Lessons From the CFPB/Wells/Chase Order; FDIC Video on LO Comp; Training and Events
Don't forget that last Friday Ocwen Financial reached a settlement with a California regulator that will allow it to continue operating in the state. As part of a consent order with the California Department of Business Oversight, Ocwen must pay $2.5 million in penalties and agree to pay for a third-party auditor that will ensure that the firm complies with regulators' requests for information. That is good news for Ocwen although the company continues to have its detractors.
The industry continues to dissect the CFPB's RESPA actions against Wells Fargo and Chase, and there were rumors that retail management involved in the kickback situation have been let go. (Supposedly the LOs were terminated quite some time ago. I received this note from Brian S. Levy with Katten & Temple, LLP: "Rob, your note last Friday about the CFPB's RESPA actions against Wells and Chase expressed a lot of confusion and distress about how to interpret RESPA in light of recent regulatory activity by CFPB. While your distress and confusion is appropriate, my take is that these particular Consent Orders should, in some ways, be considered a trip back in time to when we all knew what a RESPA kickback looked like.
"CFPB alleged that Wells' and Chase's LOs received 'free' marketing assistance from the title company (such as mailers with postage paid) in return for referral of title and closing business from their loan customers. From my perspective, CFPB just asserted an 'old school' RESPA kickback violation. Everyone knows (or should know) that you can't get (or give) a thing of value (like marketing services), in return for referral of settlement service business, (like title insurance). Also unlike Lighthouse Title and other recent enforcement activity, here, (i) CFPB didn't need to stretch the law to identify a violation, (ii) the CFPB went hard (if not harder) after the recipients of the kickbacks instead of just the giver, and (iii) the defendants were more than capable of financing the tremendous potential costs of a defense had they chose to do so. As a result, 100 Wells LOs and 6 Chase LOs got fired and one former LO was fined $30,000 and barred from working as an LO for 2 years. In addition to paying their multimillion dollar fines, Wells and Chase are required to share the Consent Orders with their respective mortgage teams annually for the next 5 years. Like every good lender, both Wells and Chase have compliance training for mortgage employees like LOs, but CFPB was unimpressed, because even with compliance training, the violations were found to be extensive. No doubt, this should serve as (and was likely intended by CFPB to be) a cautionary tale for all LOs and their mortgage companies who are reminded to not only make sure their compliance training includes RESPA Section 8, but that everyone actually 'gets it'." Thank you Brian!
While we're on helping folks in their training, the Federal Deposit Insurance Corporation (FDIC) released the second in a series of three new technical assistance videos developed to assist bank employees in meeting regulatory requirements. These videos address compliance with certain mortgage rules issued by the Consumer Financial Protection Bureau (CFPB). The first video, released on November 19, 2014, covered the Ability to Repay and Qualified Mortgage Rule. The second video covers the Loan Originator Compensation Rule, and the third video, expected to be released in February, will cover the Servicing Rule. The three technical assistance videos are intended for compliance officers and staff responsible for ensuring the bank's mortgage lending operations comply with CFPB rules. The FDIC's technical assistance videos and additional information can be accessed here.
Let's see what else is out there for training and upcoming events of note.
Greater Midwest Lenders Association (GMLA) shared information regarding Company and MLO licensees per IDFPR Division of Banking. To view the information, click on the IDFPR announcement.
Silicon Valley CAMP Sales & Marketing Conference on January 29-30, 2015 will showcase products, companies, and networking that is necessary to succeed in today's mortgage industry. Know your options, for details click here.
Join Texas Mortgage Bankers Association (TMBA) for the Southern Secondary Market Conference scheduled on February 2nd-3rd. This 5-session event will cover the following topics: New Product Strategies, Perspectives on the Market for Mortgage Servicing Rights, GSE and MI Update, The New Normal of Secondary Marketing, and Demystifying Affordable Housing Finance. Click the link for registration.
AllRegs is providing three classroom trainings. Mortgage Compliance Classroom Course in Florida designed to further develop the mortgage professional's knowledge of core federal compliance topics. School of Mortgage Compliance also provides practical exercises geared to industry professionals to assist you in fully understanding these complex regulations. To register click the April 13-15 link. Servicing Quality Control concepts must be addressed when providing quality control as it relates to servicing loans. In this course, you will be directed to resources that will help keep you up-to-date on guidelines, tools, and best practices Classroom course scheduled on April 16. And the Quality Control interactive classroom course is designed to build upon your existing skills and knowledge so that you can successfully create best practices, policies and procedures, and develop and implement a quality control plan as it relates to origination for your QC staff. To register for this course click the April 16 & 17 Link.
Also available is the AllRegs instructor guided on-line course covering the topic, Taking the Steps to Mortgage Compliance Regulation. This course involves 5 weekly modules beginning March 4 - April 8, 2015 and is designed to provide a basic overview of federal mortgage regulations that apply over the life of a mortgage loan beginning at the point of origination and touching on each stage of the mortgage loan process through servicing. To sign up for this course, register here.
In Colorado, talk with the CMLA Lobbyist at 2015 Capitol Day. On February 3rd, THIS IS A FREE "CMLA MEMBERS ONLY" EVENT. Join CMLA as we visit with State Legislators, the CMLA Lobbyist and other speakers. At Capitol Day, you will meet with State Legislators, learn about effective legislative advocacy, observe the House and Senate floors in action, and hear about pending bills regarding the mortgage industry. In order to take advantage of this event, register here.
Fannie Mae Servicer Education is conducting Webinars to instruct Lenders on Updates to Foreclosure Bidding and Third Party Sales. These informational sessions are designed to help servicers understand Fannie Mae's updates to foreclosure bidding instructions and third party sales as covered in Lender Letter LL-2014-09. This course explains the policy changes and the process for requesting foreclosure sale bidding instructions from Fannie Mae prior to a scheduled foreclosure sale. Two webinar training days available the first week of February, for details and registration, click here.
Mortgage Bankers Association of Florida (MBAF) 2015 Secondary Market Conference is coming on February 11th-13th. For all the details and registration information, click here.
Flipping over to the markets, the focus continues to be overseas but we did have some news yesterday. U.S. Durable Goods Orders decreased -3.4% to $230.5 billion in December. This decrease, down four of the last five months, followed a 2.1 percent November decrease. And November's S&P/Case-Shiller Home Price Indices told us that house prices are still increasing, but at a slower rate. The composite index of 20 metropolitan areas gained 4.3 percent in November from the prior year, the slowest since October 2012.
For mortgage related news, the weather was a factor on Wall Street, and reports show that mortgage bankers were more active early on, with a quick rush of several hundred million TBA sold as a pipeline hedge. And FHFA Director Mel Watt appeared before the U.S. House of Representatives Committee on Financial Services, giving an overview on FHFA's reach, the GSEs financial conditions, and some hints on forward g-fee maneuvers. All in all agency MBS prices didn't move much although they improved slightly.
Here Wednesday morning we've already had the MBA's application numbers. Quantifying what plenty of lock desks already knew, the MBA told us (in its survey of 75% of retail apps) apps fell 3.2 percent in the week ended Jan. 23 with refis down about 5% and purchases roughly unchanged. There is no market-moving news yet, aside from European chatter, until our Federal Open Market Committee concludes its meeting. Don't look for any rate change, but the monetary policy statement, released at 2PM EST, often makes for interesting reading. We closed the 10-yr Tuesday at 1.83% and in the early going today we're back down to 1.80% with agency MBS prices better a shade.
Jobs and Announcements
First a correction. Yesterday a bulletin appeared for TruHome Solutions, LLC, which is seeking a highly motivated, driven and experienced Controller to manage, oversee and direct the overall Accounting Operations of TruHome Solutions. The site for the company is www.truhomesolutions.com; further questions or interest should be directed to Karen Steen.
On the retail production side of things, Hilltop Holdings (NYSE: HTH) - parent company of national mortgage lender PrimeLending - was recently ranked No. 18 on Forbes' annual ranking of the 100 largest publicly-traded banks and thrifts. The list used the financial data of SNL Financial to determine the best and worst among the biggest banks regarding asset quality, capital adequacy and profitability of the 100 biggest banks by assets. The final component of the rankings was revenue growth for the last 12 months based on data from FactSet Research Systems. Click here for the full story. If you are an experienced loan officer or branch manager interested in a fast-growing company with dependable strength, check out PrimeLending or e-mail careers@primelending.com.
"Mortgage Solutions Financial continues to punch above their weight. Greg Grandchamp is building a team of elite account executives across the country. Amazing concept - it seems that product, price and service make for a pretty great production environment. MSF has hooked up with Accenture Mortgage Cadence and is rolling out an impressive LOS system, continues to expand their agri-loan product, and is now offering a path for no-recourse on loan originations. Add a management team that encourages input from the field - and actually listens - and you can understand their success. If you're anywhere in CA or TX; the east; the upper Midwest - and want to build a true relationship-driven business that is consistent and reliable - you need to contact Greg Grandchamp at MSF and at least hear what he has to say."
And Freedom Mortgage is actively seeking a seasoned Account Executive for the Oregon market. "Freedom Mortgage has emerged as the new leader in the wholesale and mini-correspondent channels and offers competitive FHA, VA, conventional and jumbo product offerings. Freedom is a FNMA direct seller/servicer and top 2 GNMA issuer in the country with nearly $50 billion in its servicing portfolio! Have this market virtually all to yourself!" Please send all inquiries to Steve Hamerski for more information. Freedom Mortgage Corporation is a national, full service mortgage banker with retail, wholesale, correspondent and commercial origination and servicing operations. The company is licensed in all 50 states, DC and Puerto Rico.
For some bad news, CohnReznick, the 10th largest accounting firm in the US, announced it is exiting the mortgage business.