Top Story Lending Related

The Federal Housing Finance Agency (FHFA) has released its second quarter Foreclosure Prevention Report which shows that Fannie Mae and Freddie Mac completed 48,438 foreclosure prevention actions in the second quarter of 2016, bringing the total number of foreclosure prevention actions to more than 3.7 million since the start of the conservatorships in September 2008. The report also shows that the serious delinquency rates of Fannie Mae and Freddie Mac loans declined to their lowest levels since 2008.

The FHFA index for August 2016 indicates that interest rates on conventional purchase-money mortgages decreased from July to August, according to selected indices of new mortgage contracts. The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 3.58 percent for loans closed in late August, down 4 basis points. The average interest rate on all mortgage loans was 3.59 percent, down 4 basis points. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 3.74 percent, down 6 basis points. The effective interest rate on all mortgage loans was 3.72 percent in August, down 5 basis points. 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 $322,700 in August, down $3,000.

The Office of the Comptroller of the Currency has published a final rule and guidelines establishing standards for recovery planning by insured national banks, insured Federal savings associations, and insured Federal branches of foreign banks with average total consolidated assets of $50 billion or more (Final Guidelines). The OCC is issuing the Final Guidelines as an appendix to its safety and soundness standards regulations, and the Final Guidelines will be enforceable by the terms of the Federal statute that authorizes the OCC to prescribe operational and managerial standards for national banks and Federal savings associations. The guidelines become effective January 1, 2017, with phased-in compliance dates over 18 months from that date, with the largest banks (total assets of $750 billion or more) required to comply by July 1, 2017.

• Final Rule and Guidelines (81 FR 66791)

The Federal Emergency Management Agency (FEMA) has published a final rule in this morning's Federal Register identifying unincorporated areas of Louisa County, Virginia, as a community where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that is scheduled for suspension on October 31, 2016, for noncompliance with the floodplain management requirements of the program.

The Consumer Financial Protection Bureau has published at 81 FR 66930 in this morning's Federal Register a Notice of Bureau Official Approval under ECOA concerning the new Uniform Residential Loan Application (URLA) and the collection of expanded HMDA information about ethnicity and race in 2017. Under Part III of the Notice, the Bureau approved (but does not require) the collection of such information for applications received during calendar year 2017, even though Regulation C doesn't mandate the collection of the expanded data until January 1, 2018. The Notice says the Bureau believes the option to begin collecting the expanded data may provide creditors extra time to implement the changes needed to comply with the updated HMDA rules by January 1, 2018.

For reporting 2017 data on applications on which final action is taken during 2017, only the aggregate categories and codes in the filing instructions for data collected in 2017 will be used, even if applicants have self-identified using the expanded "disaggregated" categories. For applications taken in 2017 on which final action is taken on or after January 1, 2018, institutions can optionally submit data using disaggregated categories if provided by applicants instead of using the transition rule for those submissions.

The CFPB complaint snapshot this month spotlights money transfer complaints. The report shows that consumers continue to experience issues when attempting to resolve problems with disputed transactions. The report also highlights trends seen in complaints coming from Pennsylvania.

A HUD press release has announced that the Federal Housing Administration (FHA) has published at 81 FR 66565 in today's Federal Register proposed new regulations governing the approval process for condominium developments. FHA proposes to reinstate single unit approvals in unapproved condominium developments and to require condo projects to recertify their approval status every three years rather than the current two-year requirement. The proposal would also create a range of thresholds required for FHA approval including the minimum owner-occupants in approved condo developments and limits on commercial/non-residential space. Ultimately, FHA will have the ability to specify new owner-occupancy, commercial/non-residential, and single-unit thresholds within the proposed ranges through a notice, handbook or mortgagee letter. Comments are due by November 28, 2016.

HUD has announced the awarding of $3.3 million in grants to support research to reduce housing-related health issues, and more than $14 million to help low-income housing residents secure higher paying jobs.

The Consumer Financial Protection Bureau (CFPB or Bureau) and the California Department of Business Oversight (DBO), after a coordinated investigation, have separately announced settlements with Flurish, Inc., doing business as LendUp, requiring the firm to make restitution to consumers.

The CFPB found that the company did not give consumers the opportunity to build credit and provide access to cheaper loans, as it claimed to consumers it would. The Bureau has ordered the company to provide more than 50,000 consumers with approximately $1.83 million in refunds. The company will also pay a civil penalty of $1.8 million to the Bureau's Civil Penalty Fund.

The DBO found over 385,000 violations of two state consumer protection laws and of the Federal Truth in Lending Act in examinations under those laws and ordered LendUp to pay $1.62 million in consumer refunds, a $100,000 penalty and $965,462 in costs. For details on the settlements with Flurish, Inc., see "LendUp penalized by CFPB and California for violations," in our Penalties pages.

The CFPB has posted an article informing student loan borrowers they have the right to make extra payments (known as prepayments) at any time, without any fees or penalties. If one can afford it, paying a little extra each month or making a lump sum payment towards principal is a great way to lower the total cost of a loan. Not only does that pay down debt faster, but it also saves money on interest charges over time.