The Psychology Behind the Recovery

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Th e M Rep o RT | 49 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING the latest cFPB Beefs Up data tool The agency unveiled a more user-friendly hMDA data collection tool. t he Consumer Financial Protection Bureau (CFPB) unveiled a new tool aimed at making Home Mortgage Disclosure Act (HMDA) data more user-friendly. In a report released the same day, the CFPB said it collected HMDA data from 7,400 financial institutions in 2012 on 18.7 million loan applications. The tool is intended to improve residential lending information and provide a better understanding of a borrower's access to credit. The tool could potentially make it easier for consumer groups, watch- dog organizations, and mortgage regulators to identify potential cases of predatory lending. The data fields currently avail- able include loan amount, lender name, property type, and loca- tion. Additional fields include the applicant's race, ethnicity, sex, and loan purpose. New information is being considered for inclusion into the HMDA data. "Better public HMDA data would help us improve upon an important resource that already allows regulators, government agencies, housing groups, and consumer rights groups to study and monitor the single most important consumer financial product in the United States: the mortgage loan," said CFPB direc- tor Richard Cordray. New data fields under consid- eration include loan length, total points and fees, and teaser terms. The borrower's age and credit score would also be included, as well as information about home- equity lines of credit. The CFPB is also considering a requirement for lenders to explain reasons for a rejected application and whether the lender consid- ered the loan to be a Qualified Mortgage. The addition of the new information mostly includes data that lenders are already collecting for loan processing, underwriting, and pricing. Not all new information would be made publicly available, and the new reporting guidelines would largely be in line with current industry standards. "Approximately 70 percent of all loans eventually sold to the GSEs use the Uniform Loan Delivery Dataset of the Mortgage Industry Standards Maintenance Organization (MISMO) data standards for residential mort- gages," Cordray said. "Where possible, alignment of the HMDA data requirements to this open and free standard already being used by most lenders provides an opportunity to improve market efficiency, market understanding, and market oversight." The CFPB HMDA tool is available online. cFPB looks through cracked rearview mirror Agency still finding servicing issues form last year. t he Consumer Finan- cial Protection Bureau (CFPB) released a new report detailing a num- ber of shoddy servicing prac- tices that "continued to plague consumers throughout 2013." The CFPB's latest Supervisory Highlights report covers supervi- sion work completed between July and October 2013—after its servic- ing rules were first published but before they actually went into ef- fect. The bureau says it uncovered a number of "unfair and deceptive practices" in that time. "Problems in mortgage servic- ing have plagued consumers for years and helped contribute to the financial crisis," said CFPB di- rector Richard Cordray. "Taking action against mortgage servicing practices that harm consumers is a key priority for the CFPB. Especially under the detailed protections of our new rules, we expect services to clean up their act and provide responsible customer service." Among the findings, the CFPB says its examiners found two servicers that were requiring borrowers to waive existing claims in order to get a forbear- ance or a loan modification agreement. According to the agency, the examiners found the waiver clauses too broad and "unfair as they were done without regard to individual circumstances." Examiners also reportedly found two servicers engaging in unfair practices by failing to honor existing loan modifications after a servicing transfer. In addition, the bureau says its supervisory efforts revealed two cases of poor payment process- ing: one in which a servicer mis- represented payment plans in its marketing and another in which a servicer falsely told borrowers they would receive refunds from their escrow accounts. Finally, examiners also found several cases in which servicers provided incorrect information to consumer reporting agencies by mis- reporting short sales as foreclosures. In all problem cases, the CFPB says the companies were alerted to the agency's concerns, with investigations for potential en- forcement actions being launched when appropriate. In the July-October period last year, the bureau says non- public supervisory actions and self-reported violations resulted in $2.6 million in remediation to consumers.

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