Consumer Financial Protection Bureau Archives

WASHINGTON, D.C. /ScoopCloud/ -- The Mortgage Collaborative (TMC) hosted its second Advocacy Committee trip to Washington, DC June 4-6, 2024, with 13 of its IMB and depository Lender Members meeting with key federal agencies, including the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Housing and Urban Development (HUD), Ginnie Mae, Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac to discuss the impact of recent and upcoming policy changes on small to mid-size lenders.

Tom Sullivan, SVP, First Commonwealth Bank, speaking on the TMC webcast "Last Week in Mortgage Today," shared insights from his experience in DC: "Being a part of both trips has shown me that repeating similar efforts yields better results. My favorite part was hearing how different regions impact each other. The sincere conversations we had with each agency will influence the industry in a phenomenal way."

At TMC's meeting with the Consumer Financial Protection Bureau (CFPB), TMC Lender Members asked about "junk fees" in response to the recent CFPB shift in focus to monitoring third-party transaction fees including credit bureau fees and appraisals and increases in soft pulls. Loan officer compensation was also discussed with attending lenders requesting greater flexibility in compensation regulations to improve margins on affordable lending products and market competition. The CFPB signaled it is open to solutions, and TMC will draft a follow-up response with member input. TMC also shared concerns about rising credit verification costs and their impact on consumers, with the CFPB committing to further investigation.

At TMC's meeting with HUD, Lender Members talked about Federal Housing Administration (FHA) life of loan mortgage insurance premium (MIP), in follow-up to a recent TMC advocacy letter. Lenders expressed concerns over high APRs and the need for refinancing to remove MIP. HUD reiterated its stance on maintaining current policies but expressed its aims to reduce FHA loan costs. Lenders asked HUD if they were open to expanding FHA guidelines for 100% financing. HUD said they were open to exploring new programs, albeit requiring congressional approval.

TMC discussed repurchases with the FHFA, which promised to investigate the issue. FHFA announced they are creating an advocacy advisory committee in response to advocacy letters and visits like TMC's. FHFA gave feedback on the Bi-merge credit model ensuring lenders do not have to process loans differently for various agencies. FHFA reiterated that the move to bi-merge credit is optional. Homeowners/Flood Insurance costs were also discussed with FHFA pointing to its ongoing efforts to address affordability and replacement costs, particularly in high-cost areas.

During its meeting with Ginnie Mae, TMC Lender Members discussed the impact of rising insurance costs and consumer credit card debt on delinquencies. Ginnie Mae is monitoring the situation and collaborating with other agencies for solutions.

In TMC's respective meetings with Freddie Mac and Fannie Mae, those agencies committed to investigating the increase in appraisal-related repurchase requests and providing tools for appraisal certainty. Additionally, the discussions covered the rollout of the new credit model, with Freddie Mac confirming their preparedness for the transition to bi-merge credit and introduced the upcoming LPA Choice, which will offer clearer feedback on borrower assessments. They indicated that no major changes are anticipated in how their Automated Underwriting System (AUS) will assess credit during this transition. The TMC advocacy contingent also asked about second home pricing, to which Fannie Mae indicated, no new changes are expected for second home pricing variances.

About The Mortgage Collaborative:

The Mortgage Collaborative (TMC) is a membership-driven* organization dedicated to empowering mortgage lenders across the United States through networking, education, and advocacy. Our goal is to support the success of our members by fostering an environment of collaboration and innovation. For more information, visit https://www.mortgagecollaborative.com/

*TMC Lender Members, we want to hear from you! If you have seen an increase in repurchase requests, please send your data to Melissa Langdale so we can forward all feedback to our agency contacts. Your input is highly valued.

The Mortgage Collaborative (TMC) hosted its second Advocacy Committee trip to Washington, DC June 4-6, 2024, with 13 of its IMB and depository Lender Members meeting with key federal agencies, including the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Housing and Urban Development (HUD), Ginnie Mae, Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac to discuss the impact of recent and upcoming policy changes on small to mid-size lenders.

Related link: https://www.mortgagecollaborative.com

ATHENS, Ga. /ScoopCloud/ -- FormFree(R) Founder and CEO Brent Chandler today responded to this week's news that Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger indicated the bureau's decision to propose amending the Ability to Repay/Qualified Mortgage Rule so as to "move away" from debt-to-income (DTI) calculations as a mortgage underwriting factor:

First, I commend the CFPB for their courage to engage in thoughtful discussion of alternative methods for assessing a borrower's ability to afford a loan and calculating what is affordable for them specifically.

DTI is an archaic evaluation that has outlived its usefulness for consumers, and particularly mortgage-seeking consumers. DTI has left tens of millions of consumers in the cold because they do not meet this threshold, when in fact, based on their actual cash flows, they could afford a loan and possibly even be a superior borrower to someone who does meet it.

With the advent of and 10 years' success using digital data to dependably deliver voluntary 'source truth' on users' personal solvency or money management lifestyle, we can calculate ability to pay definitively based on residual and discretionary income.

In other words, digital financial tools allow us to clearly identify what consumers can afford based on their money management habits better and more transparently than a rigid one-size-fits-all formula. That's why ability to pay is the best consumer borrowing risk indicator.

It is gratifying that the CFPB and the powers that dictate what makes a safe and solvent loan have begun acknowledging technology as a useful tool for creating more efficient, safer, more secure, more accessible models of lending.

Our board member and close industry advisor Faith Schwartz reminds me that the myriad policy considerations driving the CFPB's proposal are not limited to technology-driven advances. While I am not blind to other considerations, I see the world through the lens of how technology is driving positive change. I am fascinated by and ardent about the doorway we are finally stepping through as an industry that lives or dies, fails or thrives, based on its ability to lend responsibly to consumers.

About FormFree

FormFree(R) is a market-leading fintech company whose revolutionary products AccountChek(R) and Passport(tm) are changing the credit decisioning landscape and encouraging lenders nationwide to incorporate a more holistic view of each borrower's financial DNA. To date, thousands of U.S. lenders and brokers have ordered millions of FormFree's patented verification reports representing over a trillion dollars in loan verifications.

FormFree delights borrowers and lenders with a paperless experience, reduces origination timelines by up to 20 days and offers automated analysis and standardized delivery to lenders and investors using a secure ReIssueKey(tm). A HousingWire TECH100(tm) company for four consecutive years, FormFree is based in Athens, Georgia.

More information: https://www.formfree.com/ or follow FormFree on LinkedIn.

Twitter: @RealFormFree #digitalmortgage

FormFree Founder and CEO Brent Chandler today responded to this week's news that Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger indicated the bureau's decision to propose amending the Ability to Repay/Qualified Mortgage Rule so as to "move away" from debt-to-income (DTI) calculations as a mortgage underwriting factor.

Related link: https://www.formfree.com/

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Tag Archives: Consumer Financial Protection Bureau

The Mortgage Collaborative Advocates for Lender Concerns at Federal Housing Agencies During June DC Visits

FormFree Founder Brent Chandler Commends CFPB Proposal to Eliminate DTI, Citing Ability to Pay as a ‘Best Consumer Borrowing Risk Indicator’