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CFPB Says It Has No Statute of Limitations
As people dig deeper into the PHH case, many shocking statements have been revealed. Most notably, beyond the Director’s assertion that he can overrule administrative judges, is the claim that CFPB administrative actions have no statute of limitations. In his decision, the director says, “RESPA likewise contains a three-year statute of limitations for actions brought by the Bureau … when the Bureau sues to enforce RESPA in court.”
“But the CFPA gives the Bureau a choice: it may enforce laws administratively or in court. The section of the CFPA that authorizes the Bureau to enforce laws through administrative proceedings does not contain a statute of limitations.”
It is pretty scary to think the CFPB could fine you for loans done 20 years ago. This case is also particularly interesting in that the CFPB said an earlier HUD interpretive letter was wrong in its interpretation of RESPA to prevent having to pay $109 million now, even though the case is being appealed, PHH has filed a motion to stay the Director’s order.
NAMB Offers Webinar on FHA Changes
Join NAMB, in conjunction with Paramount Residential Mortgage Group (PRMG), 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. 14th. The changes are subtle, but massive. FHA just released another 120 FAQs on the changes. Sign up now!
Golding Lays Out His Role at FHA
In an interview with M-Report, Ed Golding shared his vision and duties as head of FHA. Golding is running FHA from a newly created position called “Principal Deputy Assistant Secretary (PDAS)," which has drawn fire from Congress since it doesn’t require Congressional approval as does becoming FHA Commissioner. Golding pointed out that the PDAS title is used at other government agencies. One of his priorities is to have “clear, concise policy.” He sees FHA as particularly important to first-time buyers and minorities. Golding’s appointment is apparently the subject of a House Financial Services hearing Friday titled, “The Future of Housing in America: Oversight of HUD’s Public and Indian Housing Programs.”
CFPB Receives 777 Comments on TRID Delay
It is ironic that the closing date for comments on the TRID delay was 7/7 and they received 777 comments. We hope that means it is lucky for us. Lucky would be if they implemented any of the pro-industry comments. Quite a few requested there be a true safe harbor or delay in the implementation date until Jan. 1 or beyond. NAMB is supporting legislation that would mandate a true hold-harmless period.
Small Companies Gaining GSE Market Share
The Federal Housing Finance Agency (FHFA) just released an analysis of 2014 G-Fee data. To no one’s surprise, G-fees have steadily increased from 0.22% to 0.58% of the loan. Still, private capital has little interest in competing with Fannie and Freddie. One interesting takeaway was how much of the market is being captured by smaller companies. In 2011 companies outside the top 100 captured only eight percent of the market. In 2014, these smaller companies took a 28 percent market share. The gain for small companies is narrowing of the G-Fee spread from eight basis points to only two basis points.
House Examines Dodd/Frank on Its 5th Birthday
The House Financial Services Committee will hold a full-committee hearing on Thursday entitled, “The Dodd-Frank Act Five Years Later: Are We More Stable?” The hearing will examine the law’s impact on the financial services industry, consumers, American competitiveness, and financial stability. It is interesting to see a labor union, the AFL-CIO, in the lineup to testify.
Detroit Newspaper Blames Lenders and Government
The Detroit Free Press says lenders charging high interest rates that they refuse to renegotiate is a big cause of Detroit’s problems. But the paper doesn’t stop there. It blames the Community Reinvestment Act for pushing lenders to make loans to people who couldn’t afford them. In another slam at government, the article blames high real estate taxes.
Overtime for LOs, Processors, Gets Huge Boost
This is such a big issue for mortgage companies that the MBA took it to the Supreme Court and lost. Many originators are entitled to overtime since a 2010 Department of Labor ruling. Currently, if the company is paying more than $455/week, the employee is likely not entitled to overtime. That figure will jump to $970/week under a new proposed rule. NAMB has always believed commissioned originators do better than salaried LOs. For small shops, this may be a windfall since big companies will likely be laying off originators during leaner times and may not rehire.
Holder Defends Fines Rather Than Prosecution
Eric Holder, the U.S. attorney general who presided over the financial crisis, said the big fines he levied did more to change bank culture than prosecuting bank officials. In an interview with the Financial Times, Holder said the fines were better than “making an example of people.” Many people disagree since the fines penalized shareholders rather than those who committed the wrong-doing. One thing in bank culture has certainly changed and that is their desire to securitize or portfolio mortgages.
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.
The Political Front
Just in case you think the Greek people and politicians saying no to fiscal cuts would never happen in the U.S., consider this. Sen. Bernie Sanders, a left-wing presidential candidate said, “I applaud the people of Greece for saying ‘no’ to more austerity for the poor, the children, the sick and the elderly.” Sanders is holding the title of farthest left but O’Malley is not far behind. The United States has no small amount of debt itself. U.S. social programs and federal pensions are over 50 percent of spending and growing quickly.
The minutes of the last meeting of the Federal Reserve were favorable to rates. Inflation is still running well below two percent and Gross Domestic product is not gaining ground. The international Monetary Fund is reported to be pressuring the Fed not to raise rates this year. It is clear that Fed is still concerned about Greece and other countries.
Europe’s favorite pastime has become saving Greece. One day they are going to let Greece totally go and the next day, they are still playing footsie with them. They are meeting again Sunday. So far, Greece’s problem have had little or no impact on the other Eurozone economies. Greece is not the only Eurozone country with a shaky economy. Spain and Portugal are in poor economic health as well. Now we Puerto Rico likely to default and China’s stock market is falling through the floor. No wonder the Fed is reluctant to raise rates.
Now, the U.S. must be getting concerned and is taking sides. Treasury Secretary Lew is pushing countries like Germany to forgive some Greek debt. The White House must have realized this may have more impact than previously thought.
Mortgage rates has nice gains earlier in the week and that has slowed as traders expect some flattening or even economic good news in the next few days. Weekly jobless claims today were as expected. Tomorrow, we have the Consumer Price Index and Housing Starts. Both could affect rates up or down a bit.
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].