Mar. 29, 2013: FTC & CFPB complaint sites; sales of servicing continue; 184 loans return; moron humor on this Good Friday
Rob Chrisman


Want to see how many complaints your competitor is receiving? The CFPB is here for you! Actually, the complaint site is meant to help consumers. Proponents call it wonderful; critics say it is just another step toward Big Brother running society. Regardless of your take, here is how to find the list of consumer complaints against financial institutions handling credit cards, mortgages, bank deposit products and services, and student loans: For example, Bank of America, which handles customer service on about 15% of U.S. home loans, has accounted for 30% of the mortgage complaints logged by the Consumer Financial Protection Bureau.


While we’re complaining, the Federal Trade Commission recently released their 2012 complaints report ( The Consumer Sentinel Network Data Book cites over 2 million official instances of consumer complaints. Last year saw an increase of 10% over the FTC’s 2011 report, with instances of identity theft (18% of the total), debt collection (10% of the total), and banks and lenders (6% of the total) topping the list. While the report relies heavily on unsubstantiated reports by consumers, it is extremely important to lenders on every level to be aware of the implications of such formal complaints. The report is a reminder that originators should have in place procedures and practices in dealing with consumer ire, as the CFPB’s examination procedures instruct examiners to assess the quality of a company’s system for handling consumer complaints.


Yes, the cost of compliance has increased – just ask the owner of any lender, and especially ask those who have merged with banks or other lenders because of it. Despite the objections of the ABA and the CBA, the CFPB’s request to collect compliance costs data was approved by OMB.  It is a noble goal, as the costs of compliance are indeed passed on to borrowers either in the form of fees or in the form of lenders exiting the business due to overhead. (Most believe we can expect more of that this year.) As a quick aside, many industry watchers, however, are disappointed the CFPB seems not to have focused on the costs associated with the compliance steps recommended in its new guidance on auto dealer participation. Why not? I don’t know – ask your local CFPB staff. In the auto industry, compliance overhead will result in increased costs for both indirect auto finance companies and auto dealers that will inevitably be passed along to consumers, just as it is in residential lending. In its announcement, the CFPB said that it hopes “to become better and smarter regulators” through its cost research. Critics say it is another way of intruding on their business, and recommend it pays attention to the ABA’s and CBA’s comments and takes steps to ensure that the data it collects captures all costs and other impacts of its regulations and accurately reflects industry experience.


Question: In 1987, this person won $45,303 on the TV game show Jeopardy, which they used to pay law school debt, to pay taxes and to buy a used car.

Answer: Who is CFPBs Appointed Director Richard Cordray.

After being appointed by President Obama in 2011, Cordray is serving through this year under a temporary presidential appointment, and the Senate Banking Committee had a hearing on Cordray’s nomination to be CFPB Director. Last week, a Senate committee approved the nomination of Richard Cordray, 12-0, to head the federal Consumer Financial Protection Bureau. Now the full Senate, including its “obstructionist” GOP minority, needs to confirm Mr. Cordray for the permanent post. It seems that no one disputes that the former Ohio attorney general is well qualified, and Republicans concede he has been fair and effective in his role. The battle is over the bureau itself. Republicans think its powers are too sweeping. They don't want it to be an independent agency. Basically, they dislike its scope of activities which can, in theory, involve any transaction with a consumer. And which ones don’t?


Last week the commentary discussed loan servicing, the sales of it continue. Aggregators, and sellers, know that servicing can either be purchased in a bulk sale (like a $500 million chunk) or on a “flow” basis. Either way, the lender “selling flow” is doing so for a variety of reasons, such as a non-depository mortgage bank needing the cash to fund operations in other areas, a regional bank concerned about Basel III implications, or a mortgage banker believing that by splitting off the servicing from the underlying asset it can obtain a better total price in the marketplace. As an example of the latest offering that crossed my e-mail, Phoenix Capital is acting as a broker to “$40-60 million/month Fannie Mae and $30-45 million/month Ginnie Mae flow servicing…Seller is a robust mortgage banker with a demonstrably strong history interested in entering into a forward commitment to sell and transfer all of their production on a monthly basis.” The Fannie production is “99% fixed and 1% ARM, weighted average FICO of 759, weighted average LTV of 77%, average balance of  $175-180k, mostly Ohio, Michigan, and Missouri, 89% owner occupied, 76% SFH, 61% refi.


As an interesting comparison, the expected Ginnie production has different characteristics, as an LO could tell you. The Ginnie production is “62% FHA & 38% VA (with the VA production expected to decline), weighted average FICO of 709, weighted average LTV of 94%, average balance of $145-155, mostly Ohio, North Carolina, and Pennsylvania, 83% SFH and 54% purchase.” (By the way, if this interests you as a buyer, contact Steve Fleming with Phoenix at


I have recently been asked about “184 loans.” To be honest, I had to look them up ( but a couple days ago President Obama signed into a law a measure to continue funding the government through September 30, 2013. This budget compromise includes more than $12 million for HUD’s Section 184 home loan program. HUD has resumed accepting new loan applications under the Section 184 Program and will begin issuing loan approvals no later than April 15, 2013. 


On to some recent investor updates – as always it is best to read the actual bulletin for full details.


Mortgage Capital Management has announced the addition of the new Rate Protection Plan and Pooling Parameters software to its Risk Management System.  The Rate Protection Plan helps users identify longer-term rate locks with the intent of protecting borrowers who are buying homes under construction from future market pricing, while Pooling Parameters aids in creating optimal spec pools that meet the pool characteristics required by investors.  To find out more about the new features, go to


Kinecta has expanded its mortgage insurance guidelines to allow credit scores as low as 680 for loans with LTVs above 95%, reduced from the previous minimum of 720.


Effective for registrations dated April 1st and after, M&T Bank will be updating its project review submission process.  Co-op reviews will require the new questionnaire and new warranties, for which Type I is the only type available for co-ops outside New York as well as the only type under which cash-out refinances are eligible.  HARP and Streamline changes require the new questionnaire and new warranties (HARP Same Servicer, HARP Different Servicer, or FHA Streamline).


Webinars on Fannie’s Quality Assurance System (QAS) will be held on April 10th, April 24th, May 6th, May 20th, and June 5th for those wanting to learn more about how Fannie tracks loans that have been status for quality assurance underwriting review.  See for registration details.


As part of the Know Your Options Customer CARE initiative, Fannie is offering servicers free sessions on loss mitigation on April 18th and April 22nd. The training is aimed at those who work in servicing, collections, and default prevention and aligns with the Single Point of Contact standards as outlined by the Office of the Comptroller of the Currency and the CFPB and the FHFA’s Servicing Alignment Initiative.  For registration, go to  New loss mitigation job aids are available on the Fannie site as well; see for details.


Yes, the bond markets are closed today, and they closed early yesterday. LOs out there can think about that if they’re locking a loan today. Perhaps of anticipation of today’s locks, for those companies offering them, mortgage bankers crammed a lot of selling into a short span yesterday. Most of the selling was in 30-yr 3% securities which encompass the bulk of production but also are securities most use for hedging and are the most liquid. But in spite of the selling, rates barely budged and finished close to unchanged from Wednesday’s closing levels.


Apparently those releasing economic news didn’t receive the memo saying the markets are closed. So today we’ll have the release of Personal Income (Feb) which is expected at +0.8 percent from -3.6 percent in January, and Personal Consumption/Spending. At 9:55AM is final March Consumer Sentiment, predicted higher to 72.5 from the mid-month read of 71.8. And there are those who wonder if Good Friday is considered a federal holiday under Reg Z.  While the markets are closed, it is a normal Friday for lending purposes and you should count it as a normal rescission day.



Top 8 Morons of the year


AT&T fired President John Walter after nine months, saying he lacked intellectual leadership. He received a $26 million severance package. Perhaps it's not Walter who's lacking intelligence?


Police in Oakland, CA spent two hours attempting to subdue a gunman who had barricaded himself inside his home. After firing ten tear gas canisters, officers discovered that the man was standing beside them in the police line, shouting, “Please come out and give yourself up.”


An Illinois man, pretending to have a gun, kidnapped a motorist and forced him to drive to two different automated teller machines, wherein the kidnapper proceeded to withdraw money from his own bank accounts.


A man walked into a Topeka, Kansas Kwik Stop and asked for all the money in the cash drawer. Apparently, the take was too small, so he tied up the store clerk and worked the counter himself for three hours until police showed up and grabbed him. 


Police in Los Angeles had good luck with a robbery suspect who just couldn't control himself during a lineup. When detectives asked each man in the lineup to repeat the words, “Give me all your money or I'll shoot,” the man shouted, “That's not what I said!”


A man spoke frantically into the phone: “My wife is pregnant and her contractions are only two minutes apart!” “Is this her first child?” the doctor asked. “No!” the man shouted, “This is her husband!”


In Modesto, CA, Steven Richard King was arrested for trying to hold up a Bank of America branch without a weapon. King used a thumb and a finger to simulate a gun. Unfortunately, he failed to keep his hand in his pocket.


Last summer, down on Lake Isabella, located in the high desert, an hour east of Bakersfield, CA, some folks, new to boating, were having a problem. No matter how hard they tried, they couldn't get their brand new 22 foot boat going. It was very sluggish in almost every maneuver, no matter how much power they applied. After about an hour of trying to make it go, they putted into a nearby marina, thinking someone there may be able to tell them what was wrong. A thorough topside check revealed everything in perfect working condition: the engine ran fine, the out-drive went up and down, and the propeller was the correct size and pitch. One of the marina guys jumped in the water to check underneath. Under the boat, still strapped securely in place, was the trailer!



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