Top Story Lending Related

The Office of the Comptroller of the Currency has announced the termination of mortgage servicing-related consent orders issued in 2011 against JPMorgan Chase Bank, N.A. (JPMorgan), and EverBank (the agency had determined the banks currently comply with those orders), and assessed civil money penalties against the banks for previous violations of the orders. A $48 million civil money penalty was assessed against JPMorgan for violating its consent order from October 1, 2014, through June 30, 2015, and a $1 million civil money penalty was assessed against EverBank, for violating its consent order by improperly charging fees related to mortgage electronic registration system assignments, property inspections, and late fees to approximately 47,000 borrowers between January 2011 and March 2015. EverBank has begun making $1.6 million in remediation payments to affected borrowers.

In addition to its relaxation of the annual privacy notice requirements of the Gramm-Leach-Bliley Act (see our December 14, 2015, Top Story), Congress removed a single word from two key provisions of the Truth in Lending Act with the "Helping Expand Lending Practices in Rural Communities Act of 2015" (also known as the "HELP Rural Communities Act of 2015"), Title LXXXIX of the FAST Act, enacted on December 4. The word "predominantly" was removed from the phrase "operates predominantly in rural or underserved areas" in sections 129C and 129D of the TILA; the phrase addresses one of the criteria for a small creditor to be permitted to make balloon-payment qualified mortgage loans and exempted from the escrow requirement for higher-priced mortgage loans. Although the TILA changes were effective on December 4, the Regulation Z verbiage implementing those provisions (section 1026.35(b)(iii)(A), which is also referred to by section 1026.43(f)(6)) will have to be amended by the Bureau before the TILA amendments will provide any benefit to lenders. With "predominantly" as part of the TILA requirement, the Bureau simply had to state that more than 50% of a lender's covered loans were made in rural or underserved areas. Now the Bureau will have to determine what constitutes "operating" in those areas. Ironically, that could prove more challenging to define.

The FFIEC has announced the HMDA and CRA data entry data software for 2016 is now available.

The Federal Reserve System has updated its FRB/US model package as of December 30, 2015. The main FRB/US model package is a self-contained set of equations, data, programs and documentation that enables various types of simulations and provides information about the model's structure.

The FHFA has released its mortgage index for November 2015. Nationally, interest rates on conventional purchase-money mortgages decreased from October to November, according to several indices of new mortgage contracts. The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 3.85 percent for loans closed in late November, down 4 basis points from 3.89 percent in October. The average interest rate on all mortgage loans was 3.86 percent, down 4 basis points from 3.90 in October. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.08 percent, down 4 basis points from 4.12 in October. The effective interest rate on all mortgage loans was 4.01 percent in November, down 3 basis points from 4.04 percent in October. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage. The average loan amount for all loans was $319,800 in November, up $11,200 from $308,600 in October.

The Federal Housing Finance Agency (FHFA) moved its headquarters in January 2012, and the Postal Service changed the FHFA's ZIP Code in November 2015. The FHFA has published a formal notice in the Federal Register amending mentions of its address in several FHFA regulations to:

400 7th Street SW
Washington, DC 20219

The Federal Reserve System has released the October 2015 G.20 Finance Companies report of owned and managed receivables outstanding and auto loans: terms of credit.

A proposed consent order has been filed by the Bureau in federal court that would resolve a lawsuit against Frederick J. Hanna & Associates, a Georgia-based law firm, and its three principal partners, for operating an illegal debt collection lawsuit mill. The CFPB complaint alleged that the defendants with violating the Dodd-Frank Act’s prohibition on deceptive practices as well as the Fair Debt Collection Practices Act. The order, if approved by the court, would bar the firm and its principal partners from illegal debt-collection practices, including filing lawsuits without being able to verify the consumers’ debt is owed, and intimidating consumers with deceptive court filings. The order would also require the firm and its principals to pay $3.1 million to the Bureau’s Civil Penalty Fund. See our Penalty Page entry for further information.

The Securities and Exchange Commission has issued its two annual staff reports on credit rating agencies registered as nationally recognized statistical rating organizations (NRSROs). The reports show that NRSROs have made operational improvements and have enhanced process accountability, controls and governance, and that smaller NRSROs have made competitive inroads in certain rating categories. The annual examination report summarizes the staff’s findings from the examinations of each NRSRO as required by the 2010 Dodd-Frank Act. The annual report to Congress mandated by the 2006 Credit Rating Agency Reform Act discusses the state of competition, transparency, and conflicts of interest at NRSROs.

The Federal Reserve Board has released the third quarter 2015 household debt service (DSR) and financial obligations ratios (FOR) listed as a percentage of disposable personal income, seasonally adjusted. The FOR was down, the mortgage DSR down, the consumer DSR up, and the combined total unchanged from the second quarter of 2015.