Compliance & Regulation

Sen. Sherrod Brown, D-Ohio, and Rep. Brad Miller, D-N.C., late this week introduced a comprehensive bill that would force mortgage servicers to act in the best interests of investors while pressuring them to engage in loan modifications.

The mortgage insurance industry hopes that banking regulators recognize the value of their product when finalizing their ‘qualified residential mortgage’ test -- but so far their pleas have fallen on deaf years.

Acting Comptroller of the Currency John Walsh defended bank regulators Thursday for moving forward with an enforcement action against the top 14 mortgage servicers even while several of those banks continue to negotiate with state attorneys general and other federal agencies.

The chief congressional proponent of the risk retention rule says federal regulators have gone too high in setting a 20% downpayment requirement on single-family loans that meet the "qualified residential mortgage" test.

Perhaps, loan brokers should just stop battling the Federal Reserve over its loan officer compensation rule, adapt, and move on to the next stage of their career. Or as loan broker/banker Chris Sorensen put it: "This isn't as bad as people think. Once the whining and crying is over, brokers will pick their comp rate and start competing with the big boys."

An enforcement action against a bank is almost always bad news for the institution involved. But a federal bank regulators' order released Wednesday against the top 14 mortgage servicers was likely to help, not hurt, the banks, providing them with added leverage as they attempt to negotiate a separate settlement with the 50 state attorneys general and several federal agencies.

The Federal Housing Administration has fined a Brookline, Mass., lender $72,500 and ordered the firm to reimburse the agency for past insurance claims.

The banking consent agreements signed by some of the nation's largest residential servicers on Wednesday require the firms to stop the practice of "dual tracking" where at risk homeowners start the loan modification process but also are officially put into a parallel foreclosure pipeline.

Federal banking regulators Wednesday afternoon dropped their regulatory "bomb" on the nation's largest residential servicers — and two of their top outside vendors — accusing the firms of a "pattern of negligence and misconduct" tied to the processing of loans.

JPMorgan Chase saw its mortgage-related revenue get hammered in the first quarter, falling a stunning 75% to $696 million (compared to 4Q), as originations declined and the firm focused resources on its massive servicing portfolio and dealing with legal issues tied to that business.