotterman of Brownsburg, Ind. put $40,000 in a self-directed IRA that allowed her to invest in manufactured housing, earning a multiple of the original investment in three years. As a Roth Ira, gains and income accrue tax free providing you do not benefit in any financial way outside the IRA, and you do not take money out before 59 1/2. All repairs, property taxes, management and other expenses must be paid from the account. Sweat equity is not allowed. Neither you nor any immediate family member can rent the manufactured home (or other real estate) or receive income from the property. Cotterman sells the homes she restores using a promissory note, in effect becoming the mortgage lender. “Buyers don’t care about the interest rate, just the total monthly payment,” she says. If the home buyer wants to site the home in an MHC, the community management does screening of would be residents, saving her a step. If the buyer defaults, she gets the home back and resells it. On one $10,000 promissory note she earned 15 percent after costs. Companies that offer self-directed IRAs do not check the legitimacy of where you invest, which opens the door to ponzi-type scams. As MHProNews has learned, compliance issues of Dodd-Frank and the SAFE Act should also be considered when making such investments.

(Photo credit: Pine Grove Mfg. Homes, Inc.)

High Down Payments Still Roil Many in Industry

December 30th, 2011 Comments off

NationalMortgageNews tells a survey by mortgage lender Lending Tree reveals Americans who can afford to buy homes are putting 12 percent down on average, even more where the property is more expensive. While some regulatory proposals push for down payments of 20 percent in order to be exempt from risk retention, as in the Dodd-Frank Act, many in the mortgage industry advocate a rate as low as five percent down, while regulators say ten percent would be wiser. Policymakers are even suggesting Fannie Mae and Freddie Mac minimums need to be raised from the current five percent. Doug Lebda, Lending Tree chief executive says of the data, “You’re dealing here in averages. In this data some borrowers have put 40% down and some have put 5% down. I’m for the 5%.” New Jersey has the highest average down payment at 13.8 percent, followed by California at 13.6 percent, Washington, D.C. and NYC at 13.5 percent, and Hawaii with 13.4 percent. Home buyers in Utah, Tennessee, Wyoming, and Oklahoma averages the lowest with between 11.4 percent and 11.7 percent.

(Photo credit: NewsCourier/Rebecca Croomes)