FEB 8, 2013

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What We're Hearing

Court Ruling Won’t Bother CFPB

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WE’RE HEARING the Consumer Financial Protection Bureau is carrying on as if it is business as usual.

Despite all the noise about a court ruling invalidating recess appointments and legitimacy of the CFPB’s actions, bureau officials are still working on regulations, including a new servicing rule.

The CFPB issued a massive servicing regulation in mid-January that covers the mechanics of servicing, including expectations for error resolution and loss mitigation. Other sections address abusive force-placed insurance practices and providing informative periodic billing statements.

But that rule does not cover all the concerns that the CFPB has about servicing.

So servicers should be on notice that the CFPB wants to address servicing transfers and a proposed rule might be issued for public comment soon.

Bureau officials have heard stories about loans that went into default and then were transferred, which delayed intervention to bring the borrowers current or modify the loan.

When CFPB officials released the final servicing rule they indicated that they were working on a servicing transfer rule, according to Richard Andreano, an attorney at Ballard Spahr.

When servicing is transferred, the bureau wants to ensure there isn’t a hiccup in terms of considering troubled borrowers for loss mitigation. They don’t want a transfer to “exacerbate the situation,” he added.

Andreano also noted that CFPB will be watching the results of the mortgage and servicing settlements and other issues may come to their attention.

“We imagine that CFFB will continue to focus on the servicing area,” he said, which could lead to additional rulemaking.

WILD AND CRAZY GUYS: Frank and Brian from Think Big Work Small are two wild and crazy guys (in the best possible sense). They offer an entertaining and informative analysis of the mortgage and real estate industries almost every day. In today’s video they compare Jamie Dimon of Chase to Lance Armstrong, put the Tour de France yellow jersey on him, and suggest that Chase may be guilty of “performance enhancing loans,” a category that doesn’t exist but maybe ought to. They also suggest a visit to Oprah’s couch might be helpful for the Crazy Diamond. And enjoy that frat-boy set of theirs, with a guitar, drum kit, American flag and poster of Farrah Fawcett (are they old enough to remember that most angelic of Charlie’s Angels?).

MOST READ/E-MAILED CONTENT: This week, one item takes both categories. It’s Brian’s piece last Friday about the FHA’s MIP guidance. How long do you have to pay that FHA MI for? You may not be happy at the answer. FHA was in the news this week with Congressional hearings and was blasted by Rep. Jeb Hensarling for offering high-priced loans instead of sticking to its low-mod and first-time roots. Plus, it was competing with all the private jumbo lenders—oh wait, jumbo lending remains a vast desert that FHA is trying to make a market in! Can’t win for trying.

OH, THOSE VINERS: Lots of responses this week at mortgagegrapevine.com to a thread called “Breastaurants.” We’ll leave it to you to imagine what they are and whether or not our Viners are in favor. Instead, we’ll being you a more thoughtful thread on the pros and cons of social media. Do they bring in the leads or are they a big waste of time?

HIRE SQUAD: We believe the mortgage business will get out of its tepid recovery by private sector hiring. So we’ve been giving a shout out to any company that has ten or more net new hires. And we have another one this week. Real Estate Mortgage Network Inc. continues to expand its footprint in New Jersey with a new branch location in Monmouth County. Located in the Borough of Shrewsbury, this new REMN office will be led by Rene Stone. Stone will lead a team of nine associates including Michael Beagan, Dawn Benedickson, Tiffany Franco, Paula Frendel, William Green, George Monks, Brenda Valente, Roger Wilbert and Paul Winters.

Mark Fogarty is editorial director of the SourceMedia Mortgage Group and has been commenting on the mortgage market since 1984. Brian Collins is the group’s senior editor and D.C. bureau chief. He has worked the mortgage beat since 1988.

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