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Top Story Lending Related

06/23/2021

Housing insecurity risks slightly improved

The CFPB reports that as of June 2021, 600,000 fewer consumers were in mortgage forbearance than in January 2021. Forbearance rates noticeably dropped in April when many borrowers exited forbearance after reaching 12-months. A payment deferral, or partial claim, was the most common repayment option.

Additionally, foreclosure rates remain at historic lows, as of Q1 2021, 0.54 percent of mortgages were in foreclosure. However, the number of seriously delinquent mortgage borrowers remains nearly three times higher than before the pandemic, with 1.9 million mortgage borrowers more than three months behind on mortgage payments or in active foreclosure. More than one in 10 borrowers with an FHA loan remain seriously delinquent on their mortgage, a rate higher than the peak during the Great Recession.

06/23/2021

1st Quarter 2021 Foreclosure Prevention and Refinance Report

The FHFA yesterday released its first quarter 2021 Foreclosure Prevention and Refinance Report, which shows that Fannie Mae and Freddie Mac completed 224,646 foreclosure prevention actions in the first quarter of 2021, bringing the total number of homeowners who have been helped during conservatorships to 5.8 million.

The report also shows that 38 percent of loan modifications completed in the first quarter reduced borrowers' monthly payments by more than 20 percent. The number of refinances increased from 2.013 million in the fourth quarter to 2.016 million in the first quarter. The Enterprises' serious delinquency rate dropped from 2.78 percent to 2.48 percent at the end of the quarter. This compares with 11 percent for Federal Housing Administration (FHA) loans, 5.59 percent for Veterans Affairs (VA) loans and 4.7 percent for all loans (industry average).

06/23/2021

NCUA Board meeting notice and agenda

The National Credit Union Administration has published a Notice in this morning's Federal Register of a 10:00 a.m. EDT open (internet streaming only) Board meeting tomorrow, June 24, 2021. Matters to be considered include:

  • Federal credit union loan interest rate ceiling
  • Final Rule, Part 702, Current Expected Credit Loss Methodology
  • Final Rule, Part 741, Appendix B, Capitalization of Interest

06/21/2021

FHA updates student loan payment calculations

The FHA on Friday announced updates to its student loan monthly payment calculations to take steps to remove barriers and provide more access to affordable single family FHA-insured mortgage financing for creditworthy individuals with student loan debt, which has a disproportionate impact on people of color. The updated policy more closely aligns FHA student loan debt calculation policies with other housing agencies, helping to streamline and simplify originations for borrowers with student loan debt obligations.

The policy updates published on Thursday evening for FHA Single Family Title II forward mortgages remove the current requirement that lenders calculate a borrower’s student loan monthly payment of one percent of the outstanding student loan balance for student loans that are not fully amortizing or are not in repayment. The new policy bases the monthly payment on the actual student loan payment, which is often lower, and helps home buyers who, with student debt, meet minimum eligibility requirements for an FHA-insured mortgage.

06/21/2021

CFPB statement on Juneteenth holiday and mortgage closings

On Friday, CFPB Acting Director Dave Uejio issued the following statement:

“President Biden’s signing of the Juneteenth National Independence Day Act into law yesterday afternoon is a cause for celebration. Juneteenth is a moment for us to commemorate the emancipation of those enslaved. I am proud that we as a country are taking concrete steps to recognize and heal from the legacy of slavery, even as I recognize that there is much more work to do.

“The CFPB, along with the other Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) regulators, is aware of concerns regarding implementation of the new Juneteenth Federal holiday, particularly as it relates to mortgage lender compliance with the Truth in Lending Act and TILA-RESPA Integrated Disclosure (TRID) timing requirements. The CFPB recognizes that some lenders did not have sufficient time after the Federal holiday declaration to consider whether and how to adjust closing timelines. The CFPB understands that some lenders may delay closings to accommodate the reissuance of disclosures adjusted for the new Federal holiday. The CFPB notes that the TILA and TRID requirements generally protect creditors from liability for bona fide errors and permit redisclosure after closing to correct errors. Any guidance ultimately issued by the CFPB would take into account the limited implementation period before the holiday and would be issued after consultation with the other FIRREA regulators and the Conference of State Bank Supervisors (CSBS) to ensure consistency of interpretation for all regulated entities.”

06/18/2021

2020 mortgage lending data available

The FFIEC has announced the availability of data on 2020 mortgage lending transactions at 4,475 U.S. financial institutions reported under the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies. The FFIEC released yesterday several data products to serve a variety of data users —

06/18/2021

OCC releases enforcement actions

The OCC has released a list of recent enforcement actions taken against OCC-supervised financial institutions and individuals now or formerly affiliated with such institutions.

  • The former president of a Naples, Texas, bank was issued, with his consent, an order prohibiting him from participating in the banking industry, and directing that he pay a civil money penalty of $18,000.
  • Removal and prohibition orders were issued to:
    • A former vice president of information technology of Bradford National Bank of Greenville, Greenville, Illinois, for misappropriating $70,658 of customer funds and making false entries in the bank's books to conceal those misappropriations.
    • A former operations manager of Bank of America, Charlotte, North Carolina, for using his position to make unauthorized purchases of over $420,000 and selling the purchased items, retaining the proceeds for his personal benefit.
    • A former teller of JPMorgan Chase Bank, N.A., Columbus, Ohio, for misappropriating $6,000 in cash from her cash drawer and force-balancing the drawer to conceal her actions, depositing some of the funds in her personal account.
  • A Notice of charges for prohibition was filed in the matter of a former customer service specialist of JPMorgan Chase Bank, N.A., in which the individual is charged with alleged involvement in a scheme to order and sell goods using stolen debit and credit card information.

06/18/2021

Juneteenth National Independence Day

President Biden yesterday signed the Juneteenth National Independence Day Act commemorating Juneteenth (June 19) as a federal holiday. As June 19 falls on a Saturday this year, federal employees will observe this holiday today, June 18, 2021. Financial markets and Federal Reserve Financial Services will operate normally. FDIC, OCC and the Federal Reserve Board (Washington) offices will be closed today.

According to the FDIC, when determining their operating status today (June 18), FDIC-supervised institutions should comply with applicable requirements of their state chartering authority and consider the impact on customers.

IMPORTANT COMPLIANCE NOTE: The Juneteenth holiday was immediately added to those holidays listed in 5 U.S.C. § 6103(a) as a fixed-date holiday (like July 4, December 25, and others). Accordingly, tomorrow, June 19, 2021, is a federal public holiday listed in the "specific" definition of "business day" in Regulation Z that factors into compliance with the rescission period for certain mortgage loans and private education loans, as well as the timing of delivery of certain disclosures. This can affect loans currently scheduled for closing under the TRID rules, and will affect the count of days in the rescission period for loans closed today, if they are subject to the right of rescission under §§ 1026.15, 1026.23, or 1026.46. Whether it will affect the rescission period for loans closed earlier this week (before the signing of the law) is uncertain. Please note that this should not be considered a legal opinion.

06/17/2021

Bureau resumes examining for MLA compliance

An Interpretive Rule has been issued by the CFPB explaining the basis for its authority to examine supervised financial institutions for risks to active duty servicemembers and their dependents (i.e. military borrowers) from conduct that violates the Military Lending Act (MLA).

In 2018, the CFPB’s leadership discontinued MLA-related examination activities, based on its stated belief that Congress did not specifically confer examination authority on the CFPB with respect to the MLA. The current CFPB leadership does not find those prior beliefs persuasive and the CFPB will now resume MLA-related examination activities.

  • Press release
  • PUBLICATION AND EFFECTIVE DATE UPDATE: The interpretive rule was published at 86 FR 32723 on 6/23/2021, and was effective on publication.

06/17/2021

Credit account delinquencies still low

The CFPB has posted the first in a series of blog articles documenting trends in consumer credit outcomes during the COVID-19 pandemic for auto loans, student loans, mortgages and credit cards.

New delinquencies remain low and have not returned to 2019 Levels. After June 2020, new delinquencies for auto loan and credit card accounts began to rise gradually, although by December 2020, the share of open accounts transitioning into delinquency was lower or approximately the same as it had been prior to the pandemic.

New delinquencies for student loans also ticked up slightly since the summer of 2020, although the rate of delinquencies for these loans is still quite low, since a large share of student loans continue to be subject to automatic payment suspension under the CARES Act and administrative action by the Department of Education. Indeed, for student loans that do not appear to be receiving payment assistance, new delinquencies began rising in April of 2020.

New delinquencies on mortgages remained low from July 2020 through April 2021, likely reflecting the forbearances available under the CARES Act, which have since been extended through September 30, 2021.

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