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12/22/2020

Small-creditor asset threshold for escrow exemption adjusted

The CFPB has published in today's Federal Register a final rule making an inflation adjustment to the asset-size threshold for certain creditors to qualify for an exemption from the requirement to establish an escrow account for a higher-priced mortgage loan under section 1026.35 of Regulation Z. The threshold is adjusted, effective January 1, 2021, to $2.230 billion from $2.202 billion. Therefore, creditors with assets of less than $2.230 billion (including assets of certain affiliates) as of December 31, 2020, will be exempt, if other requirements of section 1026.35(b)(2)(iii) of Regulation Z are also met, from establishing escrow accounts for higher-priced mortgage loans in 2021. The change is effective January 1, 2021.

The BankersOnline Regulations page for Regulation Z § 1026.35 and its Official Interpretations has been updated, noting and correcting an error in the published rule.

12/22/2020

HMDA asset-size exemption threshold adjustment

The CFPB has published in the December 22, 2020, Federal Register a final rule adjusting the Regulation C (HMDA) asset-size exemption threshold for banks, savings associations, and credit unions for inflation. For calendar year 2021, that threshold is increased from $47 million to $48 million. Therefore, banks, savings associations, and credit unions with assets of $48 million or less as of December 31, 2020, will be exempt from collecting HMDA data in 2021.

The BankersOnline Regulations pages for Regulation C have been updated.

12/21/2020

Bureau issues second piece of FDCPA final rule

On Friday, the CFPB announced a final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers. The rule requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency (CRA). The rule prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt.

The rule will become effective on November 30, 2021, with the rule reissuing Regulation F published on November 30, 2020.

12/21/2020

Mortgage servicer settles with CFPB

The Bureau has issued a consent order against Seterus, Inc. (Seterus) and Kyanite Services, Inc. (Kyanite), as Seterus’s successor in interest, based on the Bureau’s finding that Seterus violated the Consumer Financial Protection Act of 2010 (CFPA) and Regulation X. The Bureau found that Seterus’s actions resulted in delaying or depriving some borrowers of a reasonable opportunity to get their loss mitigation applications completed and evaluated and in some borrowers' failing to timely receive protections against prohibited foreclosure activities to which they were legally entitled.

The order requires Kyanite to pay $4,932,525 in total redress to approximately 11,866 of the consumers to whom Seterus sent a defective acknowledgment notice. The order also imposes a $500,000 civil money penalty and includes injunctive relief that would apply in the event Kyanite engages in mortgage servicing. At its height, Seterus, a former mortgage servicer based in North Carolina, serviced approximately 500,000 residential mortgage loans. Seterus is no longer operating. On February 28, 2019, after the relevant period covered by the Bureau’s investigation, Seterus was sold and its entire mortgage servicing portfolio was transferred to Nationstar Mortgage LLC, doing business as Mr. Cooper (with which the Bureau reached a separate settlement earlier this month.

12/18/2020

NCUA Board approves rules and proposals

The National Credit Union Administration Board held the first of two consecutive open meetings in December. At the meeting, the Board approved these five items:

  • A final rule on subordinated debt.
  • A temporary final rule that extends regulatory relief measures in response to COVID-19.
  • A proposed rule that permits federal credit unions to purchase mortgage-servicing rights from other federal credit unions under certain conditions;
  • A proposed rule revising the definition of a service facility for multiple common bond federal credit unions; and
  • A proposed rule on overdraft policy

12/18/2020

OCC November enforcement actions

The OCC has released a list of enforcement actions taken in November, which included:

12/18/2020

Fed and FDIC adjust CRA thresholds

The Federal Reserve Board and FDIC have jointly announced the annual adjustment to the asset-size thresholds used to define small bank and intermediate small bank under their Community Reinvestment Act (CRA) regulations. Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification. Those meeting the small and intermediate small institution asset-size thresholds are not subject to the reporting requirements applicable to large banks unless they choose to be evaluated as a large institution. The definitions of small and intermediate small institutions for CRA examinations will change on January 1, 2021, as follows:

  • "Small bank" means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion.
  • "Intermediate small bank" means a small institution with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years.

12/18/2020

FHFA foreclosure prevention and refi report

The Federal Housing Finance Agency has released its third quarter 2020 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 539,451 foreclosure prevention actions in the third quarter of 2020, bringing to 5.2 million the number of troubled homeowners who have been helped during conservatorships; 4.5 million of those actions have helped troubled homeowners stay in their homes.

Forbearance: newly initiated forbearance dropped significantly to 231 thousand in the third quarter from 1.5 million in the second quarter of 2020. The total number of loans in forbearance plans at the end of the quarter was 1 million, representing approximately 3.66 percent of the total loans serviced and 79 percent of total delinquent loans. A majority of the forbearance actions occurred as a result of the Enterprises' response to COVID-19 impacts.

Mortgage Performance: The 60+ days delinquency rate decreased from 4.08 percent at the end of the second quarter to 3.58 percent at the end of the third quarter. Overall, delinquency rates remained much higher than pre-coronavirus rates due to the forbearance programs being offered to borrowers affected by the pandemic.

  • The Enterprises' serious (90 days or more) delinquency rate jumped to 3.14 percent at the end of the third quarter. This compared with 10.76 percent for Federal Housing Administration (FHA) loans, 5.77 percent for Veterans Affairs (VA) loans, and 5.16 percent for all loans (industry average).

Foreclosure starts decreased 10 percent from 7,551 in the second quarter to 6,809 in the third quarter of 2020.

Refinances increased to 1.8 million in the third quarter, from 1.5 in the first quarter of 2020.

REO inventory decreased 25 percent in the third quarter.

12/18/2020

FHFA proposes Enterprise Liquidity Requirements

The Federal Housing Finance Agency (FHFA) has announced a proposed rule regarding liquidity requirements for Fannie Mae and Freddie Mac (the Enterprises). The proposal builds on existing FHFA guidance and the experience gained from managing the Enterprises' liquidity positions in conservatorship.

Among other things, the proposal seeks to implement minimum Enterprise liquidity and funding requirements, daily management reporting of the Enterprises' liquidity positions, monthly public disclosure reporting requirements, and other liquidity-related requirements. It includes four liquidity requirements designed to ensure that the Enterprises are a source of strength for the mortgage market during downturns in the economy, and to incentivize the Enterprises to issue an appropriate and stable mix of debt over the long term. To protect taxpayers and support the mortgage market, the proposed rule takes into account the Enterprises' lack of access to the Federal Reserve Bank discount window, unique structure, and public charter. Currently, the Enterprises would meet or exceed all requirements of the proposed rule.

Comments on the proposal will be accepted for 60 days following publication in the Federal Register

12/17/2020

CFPB: Avoiding reverse-mortgage scams

The CFPB has posted a Bureau Blog article, "Avoid reverse mortgage scams," explaining reverse mortgage shopping scams and how to avoid them. As a result of the economic uncertainty caused by the COVID-19 pandemic, scammers may be targeting older homeowners through reverse mortgage schemes. The article describes several such schemes, and offers tips on how to avoid them.

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