TheMReport — News and strategies for the evolving mortgage marketplace.
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12 | TH E M R EP O RT MONTH IN REVIEW Knowledge WHY LIA? The Largest Provider of E&O Insurance to AMCs in the U.S. SINCE 1977 POLICIES SPECIFICALLY DESIGNED FOR AMCS COMPETITIVELY PRICED COVERAGE NATIONWIDE COVERAGE WITH "A" RATED COMPANIES STATE AMC BONDS WITH NO ADDED FEES Contact Susan Lomeli Susan@liability.com Ph: (800) 334-0652 X 139 Fax: (805) 962-0652 www.liability.com CA License #0764257 Administrators & Insurance Services LIA_AMC_Print_Ad_Knowledge_2.2917x9.125.indd 1 2/11/15 7:18 PM Optimism Abounds in the Industry The outlook on lender profits, mortgage originations, and home sales are all positive; and the U.S. banking system is well capitalized. 1 JPMorgan Chase has satisfied its $4 billion consumer relief obligation under the terms of a November 2013 settlement over the sales of toxic residential mortgage-backed securities to investors leading up to the financial crisis. Independent settlement monitor Joseph A. Smith, Jr., in his ninth and final report on Chase's progress toward fulfilling its settlement obliga- tion, credited the bank with providing a total of more than $4.06 billion in consumer relief to 168,960 borrowers as of March 31, 2016. Chase paid off its settlement obligation a year and nine months early. Under the terms of the settlement, the bank had until December 31, 2017, to pay it off. 2 Consumer Financial Protection Bureau (CFPB) representatives presented an overview of policy and programs that impact the mortgage industry based off the recently pub- lished rules during the 2016 Five Star Conference and Expo in mid-September. This was the first time the Bureau provided an in-depth, in-person training since the promulgation of the new servic- ing rules. The updated rules include: requiring servicers to provide certain borrowers with foreclosure protections more than once over the life of the loan; clarifying borrower protections when the servicing of a loan is transferred and providing important loan information to borrow- ers in bankruptcy; more clearly defining various roles in the foreclosure process; and requiring servicers to notify borrowers when loss mitigation applications are complete and provide greater protection for struggling borrowers during servic- ing transfers. 3 U.S. Comptroller of the Currency Thomas J. Curry said in a speech at Harvard Kennedy School in mid-September that the U.S. banking system in 2016 is as well capitalized as any in the world as key industry participants continue to apply the basic lessons they learned from the financial crisis of 2008. Curry said that the eight years since the crisis, the banking system has pro- gressed to the point where it would be a mistake to change course, stating, "The hard work that U.S. regulators and bankers did in response to the crisis now has U.S. banks in a position of strength. But my job is to ask how well we—regulators and bankers—are preparing for the next stress event or downturn. And, now is not the time to change course. We must remain vigilant about the levels of capital in good times so it will be there to serve as a bulwark during the next recession. We need to manage the risks of eventually increasing inter- est rates after this extended period of historic lows." 4 The Urban Institute reported that even though private mortgage insurance (PMI) has overtaken the Federal Housing Administration (FHA) for largest share in the U.S.