"Today's action signals a new era of enforcement to protect consumers against the cost of servicer runarounds," said CFPB Director Richard Cordray.
The Consumer Financial Protection Bureau's action against Flagstar Bank on Monday marked a series of firsts for the agency, including the first time it enforced its new mortgage servicing rules and the first time it banned a servicer from servicing new loans until fixes are made.
The regulator of Fannie Mae and Freddie Mac should require banks and mortgage lenders to obtain independent, third-party tests to ensure compliance with its guidelines, according to a government watchdog report.
At least two mortgage servicers say they are close to being released from an OCC enforcement order that required 14 of the nation’s largest bank servicers to fix flaws in their foreclosure reviews. But the OCC says it has set no timetable for freeing any of the banks from the 2011 order.
Despite regulatory constraints on servicing transfers that affect large players, increased compliance costs and capital ratio requirements are a bigger burden for smaller servicers to bear.
A plea for the Federal Housing Administration official to finish clarifying the rights of spouses unnamed on Home Equity Conversion Mortgages before she leaves office.
PennyMac became the third largest correspondent aggregator after banks turned their back on the mortgage origination channel. With banks now increasingly shedding servicing rights, PennyMac is poised to make a similar play in servicing.
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