CFPB Introduces New Forms for Integrated Disclosure Rule


CFPB Introduces New Forms for Integrated Disclosure Rule


Charged by the Dodd-Frank Wall Street Reform and Consumer Protection Act to integrate loan disclosures stemming from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA), the Consumer Financial Protection Bureau (CFPB) has created a united mortgage disclosure rule.

The new rule integrates four forms into two in order to create more streamlined and easier to understand mortgage disclosure paperwork.

The CFPB noted that consumers found the previous system confusing, with overlapping and inconsistent language. The government agency’s new rule and forms will attempt to clear up the confusion.

In a guide accompanying the new forms, the CFPB said, “The forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. The forms also provide more information to help consumers decide whether they can afford the loan and to facilitate comparison of the cost of different loan offers, including the cost of the loans over time.”

Two forms have been combined—the Good Faith Estimate (GFE) and the initial Truth-in-Lending Disclosure—to create a new form, the Loan Estimate. The Loan Estimate is designed to bring transparency to the lending process, providing key features, costs, and risks in an easier to understand format.

The Loan Estimate must be provided to consumers no later than the third business day after submitting a loan application.

Two other forms have been combined as well—The HUD-1 and the final Truth-in-Lending disclosure—to create another new form, the Closing Disclosure. The purpose of the newly created form is to help consumers understand all of the costs in the transaction.

The Closing Disclosure must be provided to consumers at least three business days before consummation of the loan.

The CFPB notes some caveats with the new rule: “The final rule applies to most closed-end consumer mortgages. It does not apply to home equity lines of credit (HELOCs), reverse mortgages, or mortgages secured by a mobile home or by a dwelling that is not attached to real property (i.e., land). The final rule also does not apply to loans made by persons who are not considered ‘creditors,’ because they make five or fewer mortgages in a year.”

The TILA-RESPA rule is effective August 1, 2015, after which the new forms will take effect.


Massachusetts Foreclosure Activity Decreases in February


Massachusetts Foreclosure Activity Decreases in February


A new report issued by the Warren Group found the number of foreclosure petitions dropped by 48.7 percent in Massachusetts for the month of February. The monthly drop represented 18 consecutive months that petitions have decreased on a year-over-year basis in the Bay State.

Petitions for foreclosure are the first step in the foreclosure process, with 439 petitions filed in the state over the month. The previous month, 364 petitions were filed, and 856 petitions were filed in February, 2013.

“The year-over year decline in foreclosure starts is due to a robust real estate market and improving economic conditions,” said Timothy M. Warren Jr., CEO of The Warren Group.

In spite of the decline in overall petitions, 280 foreclosure deeds were filed statewide, representing a 16.2 percent increase from 241 deeds recorded in February, 2013. In January, 2014, 280 foreclosure deeds were recorded.

Massachusetts is representative of a national trend of declining foreclosure activity.

“The increase most likely reflects homes which have been in the foreclosure process for quite some time and have now been completed,” Warren said.  “The number of foreclosure deeds peaked at 1,391 in March 2010. The last time foreclosure deeds exceeded 500 was in September 2012. Clearly, the worst of the foreclosure crisis is now behind us.”

Auction announcements in February also declined in February by 58 percent, according to the Warren Group. A total of 152 auction announcements were tracked in February, compared to the 365 recorded the previous year.

Fannie Mae Reports Decline in Business


Fannie Mae Reports Decline in Business

Fannie Mae reported further contraction in its book of business for February—the second this year and the third in as many months—as new business acquisitions dropped to a five-year low.

According to the enterprise’s monthly volume summary for February, business shrank at a compound annual rate of 1.4 percent, bringing the book’s total growth rate for the year to -2.4 percent.

As of the end of the month, the book’s total value was approximately $3.15 trillion.

The decline in business was accompanied by a slight dip in new acquisitions, which totaled $29.3 billion for the month. The last time new business acquisitions were that low was January 2009, when they totaled $28.8 billion.

Also down once again was the single-family serious delinquency rate, which ended the month at 2.27 percent—the lowest since November 2008. The multifamily delinquency rate, meanwhile, edged up 1 basis point to 0.11 percent.

Fannie completed 10,837 loan modifications in February, totaling 23,402 year-to-date.

Consumer Complaints to CFPB Nearly Double in 2013


Consumer Complaints to CFPB Nearly Double in 2013


Consumer complaints to the Consumer Financial Protection Bureau (CFPB) nearly doubled over the course of 2013, the agency revealed in an annual report.

According to CFPB’s figures, complaint volume last year totaled 163,700, an 80 percent increase from the 91,000 recorded complaints in 2012. Including this year, the bureau has received more than 310,000 complaints to date.

The leap in volume underscores the challenges that still remain despite the progress made by financial industries in the last few years.

“Consumer complaints have become central to the work of this agency. They enable us to listen to, and amplify, the concerns of any American who wants to be heard,” said CFPB Director Richard Cordray. “They are also our compass. They make a difference by informing our work and helping us identify and prioritize problems for potential action.”

Areas of dissatisfaction ranged from bank accounts to debt collection to all manner of loans—including mortgages, which represented the greatest share of complaint volume at 37 percent.

At 59 percent, the greatest share of mortgage-related issues came up when borrowers were unable to pay, “such as issues relating to loan modifications, collections, or foreclosures,” CFPB said in its report. At a distant second in volume was “making payments” (26 percent), followed by complaints about applying for a loan (8 percent).

“For consumers applying for a mortgage loan, consumers raise issues related to interest rate-lock agreements, such as lenders refusing to honor rate-locks, or assessing penalties when the loan does not close,” the agency explained.

Upon receiving a complaint, CFPB expects companies to respond within 15 days and to provide a description of the steps taken or planned. According to the bureau, companies have responded to more than 93 percent of complaints sent to them, and consumers have disputed 21 percent of those responses.

About 7 percent of complaints end up with some form of monetary relief, according to CFPB, with the median amount coming to $460 for mortgage-related complaints.

Home Prices Post Gains in February

Home Prices Post Gains in February



CoreLogic released its Home Price Index (HPI) for February, which found that home prices increased by 12.2 percent from the previous year. The CoreLogic figure includes home prices of distressed sales, and represents 24 months of consecutive year-over-year increases in home prices nationally.

Home prices month-over-month also increased, posting a .8 percent gain compared to January, 2014. The monthly figure includes distressed sales.

14 states showed double-digit year-over-year growth in February. Colorado, Nebraska, North Dakota, Texas, and the District of Columbia all reached new home price highs, with 22 states at or within 10 percent of their price peaks.

“As the spring home-buying season kicks off, house price appreciation continues to be strong,” said Dr. Mark Fleming, chief economist for CoreLogic. “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”

Without distressed sales, which consist of REO properties and short sales, the HPI revealed slightly lower gains.

Home prices excluding distressed sales increased 10.7 percent in February from the previous year, and .9 percent from the previous month. All 50 states and the District of Columbia showed year-over-year appreciation when excluding distressed sales, according to CoreLogic.

“February marks two straight years of year-over-year gains in national prices across the United States,” said Anand Nallathambi, president and CEO of CoreLogic. “The consistent upward movement in home prices should ultimately prove to be an important stimulant for higher levels of sustained market activity and growth in the housing economy.”

CoreLogic also announced a new forecast feature to its report, offering projections for upcoming months. The company projected prices to increase .5 percent in March.

Additionally, the home prices with distressed sales are estimated to increase 10.5 percent year-over-year from March, 2013 to March, 2014.

CoreLogic projects home prices excluding distressed sales will increase 9.3 percent in March year-over-year, and .4 percent month-over-month.

Including distressed sales, the five states with the highest home price appreciation were California (+19.8 percent), Nevada (+18.5 percent), Georgia (+14.2 percent), Oregon (+13.8 percent) and Michigan (+13.5 percent).

Excluding distressed sales, the five states with the highest home price appreciation were California (+15.9 percent), Nevada (+14.6 percent), Florida (+13.1 percent), Washington (+11.5 percent) and Hawaii (+11.5 percent).