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News From NAMB: July 23, 2015

John Councilman
Jul 23, 2015

You may have noticed that News From NAMB is not just links to other media stories but also goes to primary sources. News From NAMB is different because we find important information that may not be reported elsewhere and we comment on why it is relevant to you, often in a fun way. Best of all, it is free to NAMB members. News From NAMB is sponsored exclusively by United Wholesale Mortgage

United Wholesale Mortgage (Advertisement)
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G-fees to pay for highways?
Back in 2011, Congress and the President hiked Fannie and Freddie’s fees to give a FICA cut to workers. That G-fee hike was supposed to expire at the end of 2021, but would be extended until 2025. The Drive Act, would take $1.9 billion dollars from homebuyers to fund highways. The bill cites FHFA’s recent review of G-fees and found “no compelling economic reason to change the general level of fees.” FHFA also takes the profits of Fannie and Freddie and sends them off to Treasury for general use. NAMB is calling for the CFPB to require the disclosure of G-fees on the new TRID disclosures since they are perhaps the largest single expense item on some loans.

It’s official ... TRID starts October 3rd
The CFPB posted its revised Final Rule in the Federal Register. Basically, the rule just revised the date and made two technical corrections. Commenters had asked the CFPB to delay the rule until the end of the year. They also requested a hold-harmless period.  The CFPB gave neither. The Director did tell Congress last week that he didn’t think the Bureau would take legal action right away against those making a good-faith effort to comply. Letters from Congress asking for a true hold-harmless appear to have been ignored.

Number two guy leaves CFPB with no job
Steve Antonakes, Associate Director of the CFPB, is heading home to Massachusetts. Antonakes cited family reasons. "Having commuted from Boston for nearly five years, I have logged hundreds of thousands of miles and missed entirely too many class plays, teacher conference meetings, and little league games," Antonakes wrote. However, many believed Antonakes was drawing too much fire to the CFPB with his policies. A statement from the US Consumer Coalition went so far as to say his policies were harming consumers and the CFPB. The CFPB just announced Antonakes will be temporarily replaced by the CFPB’s general counsel Meredith Fuchs. David Bleicken will also pick up some of the duties.

CFPB releases top mortgage offenders
The CFPB not only lists all of the consumer complaints in narrative form on its Web site, they are now releasing a monthly report that lists the top problem areas and the top problem companies. Mortgage complaints were up 10 percent over the previous month, coming in second in complaint areas, only behind debt collection. Bank of America won the crown for the most complaints over the past several years with nearly double those of anyone else, even including companies like Ocwen and Equifax. Last month, Equifax edged them out for the title.

Lead generation company says “Go Away” to CFPB
Lead Source, was hit with a Civil Investigative Demand (CID) that requires oral testimony about their activities. The company operates one of those Web sites that looks like they are a lender, but they deny being either a lender or broker in the fine print. Lead Source has filed a petition to set aside the CFPB inquiry, claiming the law does not cover them. They claim an exception in the law for, “time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.” The interesting part is that ads normally specify an advertiser where these sites do not.

CFPB can never be as good as Angie’s List
Hundreds of thousands of consumers have posted narrative complaints on the CFPB complaint site. The odd thing is that lenders responses are all things like “Company chooses not to provide a public response” or “Company believes it acted appropriately as authorized by contract or law” or “Company disputes the facts presented in the complaint.” The reason the company cannot respond specifically is because it could violate financial privacy rules by presenting evidence in its defense. So, consumers get a one-sided view of things that could easily cause them to avoid a good company and choose a bad one. It seems the CFPB has picked yet another area where they can’t properly provide a service to consumers that is as good as what is publicly available.

NAMB offers Webinar on FHA changes
Join NAMB, in conjunction with Paramount Residential Mortgage Group, on Wednesday, Aug. 19, 2015 from 1:00 p.m.-2:00 p.m. EDT for a look at the changes coming with the new FHA Handbook effective for cases numbers assigned on or after Sept. 14. The changes are subtle but massive. FHA just released another 120 FAQs on the changes. Sign up now!

Consumer Reports slams reverse mortgages
Consumer Reports magazine just published an article entitled, “Don't be suckered into buying a reverse mortgage.” That is somewhat of a strange title since you don’t “buy” one anyhow. Nonetheless, there is some truth to negative aspects in the article but little real guidance. There is no question that some people are talked into reverse mortgages that are not appropriate. It is also true that the TV ads don’t tell the downside. Of course, what ads do? This is a product that is not for everyone but is invaluable for others. As LOs, we need to be diligent to make certain it is a good fit.

Homes prices highest in history
In an amazing revelation by the National Association of Realtors, the median home price has just exceeded the previous high in 2006. Home sales are up as well. The only down side is that affordability is becoming more elusive for many.

Cruz says abolish the CFPB
Sen. Ted Cruz and fellow Texan Rep. John Ratcliffe are introducing legislation in the Senate and House to abolish the CFPB. Cruz says, “Don’t let the name fool you. The Consumer Financial Protection Bureau does little to protect consumers.” Already, Ratcliffe’s bill has 46 co-sponsors.

Top banking Dem says Shelby Dodd/Frank Bill is DOA
“We understand that that today he [Shelby] is bringing forward the bill that was voted out of committee along a party-line vote that slices away major parts of Dodd-Frank,” Sherrod Brown said at the Center for American Progress. Shelby’s bill would bring the CFPB under the appropriations process and replace its director with a five-member commission. This is particularly interesting since it is being included as part of the larger appropriation bill that could lead to a government shutdown. Brown says it won’t get 60 votes and wouldn’t be signed by the president.

Were Fannie and Freddie seized needlessly?
That question is becoming ever more perplexing. Right now, the GSEs are in conservatorship. That is a never-never land where the government runs them rather than a board of directors. The interesting part is that the government has the right to buy 79.9 percent of their stock at one thousandths of a cent at any time. So, even if they are taken out of conservatorship, the government makes the big bucks. And why aren’t they out of conservatorship? Good question since the conservator, FHFA says, “Conservatorship is intended to stabilize troubled institutions with the objective of maintaining normal business operations and restoring financial safety and soundness.” So why aren’t they out? Now, a federal judge is requiring Treasury to reveal documents on why they seized them in 2012 when the crisis was under control?

Will government control of Fannie and Freddie destroy them?
Recently, Fannie, Freddie and FHA all have pushed to allow less credit-worthy borrowers buy with very little down. This is all happening under the politically appointed FHFA conservatorship. The Washington Times and Cato Institute say this is a path down the same road that lead to disaster last time. Housing Wire points out there are some significant differences though, including the fact that everyone is proving income.

CFPB to hold e-Closing Forum
The CFPB sees electronic closings as the future of mortgage closings. Last year, the agency released a report on what they perceive as the role of technology in the closing process. Now, they are ready to move forward with implementation. NAMB and other industry stakeholders will be attending a forum on Aug. 5 in Washington, D.C. to hopefully make the process work efficiently and painlessly. This is particularly important considering the time lost in the new TRID disclosure process. You can actually watch some of the event live on the CFPB Blog.

Millennials say they are saving for a home, many are buying
A recent study by the Collingwood Group revealed that millennials want to buy a home. According to Collingwood, about 70 percent of the Millennials surveyed said that they were very likely or somewhat likely to give up some of those modern day conveniences such as Starbucks and their cellphone plans and cable TV to save money for a downpayment. They are going to need some raises as well in a lot of cities even if they just rent. Collingwood’s chairman believes the publicity about rate increases is pushing buyers to get off the fence and become owners.

Win a free trip to Las Vegas!
NAMB is offering you chance to win a free to trip to NAMB National in Las Vegas this October. The prize goes to the person who comes up with the best reason they are a mortgage pro. You may submit text (no more than two sentences), a picture with text, or a video. Entering the contest is a simple. You must start your post with “I am a #mortgagepro because …” to be a valid entry. Enter today by posting your reason to Facebook, Twitter or Instagram.

Rate outlook
Some people are saying the Greek crisis is over. They have agreed so far with the austerity programs forced on them by the EU. How long that will last is the question.

Weekly jobless claims were 255K versus the expected 278K. Continuing claims were 2207K vs. the expected 2212K.

Leading economic indicators rose 0.6 percent versus the expected 0.2 percent increase. We have a 10-year Treasury auction this afternoon.

Despite the stronger than expected economic news, mortgage bond prices were flat this morning. The only news tomorrow is new home sales. No big economic news to rattle the cage.


John Councilman, CMC, CRMS of AMC Mortgage Corporation in Ft. Myers, Fla. is president of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (239) 267-2400 or e-mail [email protected].

Jul 23, 2015