Top Story Lending Related

The Consumer Financial Protection Bureau has posted updates to three of its Small Entity Compliance Guides and three charts for implementation of Dodd-Frank Act Title XIV mortgage lending rules, to reflect the Bureau's recent amendments to expand eligibility for the special provisions allowing certain small creditors to issue balloon-payment qualified mortgages and balloon-payment high cost mortgages, and exempting them from the escrow requirement for higher-priced mortgage loans. The updates, all of which can be found on the Bureau's Title XIV Implementation Page, include:

• Compliance Guide for ATR/QM
• Compliance Guide for HOEPA
• Compliance Guide for the HPML Escrow Rule
• Transaction Coverage and Exemption Chart
• Small Creditor QM Flowchart
• ATR/QM Comparison Chart

The OCC has released its Mortgage Metrics Report for the Fourth Quarter of 2015. The report indicates 94.1 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 93.9 percent a quarter earlier. The report also showed that foreclosure activity has declined steadily since the end of 2013, decreasing 15.9 percent from the end of 2014. Reporting servicers initiated 63,387 new foreclosures during the fourth quarter of 2015, compared with 75,395 a year earlier. The mortgages included in the report comprise 41 percent of all residential mortgages outstanding in the United States or approximately 21.5 million loans totaling $3.7 trillion in principal balances.

Two workshops for directors of national community banks and federal savings associations supervised by the OCC will be held in Springfield, Illinois, on May 3-4. The Risk Governance workshop on May 3 combines lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC's approach to risk-based supervision and major risks in the financial industry. The Compliance Risk workshop on May 4 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID.

A complaint filed by the Federal Trade Commission and the Illinois Attorney General has resulted in a federal court issuing a temporary restraining order (TRO) halting a Chicago-area operation that allegedly threatened and intimidated consumers to collect phantom payday loan “debts” they did not owe, or did not owe to the defendants. The defendants also allegedly illegally provided portfolios of fake debt to other debt collectors. This is the Commission's first case alleging that practice. The case against six companies and three individuals who used names such as Stark Law, Stark Recovery, and Capital Harris Miller & Associates is part of Operation Collection Protection, an ongoing federal-state-local crackdown on collectors that use deceptive and abusive collection practices.

The CFPB has acted to halt a student loan debt relief scam that illegally tricked borrowers into paying fees for federal loan benefits and misrepresented to consumers that it was affiliated with the Department of Education. The CFPB has ordered the student debt relief company, Student Aid Institute, Inc., and its chief executive officer, Steven Lamont, to pay a penalty, halt debt relief services, and stop charging affected customers. The CFPB also permanently barred the company and Lamont from the debt relief industry.

The Bureau has announced the release of its March consumer complaint snapshot, which focuses on complaints related to debt collection. The report shows that the most common debt collection complaint involves attempts to collect on a debt the consumer reported was not owed. This month’s snapshot also highlights trends seen in complaints from consumers in Florida. The Bureau’s fifth annual Fair Debt Collection Practices Act (FDCPA) report was also posted.

The CFPB has posted on its Blog the third article in its series on consumer choices in buying a first home.

The Federal Housing Finance Agency (FHFA) has released its February 2016 Index, which indicates that nationally, interest rates on conventional purchase-money mortgages decreased from January to February, 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 3.88 percent for loans closed in late February, down 10 basis points. The average interest rate on all mortgage loans was 3.89 percent, down 8 basis points. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.11 percent, down 12 basis points. The effective interest rate on all mortgage loans was 4.03 percent in February, down 7 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 $316,700 in February, up $6,300.

The Federal Emergency Management Agency has published a final rule in this morning's Federal Register identifying communities in Colorado, Virginia and Wisconsin where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on May 16, 2016, for noncompliance with the floodplain management requirements of the program.

Update: FEMA published a correction to this Final Rule on April 25, 2016, at 81 FR 24036

In a speech at the Economic Club of New York, Federal Reserve Board Chair Yellen discussed the activities of the Board relative to the goals of maximum employment and price stability. Dr. Yellen explained why the Federal Open Market Committee (FOMC) anticipates that only gradual increases in the federal funds rate are likely to be warranted in coming years, emphasizing that this guidance should be understood as a forecast for the trajectory of policy rates that the Committee anticipates will prove to be appropriate to achieve its objectives, conditional on the outlook for real economic activity and inflation. She noted the FOMC decided to leave the stance of policy unchanged in both January and March, while emphasizing its commitment to adjust monetary policy as needed to achieve employment and inflation objectives. Yellen reviewed recent developments, the baseline outlook, risks to the outlook for real economic activity and inflation, and monetary policy implications. She concluded, "I continue to strongly believe that monetary policy is most effective when the FOMC is forthcoming in addressing economic and financial developments such as those I have discussed in these remarks, and when we speak clearly about how such developments may affect the outlook and the expected path of policy."