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23 » VISIT US ONLINE @ DSNEWS.COM CFPB DIRECTOR TELLS SENATE HIS BUREAU HAS MADE "CONSIDERABLE PROGRESS" In testifying before the Senate Committee on Banking, Housing, and Urban Affairs ear- lier this week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said the CFPB had made "considerable progress" toward its goal of protecting consumers since the passage of the Dodd-Frank Reform Act in 2010. "In passing the Dodd-Frank Act, Congress vested in this new Bureau the responsibility to stand on the side of consumers and to help restore their trust in the financial marketplace," Cordray told the committee. "Over the past three years, we have made considerable progress in fulfilling our rulemaking, supervisory, and enforcement responsibilities to protect people all across this country." Cordray cited as evidence of the progress several mortgage rules passed by the CFPB after many months of consulting with industry pro- fessionals and stakeholders. e new mortgage rules, which took effect at the beginning of this year, are aimed at preventing the problems that led to the housing crisis and financial meltdown. e rules regulate loan originators' compensa- tion practices and require lenders to make good- faith assessments as to the borrowers' ability to repay loans. e rule implementing the "Know Before You Owe" mortgage forms was issued last fall and ensures that consumers know all their options when pursuing a mortgage loan and helps them prevent surprises. e work of the CFPB's enforcement team responsible for investigating violations has led to approximately $4.7 billion in relief to date for about 15 million harmed consumers who were victims of illegal business practices, according to Cordray. He gave as an example the penalty imposed by the CFPB on Ocwen Financial, the nation's largest nonbank mortgage lender, in December, for engaging in "significant and systemic misconduct that occurred at every stage of the mortgage servicing process" that included charging illegal fees and deceiving borrow- ers regarding foreclosure alternatives. Ocwen was ordered to pay $2 billion in relief through principal reduction to underwater borrowers and an additional $125 million to about 185,000 bor- rowers who had been victims of foreclosures. "At the heart of our mission is the premise that consumers deserve to have someone stand on their side and make sure they are treated fairly in the financial marketplace," Cordray said in his testimony. "Since the day we opened our doors and received our first few hundred con- sumer complaints, we have now handled nearly 440,000 complaints and secured both monetary and non-monetary relief on behalf of tens of thousands of individual consumers, including many people in each of your states." CFPB OFFICIAL DISCUSSES NEW SERVICING RULES A recurring theme during many of the six labs at the Five Star Conference was compliance and how it has changed the mortgage and real estate industries in the last few years. e laws are constantly changing, however, making compliance an even further complicated issue. Laurie Maggiano, a program manager for servicing and secondary markets at the Consumer Financial Protection Bureau (CFPB), was on hand to discuss the ever-changing world of mortgage servicing statutes for the "CFPB's National Servicing Standards – Update Ses- sion" section of the FSC Compliance Lab on September 15. "Mortgage servicing in 2014 isn't NASCAR, where you direct your staff around a predicable track repeating the same steps over and over," Maggiano said. "To a great extent it is like a rodeo with state and federal regulators changing the rules of engagement, bank and non-bank servicers competing for product, and investors so risk averse that it is surprising there are any new loans coming out of the chute. It is a demanding but also an exciting and creative time to be in this business." Maggiano presented four new actions that have either recently been enacted or are pend- ing with comments welcome. e first was the Interpretive Rule on Successors in Interest e, which was published on July 8. e Ability to Repay or ATR rule, which became law last January is intended to stop consumers from assuming debt they cannot repay, and applies to new originations and mortgage assumptions. e Interpretive Rule was added to give an exemption from the ATR rule to successors in interest who inherit a property's HED but are not listed on the mortgage, such as divorced or surviving spouses. e second action that Maggiano discussed was the Publication of Consumer Complaint Narratives, which was proposed on July 17 with comments due September 22. is proposal involves expanding the existing consumer com- plaint database to include the text of consum- ers' complaints against financial institutions. While the CFPB says such a rule will benefit consumers by providing them with necessary information and will result in more transpar- ency among financial institutions, some analysts have criticized this rule, since there is no way to verify the allegations made in the complaints, the CFPB may in some cases be publishing un- founded grumblings of disgruntled individuals. e third rule brought up was the Home Mortgage Disclosure Act (HMDA) Proposed Rule, which was issued on July 28 and is tak- ing comments until October 22. Some of the proposed new HMDA data fields were required by the Dodd-Frank Reform Act in 2010, but the CFPB would also be expanding the reporting by adding some data fields. e new rule would also standardize reporting between large and small banks. e Servicing Transfer Bulletin, which was published on August 19, was the fourth action Maggiano discussed. While it is not the purpose of CFPB to inhibit transfers, she said, the purpose of this rule is to ensure that borrowers, especially those in the process of loss mitigation, are not harmed in any way by a mortgage loan transfer over which they have no control. Indeed, the summer of 2014 was a busy one for updating CFPB laws and proposing new ones, which is bound to keep servicers on their toes as far as compliance goes. "As you can see by the pace of change in just the past two, quiet, lazy months of sum- mer, when you might expect that Washington shuts down and goes home, servicing policy is dynamic and fast paced," Maggiano said. The state with the longest average time to complete a foreclosure in Q3 2014 was New Jersey, at 1.064 days, according to RealtyTrac. KNOW THIS

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