Top Story Lending Related

The Federal Deposit Insurance Corporation has released a list of orders of administrative enforcement actions taken against banks and individuals in April, 2016. The 44 orders listed included one cease and desist order; three consent orders; 15 removal and prohibition orders; seven Section 19 orders; seven civil money penalties; one amended order to pay; eight terminations of consent orders and cease and desist orders; and two notices. A Minnesota bank was ordered to pay $2,000 for violations of the Flood Disaster Protection Act. CMPs were levied against five individuals in amounts ranging from $25,000 to $90,000 for unspecified infractions. Each of the five was also issued a removal and prohibition order.

The Federal Housing Finance Agency (FHFA) indices indicate that nationally, interest rates on conventional purchase-money mortgages were nearly flat from March to April, 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 3.75 percent for loans closed in late April, up 2 basis points. The average interest rate on all mortgage loans was 3.75 percent, down 1 basis point. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 3.94 percent, down 1 basis point. The effective interest rate on all mortgage loans was 3.89 percent in April, up 1 basis point. 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 $322,400 in April, down $2,600.

The NCUA has issued a reminder to credit unions (CUs) that a new registration system is now required for grant applicants, and low-income credit unions seeking Community Development Revolving Loan Fund assistance grants should give themselves adequate time to file. Instructions for creating an account and registering are available on the “Help Documents” section of the Office of Small Credit Union Initiatives’ Grants and Loans information page. The application deadline is June 30.

The Consumer Financial Protection Bureau has announced the filing of an administration consent order against a former Wells Fargo employee for an illegal mortgage fee-shifting scheme. The CFPB found that David Eghbali referred a substantial number of loan closings to a single escrow company, which shifted its fees from some customers to others at Eghbali’s request. Eghbali could then manipulate loan costs and ultimately increase the number of loans he closed, increasing his commissions. The consent order requires Eghbali to pay an $85,000 civil money penalty and bans him from working in the mortgage industry for one year.

The Federal Emergency Management Agency of the Department of Homeland Security has published [81 FR 33598] in today's Federal Register a final rule that identifies communities that are scheduled for suspension from the National Flood Insurance Program on June 16, 2016, for failing to comply with the floodplain management requirements of the program. Affected communities are located in:

• Louisiana -- Grant Parish
• New Jersey -- Cumberland and Salem counties
• New York -- Delaware County
• Pennsylvania -- Clinton County
• Washington -- Yakima County
• Wisconsin -- Dane and Green counties

A Save the Date has been posted on the Bureau Blog for a meeting of the CFPB’s Consumer Advisory Board in Little Rock, Arkansas, on June 9 from 10 a.m. to 4:30 p.m. CDT. The meeting will discuss an auto lending education initiative, trends and themes, and payday lending.

The Federal Trade Commission and the State of Florida have announced actions taken against two operations charged with running phony student loan debt relief schemes, and defendants in a similar FTC action brought earlier this year have agreed to a ban on participating in any debt relief business, as part of a consumer protection crackdown to combat such frauds.

In the first case, the operators of Consumer Assistance Project lured borrowers with promises such as “GET RID OF YOUR DEBT TODAY!” and charge illegal up-front fees for their purported services, typically $250, plus monthly fees of up to $303 for as long as 36 months. In the second case. an operation called Student Aid Center Inc. enticed people with promises such as “Get Your Student Loans Forgiven Now!” and “$17,500 in Up Front Forgiveness."

The operators of another student debt relief scheme have agreed to a settlement with the FTC that will permanently ban them from the debt relief business. The FTC alleged that Tobias West and his wife, Komal West, the owners of Good EBusiness, Select Student Loan Help LLC, and Select Document Preparation Inc., charged consumers up-front fees of $500 to $800 based on phony claims that they could renegotiate, settle, or alter payment terms on student loan debt. In addition, the FTC charged that two of the defendants deceptively marketed home loan and student modification services under the name “AAP Firm,” and illegally charged advance fees ranging from $1,000 to $5,000.

The Federal Reserve Board has released its Report on the Economic Well-being of U.S. Households. The report is based on the Board's annual survey of household economics and decision making. Aggregate-level results show several signs of improvement. Sixty-nine percent of respondents said they are either "living comfortably" or "doing okay," up 4 percentage points from 2014 and up 6 percentage points from 2013. Seventy-seven percent of non-retired adults without a disability are confident that they have the skills necessary to get the kind of job that they want now—an increase of 10 percentage points from the 2013 survey results. A video summary of the report was also released.

The Federal Housing Finance Agency (FHFA) has released its House Price Index (HPI) for the first quarter 2016. U.S. house prices rose 1.3 percent, the nineteenth consecutive quarterly price increase in the purchase-only, seasonally adjusted index. House prices rose 5.7 percent from the first quarter of 2015 to the first quarter of 2016. This is the fourth consecutive year in which prices grew more than 5 percent. FHFA's seasonally adjusted monthly index for March was up 0.7 percent from February. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The OCC has announced it has terminated a mortgage servicing-related order against Wells Fargo Bank, N.A. (Wells Fargo), and assessed a $70 million civil money penalty (CMP) against the bank for previous violations of the order. The OCC terminated the consent order against Wells Fargo after determining that the institution now complies with the order. The OCC originally issued related orders in April 2011 and amended the orders in February 2013 and June 2015. The termination of the orders ends business restrictions affecting the bank that the OCC mandated in June 2015. See Wells Fargo Bank pays $70M in servicing-related CMP for additional information.