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Posts Tagged ‘Qualified Mortgage Rules’

CFPB Takes Action, Faces Additional Scrutiny

December 21st, 2016 Comments off
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Paradoy of CFPB logo – credit, Plus 1 Properties. Cartoon credit, MHProNews.

As the year draws to a close, the Consumer Finance Protection Bureau (CFPB) is taking action, and is also facing scrutiny.

According to Mortgage Daily News, The CFPB has entered into a consent order with Moneytree to settle allegations that the company engaged in deceptive advertising, sent consumers deceptive collection letters, and did not obtain written authorization for electronic repayments.

The consent order requires the company to pay approximately $255,000 in consumer redress and a civil money penalty of $250,000 to the CFPB. Moneytree did not admit to any wrongdoing in the matter.

The agency has also taken action against took action against four pawnbrokers in Virginia for “deceiving consumers about the actual annual costs of their loans.

Lawsuits filed in federal court by the CFPB alleged that the four companies broke the law by misstating the charges associated with pawn loans, and the suit seeks to get restitution for customers in addition to imposing penalties.

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Credit: Wikipedia, CFPB, HubPages.

CFPB Hurting the Middle Class?

A scathing op-ed from the Competitive Enterprise Institute (CEI) says that the CFPB has “imposed rule after rule that hurts consumers and the middle class especially,” and lays out a number of ways that the organization could be causing financial problems, including the CFPB’s qualified mortgage (QM) rules, making short term loans difficult to get, encouraging suing in disagreements as opposed to arbitration and compiling mass amounts of consumer data.

On consumer data, CEI points to an article written by former House Speaker Newt Gingrich in The Wall Street Journal.

Every month the CFPB … gathers data on 22 million mortgages, 5.5 million student loans, two million bank accounts with overdraft fees, and hundreds of thousands of auto sales, credit scores and deposit advance loans.

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Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market. To see the video of Cordray and others, click here.

Daily Business News readers are no strangers to the ongoing saga of the CFPB and the Dodd-Frank Act, with extensive coverage of the impact on the manufactured housing industry, the CFPB being ruled unconstitutional by a D.C. Circuit Court, and both Dodd-Frank and the CFPB being deep in the cross-hairs of President-elect Donald Trump.

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James Cox. Credit: Duke.

According to some experts, while an all out repeal of Dodd-Frank is unlikely, significant changes to key parts of the law are a real possibility.

I don’t think it eviscerates Dodd-Frank, but I think it takes away some parts,“ said James Cox, a Duke University expert on securities law speaking on the Trump team’s approach. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Appraisal Rule Implementation Looms for HUD Code Manufactured Home sales

June 30th, 2015 Comments off

CFPB-AppraisalRule-HUD_codeManufacturedHomes-logo=CFPB-graphiccredit-MHProNews-com-The Texas Manufactured Housing Association (TMHA) reminds MHProNews that the new appraisal disclosure rules go into effect on July 18, 2015. The rules apply to those homes that go beyond QM status limits set by the Consumer Financial Protection Bureau (CFPB) regulations.

DataComp and NADA are going to be the likely vendors of choice, both of which have been working for well over a year to have systems in place that can support the value of homes being sold using personal property loans by MH retailers and communities.

TMHA members are among those who are ‘nervous’ about how well the new systems being imposed by federal fiat will support the sale prices on new manufactured homes.  The service providers tell MHProNews that ‘most’ sales, perhaps north of 90% on test cases, will be okay.  While encouraging, that also clearly implies that there will be sales that could be lost due to the newly impossed rules.  

MHProNews’ Featured Articles in the upcoming July issue will cover the appraisal rule topic from different lender’s viewpoints. The new July Featured Articles are scheduled to go live on the MHProNews home page, found under the Daily Business News  module, Wednesday evening, July 1, 2015. ##

(Image credits: Consumer Financial Protection Bureau logo – CFPB; graphic credit – MHProNews ©)

CFPB Director Cordray Explains Changes to QM Rules and How He Obtained a Black Eye

February 12th, 2015 Comments off

cfpb-director-richard-cordrayOn January 29, the CFPB proposed raising the threshold for small and rural lenders. This action will allow more institutions to make qualified mortgage loans without having to meet certain requirements required of larger lenders.

At a town hall meeting organized by the National Credit Union Administration on Tuesday, February 10, Consumer Financial Protection Bureau Director Richard Cordray discussed the new changes coming up. He revealed that the decision to ease qualified mortgage restrictions for small and rural lenders had caused some internal disagreements in his organization on how the CFPB should make changes to the QM rule to help smaller institutions.

CFPB Director Richard Cordray and U.S. Rep. Gwen Moore (D-Wis.)

Cordray, who noted that his Ohio home would be considered rural under the plan, said despite the initial internal pushback, he thought the reasoning to expand what qualifies as “rural” was “quite justified.”

National Mortgage News tells MHProNews that Cordray explained that the proposal would cover about 22% of the population. This figure is almost 10 times the initial proposal from the Federal Reserve Board (before rule-writing power was transferred to the CFPB) and up from the 9.9% of the population that the existing rule covers.

“This was a matter of debate within the bureau,” he said, “but I ultimately believed and concluded that we had initially drawn the line too narrowly. I felt that we should allow more latitude to the small creditors to give them some breathing room, maybe some room to grow.”

He added that the agency is working “on debt collection rules, overdraft, and a variety of other things.”

As for the shiner under his left eye, Cordray kicked off the session by explaining that he sustained the temporary black eye at a basketball game. ##

(Photo Credit: Rep. Gwen Moore / Twitter)

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Article submitted by Sandra Lane to – Daily Business News – MHProNews.

Trade Groups Seek More Compensation for HFA Loans

February 10th, 2015 Comments off

u-s-capitol-building-credit=dc-shpo-posted-daily-business-news-mhpronews-com-Scotsman Guide News tells MHProNews that two national trade groups have asked the Consumer Financial Protection Bureau (CFPB) to exempt Housing Finance Agency (HFA) loans aimed at first-time homebuyers and lower-income borrowers from a rule that prevents lenders from receiving extra compensation for originating these loans.  Last week in a letter to the CFPB, the Mortgage Bankers Association and National Council of State Housing Agencies (NCSHA) asked for a more flexible interpretation of the loan officer compensation rule.

The two groups say that HFA loans are typically more expensive to originate, involving added bureaucracy and paperwork. However, lenders can’t charge more for the loans because HFA loans fall under the loan officer compensation rule. That rule prevents lenders from tacking on additional charges for loan products. Generally speaking, compensation must be based on the loan amounts. The rule was adopted as part of the Dodd-Frank Wall Street and Consumer Protection Act reforms to discourage lenders from steering borrowers into risky, higher-priced loans.

Garth Rieman, NCSHA’s director of housing advocacy and strategic initiatives, told Scotsman Guide News on Monday that the trade groups fear that fewer lenders are originating HFA loans because the net compensation is lower. HFA represents only about a 5 percent share of the mortgage market, Rieman said. However, these loans, which often offer lower interest rates and down payments, are designed for lower-income borrowers and first-time homebuyers.

The federal government has been on a push to attract first-time homebuyers in order to spur sluggish home sales. Recently, for example, the Obama Administration cut the annual insurance premiums for Federal Housing Administration, and allowed Freddie Mac and Fannie Mae to back loans with 3 percent down payments.

Rieman noted that HFA loans are already exempted from the Qualified Mortgage rules, indicating that CFPB recognizes that HFA loans are a special category of loans. However, he said that the trade groups are seeking a guidance statement from the CFPB, and is not seeking new regulations that would limit or overturn the loan officer compensation rule. ##

(Photo Credit: Wikipedia)

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Article submitted by Sandra Lane to – Daily Business News – MHProNews.