Fannie Mae Providing Innovations to Improve Lending System

Fannie Mae recently announced innovations in its data and technology offerings, aimed at improving the lending market and reducing lender costs.

Fannie Mae will begin providing lenders access to trended credit data from Equifax and TransUnion via Desktop Underwriter. Fannie Mae will require lenders to use trended data in the underwriting process, which Fannie Mae believes will lead to better-informed underwriting decisions. Fannie Mae will also make non-traditional credit data available for borrowers who do not have a robust credit history. This will give more borrowers access to mortgage credit.

As far as technological innovations, Fannie Mae is consolidating several of its legacy systems into a single platform called Fannie Mae Connect. Additionally, Desktop Underwriter will offer data validation services, which will reduce the need for traditional, more cumbersome methods of income verification, such as paystubs and tax returns.

On June 10, 2015, the CFPB issued  a  final rule amending the regulation defining “larger participants” of various consumer financial services markets. The agency added a section defining larger participants of a market for “automobile financing,” which includes auto loan origination, refinancing of auto loans, auto leasing, and purchase or acquisition of loans or leases. The final rule defines “automobile” as any self-propelled vehicle primarily used for personal, family or household purposes for on-road transportation. Certain vehicles, such as motor homes, RVs, and golf carts, are excluded from this definition.

To learn more, visit: http://www.fanniemae. com/portal/about-us/media/corporate- news/2015/6305.html

CFPB Issues Final Home Mortgage Disclosure Act Rule

On October 15, 2015, the CFPB issued  a  final rule pursuant to the Home Mortgage Disclosure Act, expanding the data that lenders must collect and report under the statute. The Act requires covered “financial institutions” to collect, report, and disclose certain information about mortgage loan applications and originations.

Under the final rule, lenders must collect and report information on the loan term, the duration of introductory interest rates, the property’s value and construction method, the applicant’s debt- to-income ratio, and other details regarding the underwriting process. The final rule also refines the definition of covered “financial institutions.”

To read the final rule, visit: http://files. home-mortgage-disclosure_regulation-c.pdf

CFPB Considers Banning Arbitration Clauses in Consumer Financial Transactions

The CFPB recently announced that it is considering proposing rules that would prohibit the inclusion of arbitration clauses and class action waivers in consumer financial contracts.

According to a study conducted by the agency, more than 75% of consumers surveyed  were unaware of arbitration clauses in their contracts. CFPB’s director, Richard Cordray, commented that “companies are using the arbitration clause as a free pass to sidestep the courts and avoid accountability for wrongdoing.”

To learn more, visit: http://www. proposal-to-ban-arbitration-clauses-that-allow- companies-to-avoid-accountability-to-their- customers/

CFPB’s September Complaint Snapshot Focuses on Mortgages

The CFPB’s September Complaint Snapshot revealed numerous complaints directed at mortgage servicing.

The agency reported that, despite increased protections put in place over the past several years, consumers continue to struggle with  the loss mitigation process and foreclosure prevention. Additionally, consumers have difficulty making payments due to servicing transfers, payment application errors, and lender policies regarding partial payments.

Mortgage complaints comprise the largest category of complaints submitted to the CFPB.

To read more, visit: http://www. complaint-snapshot-spotlights-mortgage- complaints/

CFPB Issues Final Rule Providing Relief to Rural Lenders

The CFPB recently issued a final rule to ease burdens on small lenders providing credit to rural or underserved areas.  The  final  rule  expands the pool of lenders eligible for the “small creditor status,” increasing the annual loan ceiling from 500 to 2,000.

The rule also expands the definition of “rural areas” to include any county or census block not designated “urban” by the U.S. Census Bureau.

The final rule becomes effective January 1, 2016.

To read the final rule, visit: rural-or-underserved-areas-under-the-truth-in- lending-act-regulation-z.pdf

CFPB Issues Updated Dollar Thresholds Under Reg Z

The CFPB recently issued a  final  rule  updating the dollar thresholds  under Regulation  Z. The adjusted thresholds will become effective January 1, 2016.

For more information on the updated thresholds, visit: https://www.federalregister. gov/articles/2015/09/21/2015-22987/truth-in-lending-regulation-z-annual-threshold-adjustments-card-act-hoepa-and-atrqm

CFPB Issues Updated Guidance for TILA and RESPA

The CFPB recently released updated supervisory publications, which include the new October 2, 2015 effective date of the “Know Before You Owe” integrated mortgage disclosure rule.

To read the updated supervisory publications, visit:

CFPB’s August Complaint Snapshot Focuses on Credit Reporting

The CFPB recently released its August Complaint Snapshot, which highlighted consumer complaints regarding credit reporting. Specifically, many complaints related to inaccuracy of information being reported.

According to the agency, credit reporting complaints have increased by 56% over the past year.

To learn more, visit: http://www. complaint-snapshot-spotlights-credit-reporting- complaints/

CFPB Begins Supervising Nonbank Auto Finance Companies

As of August 31, 2015, the CFPB now supervises nonbank auto finance companies that qualify as “larger participants of a market for automobile financing.” Under the Dodd-Frank Act, the agency has the authority to regulate “larger participants” of certain consumer financial markets. Prior to August, the agency already regulated bank auto finance companies. The new regulation brings nonbank entities under the CFPB’s regulatory authority.

A nonbank constitutes a “larger participant of a market for  automobile financing”  if  it originates at least 10,000 accounts each year. “Automobile financing” includes origination, refinancing, leases, and assignments thereof.

To read the final rule, visit: articles/2015/06/30/2015-14630/defining-larger- participants-of-the-automobile-financing- market-and-defining-certain-automobile

CFPB Extends Deadline for Implementation of Integrated Disclosures

On July 24, 2015, the CFPB issued a final rule extending the implementation deadline of the integrated TILA-RESPA disclosure. The extended deadline is October 3, 2015.

To read the final rule, visit: https://www. 18239/2013-integrated-mortgage-disclosures- rule-under-the-real-estate-settlement- procedures-act-regulation

To read the speech, visit: http://www.federalreserve. gov/newsevents/speech/tarullo20150430a.htm