Intercontinental Exchange

Apache is functioning normally

July’s volatile mortgage interest rate environment ended up cutting demand, with lock volume declining for the second month in a row, Black Knight said.

Data from its Optimal Blue product and pricing engine found the conforming 30-year fixed rate mortgage at or above 7% for the first time since last November between July 6 and July 10.

“On both a practical and psychological level, that put further downward pressure on mortgage demand,” said Andy Walden, vice president of enterprise research and strategy at Black Knight. “Purchase loans continue to dominate the origination pipeline, but current housing market dynamics are just not conducive to boosting homebuyer origination volumes.”

The conforming 30-year FRM quickly pushed back down to the 6.7% range before starting to rise again at the end of the month. Since Aug. 1, rates have gone back above 7% again on three — albeit not consecutive — days, the Optimal Blue data said. (Black Knight has an agreement to sell Optimal Blue to Constellation Software as part of a way to win regulatory approval for its own agreement to be purchased by Intercontinental Exchange.)

The Mortgage Bankers Association’s Weekly Application Survey had the 30-year conforming FRM at 7.07% for the week of July 7. It went back above 7% in its Aug. 4 survey.

However, the Freddie Mac Primary Mortgage Market Survey, while getting close to 7%, has not gone over that point since last November.

Black Knight’s measurement of rate lock active, the Market Volume Index, was at 98 for July, down 6.9% from June’s 105 and 30.2% compared with July 2022, when it was 140. It is at its lowest point since April, when it was 93.

The purchase component made up 86 points of the MVI, down 7.4% month-to-month and 25.2% from one year prior.

Over the same time frame, the cash-out refinance index of 8 was 5.4% lower than the prior month and 59.3% from the same month in 2022.

The rate and term index was at 4, up 1.9% from June but 31.2% lower from one year prior. Refis, no matter what the purpose, made up 12% of July’s rate lock volume.

“It’s worth noting, however, that — in a ‘normal’ year — June typically marks the calendar peak of home prices on a non-adjusted basis, so you would normally expect to see a decreasing trend through year’s end and into February,” Walden said.

The inventory shortage has changed that, making the current market anything but normal.

“Rising rates may be tamping demand for homes at such record high prices, as evidenced by rate lock activity, but they’ve still yet to overcome an even greater deficit of supply,” Walden continued. “As a result, the purchase market is in a stalemate.”

Source: nationalmortgagenews.com

Apache is functioning normally

HELOC, Servicing, PPE, Relationship, DPA Products; Events and Webinars This Week

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HELOC, Servicing, PPE, Relationship, DPA Products; Events and Webinars This Week

By:
Rob Chrisman

Tue, Aug 8 2023, 10:41 AM

Lending continues to be intertwined with legal and compliance issues. Here’s a story from overnight that is catching a lot of attention: “Equifax stock falls after saying it received a CID from the CFPB.” The Federal Trade Commission (FTC) agreed to drop its challenge to Intercontinental Exchange Inc.’s (ICE) proposed deal with Black Knight Inc. in a joint stipulation that allows them to work toward a settlement. Lender ToolKit is suing Celebrity Home Loans and MLD. and Meanwhile, lenders and vendors are doing what they can to increase business and tap into new markets, and with that in mind National MI is sponsoring a weekly podcast beginning today focused on offering mortgages to people in their 20s and 30s (Mortgages with Millennials). (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino Company, developer of mortgage technology uniting the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Listen to an interview with Bank of Oklahoma’s Chris Maloney on volatility and spreads, the money supply, and bond over/underperformance.)

Lender and Broker Software, Products, and Services

Everyday expenses are rising for millions, including many prospective homebuyers saving for a down payment. Mosi Gatling, a top producer at loanDepot, leaves no homeowner behind in the Las Vegas market as she assists mainly first-time, military and low-income buyers moving forward with mortgages supported with down payment assistance. Down Payment Resource shares her story and how her team of six does nine figure volume by working closely with Diane Arvizo of the Nevada Rural Housing Authority in Doing Well While Doing Good. We think this is a great example of one thing happening in Vegas that shouldn’t stay there. Read the full story here.

Work Hard Easier. Here’s how to work less and win more in this tough market. Your first instinct may be to work even harder than you have been. But instead, you should focus your energy on the essential tasks: making one-to-one phone calls, having face-to-face meetings, and personalizing your marketing with video content. Automate tasks like prospect follow-up, loan in-process updates, Realtor, and past customer outreach, thank you cards and closing gifts, etc. Set up automated social media posts also. A truly easy SmartCRM system will do all this and more. Take a look at Usherpa’s Relationship Engagement Platform, ranked number one in customer service and client loyalty in the mortgage business. Download this free Field Guide to Success and 3 Habits of Top Producers eguide to see how easy delegation can be.

In continuing to provide ways to grow happiness for our customers, TMS will become the Master Servicer for the Golden State Finance Authority’s (GSFA) Golden Opportunities “GO” a down payment assistance program. As of July 17, 2023, it is open for reservations. The Golden Opportunities DPA make mortgages more accessible for homeowners in CA by providing first mortgage financing, down payment, and closing costs assistance. The guideline eligibility under TMS will include FICO scores down to 620, DTIs up to 55% with AUS approval, and manual underwrites on VA and USDA loans. If you’re not an approved TMS lender, contact TMS. To become a participating lender of the GSFA Golden Opportunities DPA click here.

ICE Mortgage Technology’s VP of Product Strategy, Nancy Alley, was recently named one of HousingWire’s 2023 Women of Influence for her strategic execution and advancement of the Encompass® lending platform. Nancy’s profile spotlights how her unwavering customer focus has led her team to deliver the technology today’s mortgage lenders need to operate more efficiently and deliver a better borrower experience. Curious how Encompass customers are maximizing their technology investment and creating a future-proof business strategy? Click here to hear industry leaders share their key to success for staying at the forefront of innovation.

Big news! The Optimal Blue® PPE is now integrated with Encompass Partner Connect. Current clients can convert to the platform via the Encompass Partner Connect API. This new integration offers many features and benefits, including: a refreshed, modern Optimal Blue user interface; a single sign-on experience; users no longer needing to exit the loan on auto-accept transactions; the ability to view rates across all lock periods on one screen; an enhanced push queue view for secondary users; faster access to updates and new releases; and more! Complete your conversion to start taking advantage of these integration benefits today. Not using the Optimal Blue PPE yet? Learn how it can help you win more business by providing borrowers the right product at the best price for any mortgage financing scenario.

As lenders adapt to volatile mortgage rates, many are stopping to reconsider their servicing strategy. Do inconsistent mortgage origination volumes have you questioning what makes more sense: retaining servicing or selling servicing released? Seth Sprague, CMB, Richey May’s Director of Mortgage Banking Consulting Services (aka, resident servicing expert), outlines the 13 key trends and strategies in servicing including recommendations on how to make the right decisions for your business. Want more help defining the optimal strategy? You know where to find us.

TPO Programs for Brokers and Correspondents

Rising interest rates and inflation causing a dip in originations? Maximize your portfolio reach with HELOC options designed to help your customers tap into their home value to remodel kitchens, fund education, and more. LoanCare has a comprehensive understanding of the special nuances involved in servicing HELOCs such as knowing what’s required to appear on monthly statements, ensuring that interest calculations are accurate, and setting up the HELOCs correctly when the loans are on-boarded. We can accommodate segmented, fully amortized, and interest only HELOCs. Contact LoanCare today!

Events and Webinars

Back in 2016, Netflix reported that the machine learning algorithms behind its personal recommendation engine were saving the company $1 billion in content spending a year. AI and intelligent automation aren’t just technologies of the future, they’re tools you can and should be using to reach borrowers with the right message at the right time. Join Partners Mortgage’s Katie Pastor Trinidad and Joe Wilson of Social Coach alongside Dave Savage of TrustEngine on Thursday, August 10 at 2 pm ET for a free webinar on how AI can help you increase borrower engagement and loan conversions. Register today.

Lenders, want to save you and your borrower time and money? Appraisal waiver programs like Fannie Mae’s Value Acceptance + Property Data allow lenders to skip a traditional appraisal, saving the time and cost associated with it. Watch a free webinar recording featuring Lyle Radke, Senior Director of Collateral Policy at Fannie Mae. Learn the benefits of this program, use cases, and find answers to common lender questions. Plus, discover how to quickly get started with the program.

Modern financial institutions rely on their technology ecosystem to support the needs of increasingly diverse customer bases. But without a connected solution, financial institutions can’t provide seamless, personalized experiences that build lifelong relationships. Total Expert is purpose-built to help you deliver the perfect mix of digital and human-led engagements as modern consumers flow between digital channels, SMS, and in-person interactions. That’s why leading lenders like Guaranteed Rate, Atlantic Bay Mortgage, and PRMG trust Total Expert as the hub that connects their technology ecosystems and helps them deliver the perfect financial journey. Join us for a fireside chat with these industry trailblazers on Wednesday, Aug. 16 when they’ll present: Strategies for defining your tech ecosystem and goals, priorities for evaluating and procuring the tech that meets your goals, methods for generating and measuring ROI from your tech investments, and a live Total Expert platform demo. Register for the webinar.

Are you wondering what today’s Fed decision means for rates and the mortgage market? Register for a new webinar on August 9th at 11AM PT hosted by Agile Trading Technologies.

In this webinar, Phil Kukafka of Towne Mortgage, Ryan Ferderer of Multi-Bank Securities, and Andrew Rhodes of MCT will give an overview of MBS pooling, discuss the current market, share strategies for efficiently pooling and selling mortgage-backed securities, as well as the process for MBS pooling using Agile’s technology.

Join Optimal Blue for the next session in its Hedging 301 series on Wednesday, Aug. 9th, Noon ET, take a deeper dive into more advanced capital market strategies and how they naturally interplay with technological advances. This session will address the many ways Optimal Blue helps clients streamline daily processes to achieve success and optimal best execution – including mandatory price discovery and dissemination, saving basis points while delivering representative mix, solving for numerous execution iterations, and integrating to the MSR broker community for live, loan-level servicing valuations.

Join AGENT U on August 8th at 12:30-1:30pm EST for the next installment of their free monthly webinar. This month, the hosts are speaking with credit repair expert Janna Fox, CEO of ReScore, to learn about credit misconceptions. Learn how collection companies affect consumers’ credit scores, how to spot errors on credit reports, and gain insight into the hidden damage caused by pulling credit. Plus, learn expert methods to rapidly improve credit scores. Janna will be answering your questions during the live Q&A session. Visit www.agentulive.com for more details.

Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup with Robbie and Rob Chrisman” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT starting August 9th, Robbie and Rob will dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Robbie and Rob will bring a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. Register for the first show on August 9th with Lenders One’s Justin Demola, CMB, as a featured guest discussing chatter from his hundreds of members.

“AFR Wholesale® (AFR) is teaming up with financing experts from Fannie Mae for the next session of our Why Wait Live Webinar Series! Please join us Wednesday, August 9th at 2 PM EST, where we will be highlighting what you need to know about manufactured home financing. Over this series, AFR has been discussing affordable financing solutions that together will help us provide homeownership opportunities to more families. Register Today! This is a live webinar, and a recording will not be provided.”

Friday the 11th at 3PM ET is the next edition of The Mortgage Collaborative’s Rundown with Melissa Langdale and me. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown”. Special guest co-host Skylar Olsen, Zillow’s Chief Economist.

James Brody, who was named Senior Litigation Partner in the wake of his merger with Garris Horn, LLP, will be co-hosting a webinar with The Mortgage Collaborative (“TMC”) at 10:00 AM PST, on August 17, titled: “Repurchase Defense Roundup: Proven Strategies to Help Lenders Fight Repurchase Demands and Pursue Culpable Third Parties.” Both Mr. Brody and his colleague, Ingrid Petersen, look forward to educating attendees on a number of invaluable strategies that will help them more effectively fight repurchase demands and improve their chances of being made whole whenever a lender is not able to successfully dispute a claim because of bad facts and/or needs to preserve a business relationship.

Capital Markets

Bond yields push higher to open the week following hawkish comments from Federal Reserve officials. New York Fed President Williams sees Federal Reserve policy remaining restrictive “for some time” and Fed Governor Bowman said that additional rate hikes will likely be needed. Rates have also been pushed higher following last week’s double-whammy of Fitch’s ratings downgrade and the heavy supply announcement from the U.S. Treasury. And don’t forget non-farm payrolls from Friday, which showed that despite missing the headline number and the previous month’s observations being revised lower, wage growth increased more than anticipated.

July marked the second consecutive month of job growth below 200k, signaling the labor market continues to cool. However, wages held firm, adding to arguments the Federal Reserve has gotten the upper hand on inflation without triggering a recession or major job losses. The unemployment rate declined to 3.50 percent, which is slightly above the 53-year low set back in January. The ISM manufacturing index improved but remained in contractionary territory for the ninth straight month in July. Price paid eased for the fifth time over the last seven months. Meanwhile, service data showed moderate expansion once again as consumers shift spending from goods to services. The most recent Senior Loan Officer Opinion Survey shows credit conditions for commercial and industrial loans remain tight and 40 percent expect further tightening. This could create a drag on growth as projects become delayed or abandoned due to lack of financing.

Though this week will be dominated by the Consumer Price Index report on Thursday and the Producer Price Index on Friday, as well as consumer sentiment, small business optimism, and mortgage earnings from United Wholesale, Loan Depot, and Guild, today’s economic calendar kicked off with NFIB small business optimism for July (hitting an 8-month high). We’ve also received the June trade deficit ($65.5 billion). Later today brings the beginning of Treasury’s quarterly refunding when it auctions $42 billion 3-year notes. Two Fed speakers are scheduled, Philadelphia President Harker and Richmond President Barkin. After the yield curve extended its recent steepening move yesterday, we begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.98 after closing yesterday at 4.08 percent, bonds rallying in part due to some slow-growth news out of China.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Mortgage tech firm Lender Toolkit sued two mortgage lenders claiming that the companies failed to make payments while continuing to use its services and software solutions.

Lender Toolkit accused Celebrity Home Loans and MLD Mortgage of breach of contract. Lender Toolkit says Celebrity owes at least $97,288 and MLD Mortgage $138,069. That’s according to separate filings made in the U.S. District Court for the District of Colorado in May. Both lenders entered into a contract with Lender Toolkit in 2021.

Lender Toolkit is a provider of mortgage automation as a service solutions that integrates with Intercontinental Exchange‘s (ICE’s) loan origination system Encompass, according to its website. 

Lender Toolkit’s solutions allow lenders to automate and simplify tasks including disclosure generation and delivery, income calculations and verification and post-closing processes.

Though the three-page lawsuits offer little detail about the contract, including when the lenders stopped paying and what services were offered, a filing from MLD’s chief legal and chief enterprise risk officer included a copy of the contract with Lender Toolkit.

None of the plaintiffs or defendants responded to requests for comment. 

Lender Toolkit charged MLD Mortgage a $2,000 Mortgage Electronic Registration System (MERS) automation set up fee and a $2,000 FHA Upfront Mortgage Insurance Premium (UFMIP) automation fee. 

The vendor charged $2 per funded loan for MERS automation with a minimum of 750 loans per month; and $250 per funded loan for FHA UFMIP automation with a minimum of one loan per month, according to the contract. 

MLD claimed that Lender Toolkit submitted invoices after December 2021 that contained instructions to remit payment to Salt Lake City, Utah and invoices prior to that were submitted to a different PO BOX in Bountiful, Utah. 

On Friday, Lender Toolkit and MLD agreed to transfer the case to New Jersey, where MLD is headquartered after the lender filed to dismiss for improper venue or alternatively transfer venue earlier in August. 

MLD’s Colorado business volume between 2019 and the present accounts for less than 0.1% of its national business volume while production in New Jersey took up about 26.6%, according to MLD. 

MLD Mortgage, doing business as Money Store, posted origination volume of $906 million in 2022, according to data from mortgage tech platform Modex. The lender’s origination volume came in at $261.6 million in the first six months of 2022. The lender has 122 sponsored MLOs and is licensed in 47 states across the country, according to the Nationwide Multistate Licensing System (NMLS).

Celebrity Home Loans hasn’t responded to the allegation. The Oakbrook, Terrace, Illinois-based lender abruptly terminated about 92% of its staff in February and On Q Financial’s deal to acquire some of the company’s assets fell apart. 

The lender has two sponsored MLO and seven active branches in Colorado, Hawaii and Missouri, according to the NMLS. Celebrity’s license was revoked in California in July and suspended in Massachusetts in April, regulatory filings showed.

Source: housingwire.com

Apache is functioning normally

The Intercontinental Exchange purchase of Black Knight took one giant step closer to completion this morning as both companies joined the Federal Trade Commission in a motion to dissolve the temporary restraining order.

Any agreement is not likely to satisfy deal opponents like the Community Home Lenders of America, who are worried about the breadth of the market ICE Mortgage Technology could possess unless certain conditions are applied.

The filing in the Federal District Court for the Northern District of California was made without prejudice, meaning that the restraining order request can be brought back before the court if settlement negotiations are unsuccessful. Without this motion, the court had been set to hold a hearing between Aug. 14 and Aug. 16.

Several observers have noted the FTC might be out to save face following some big losses in antitrust litigation, including Microsoft-Activision Blizzard.

On ICE’s Aug. 3 second quarter earnings call, Chairman and CEO Jeffrey Sprecher said his company was in discussions with the federal agency.

Besides removing the restraining order, ICE and Black Knight agreed to not close the transaction for 10 calendar days following signing an “Agreement Containing Consent Orders” for submission to the FTC. That related agreement is indicative of how close the parties might be to a settlement, a note from Ryan Tomasello of Keefe, Bruyette & Woods said.

If an agreement is not reached by Aug. 25, the 10-day hold pact can be dissolved with three days’ notice by any of the parties. 

On Aug. 4, before this latest wrangle, the Community Home Lenders of America, which has been outspoken in its opposition, sent a letter to both the FTC and the Consumer Financial Protection Bureau, demanding “If… this purchase is approved, there must be a process to monitor and curtail ICE anti-competitive actions, either as a part of an agreement with the FTC or through CFPB monitoring and use of statutory authorities to prevent anti-consumer actions.”

The divestitures of the Empower loan origination system and Optimal Blue product and pricing engine (both are being sold to Constellation Software in separate transactions) will not prevent the combination from using its pricing power against independent mortgage bankers, the letter said.

ICE already engages in such practices as “one-way pricing mechanisms for user seats, vendor access click fees that are simply junk fees tying and bundling, and unfair treatment of lenders,” the letter said.

As for alternatives to Empower, most independent mortgage bankers can’t create their own LOS so the realistic alternative of switching is difficult because it is not compatible with other systems and ICE is unwilling to facilitate system switches, CHLA said.

“ICE’s determination to move forward with the purchase, even being willing to divest Empower and Optimal Blue, implies that they see significant vertical integration pricing advantages of becoming the dominant player in software services for both mortgage origination and servicing,” the letter said.

CHLA wrote the letter as talk about a possible settlement began to gain steam. The group is looking for the FTC to add stipulations to any settlement agreement to address those concerns, said Scott Olson, its executive director. It also wants the CFPB to monitor and take action for any anti-consumer impacts.

“These issues and concerns are not going to go away,” Olson said in a follow up interview.

ICE had not responded to a request for comment by press time.

But the markets are now betting that the deal will close. The revised terms following the Empower agreement brought the purchase price down to around $75 per Black Knight share to be paid in ICE stock and cash.

In recent weeks Black Knight has been hanging around $70 per share since the Optimal Blue sale was announced. On Monday morning it opened at $74.75 per share after closing on Friday at $71.50.

“If the deal does not go through for some reason (which seems unlikely at this point), Black Knight would still receive a $725 million break-up fee before tax and also has remaining equity ownership in Dun & Bradstreet to factor into the valuation (over $200 million after tax),” William Blair analyst Stephen Sheldon in a note this morning. “In aggregate, we estimate the after-tax value from these two items would be just over $5 per Black Knight share.”

KBW gives the deal a $75.64 per share current valuation, while William Blair puts it at “just under” $76 per share.

Source: nationalmortgagenews.com

Apache is functioning normally

Black Knight reported slimmer profits and slowing organic growth in the second quarter, largely due to weaker mortgage volume from clients as well as near-term effects from the proposed merger deal with Intercontinental Exchange (ICE).

The company’s profit dropped 61% quarter over quarter to $55.3 million in Q2 2023. Profit rose 32% from $40.3 million in Q1 2023. 

“Our second quarter results reflect a weaker than expected mortgage market coupled with the near-term effects of the proposed merger with ICE. Revenue declined 4% on an organic basis driven by lower origination volumes as well as indirect effects of the mortgage market on our originations software business,” Black Knight CEO Joe Nackashi said in a statement.

Black Knight’s revenue in the second quarter reached $368.2 million, declining 7% from the same period in 2022.

“High interest rates following the rapid rise since early 2022 continue to cause operational challenges for Black Knight’s clients and prospects,” the company noted in its 8K filing.

Heightened focus on expenses by clients and prospects, as well as the proposed ICE transaction, has elongated the sales cycles in the short term; market conditions continue to result in elevated originator consolidation, bankruptcies and associated attrition, according to its filing with the Securities and Exchange Commission (SEC). 

Software solutions represented 87.9% of the revenues in the first quarter, with an operating margin of 41.4%, down from 45.6% in the same period of 2022. 

“Our origination software solutions revenues decreased $15.6 million, or 13%, as revenues from new clients were more than offset by a decrease of $8.3 million in license fees and the effect of lower origination volumes and attrition,” according to the company’s 10 Q filing with the SEC. 

The remaining revenue came from data and analytics, a segment with an operating margin of 15.2% from April to June, compared to 24.9% in the previous year.   

Development on ICE-Black Knight merger 

With ICE’s proposed acquisition of Black Knight under review by the Federal Trade Commission (FTC), the two companies and the FTC are expecting a preliminary injunction hearing scheduled for August 14 – August 18. 

Black Knight, ICE and the FTC asked for a delay as the planned sale of Optimal Blue in July requires time for the FTC staff to analyze the implications of the divestiture and discuss a potential resolution of the pending matter.

ICE and Black Knight also announced an agreement to sell loan origination system Empower to a subsidiary of Canada’s Constellation Software in March to quell FTC’s antitrust concerns. 

Following ICE and Black Knight’s announcement of an agreement to sell Optimal Blue, Keefe, Bruyette & Woods (KBW) noted that the divestiture of Black Knight’s Optimal Blue leaves the FTC with a weak case as it remedies the remaining horizontal overlap cited in the FTC’s complaint.

KBW had floated the possibility of the FTC settling on the ICE-BK merger deal before the August 14 trial, allowing the deal to close Q3 2023.

“As this case continues to evolve, it is not possible to reasonably estimate the probability that the parties will ultimately reach settlement or that the FTC will ultimately prevail on its claims. Should the parties not reach a settlement, we intend to vigorously defend against the claims of the FTC,” Black Knight’s 10 Q filing said. 

Due to the transaction with ICE, Black Knight has suspended the practice of providing forward-looking guidance.

Source: housingwire.com

Apache is functioning normally

The Community Home Lenders of America (CHLA) has compiled a new document it is calling the “consumer mortgage bill of rights,” based on a series of different actions and proposals it has made to companies and federal agencies including the Consumer Financial Protection Bureau (CFPB), the Federal Housing Administration (FHA), the Federal Housing Finance Agency (FHFA) and Intercontinental Exchange (ICE) since 2021.

“Perhaps more than any other financial product, mortgages offer a wide array of specific consumer protections including RESPA, TILA, TRID, LO Comp, HOEPA, servicing rules, and many others,” CHLA said in a statement regarding the document.

“These rules apply whether the lender is a bank or a non-bank; although, consumers have significantly more protections with non-banks in the realm of licensing requirements and CFPB supervision. Despite these protections, there are still several gaps and loopholes that must be closed, as outlined in this Consumer Mortgage Bill of Rights,” CHLA added.

The document includes seven items, included in full below. They begin with the outlined right as interpreted by CHLA, an underlying communication the organization sent that outlined that right and a recommended action to put it into practice:

  1. The Right to Say No to Abusive Trigger Lead Solicitations. Consumers should be in control of deciding whether to receive dozens of solicitations after mortgage credit pulls.

    CHLA: November 2022 Letter to CFPB and July 2023 Letter to Congress.
    ACTION: The FTC should create a true opt-in option when a credit report is pulled.

  2. The Right to Robust Competition in Mortgage Services Market. One company should not have quasi-monopoly pricing power or be able to utilize practices like tying.

    CHLA:  June 2022 Letter to FTC/DOJ and February 2023 Letter to ICE.
    ACTION: The FTC should continue its opposition to the ICE purchase of Black Knight.

  3. The Right to Affordable Credit Report Pricing. Last year FICO used its monopoly status to raise credit report prices 400% while simultaneously offering sweetheart deals for a few large lenders.

    CHLA:  November 2022 Letter to FHA and FHFA asking them to bar these price hikes.
    ACTION: FICO should rescind the 400% price increase and price all lenders the same.

  4. The Right to Robust Dual Compensation Consumer Protections. Loan originators acting as realtors should be licensed, free of conflicts of interest, and with full disclosure.

    CHLA: March 2023 Letter to CFPB recommending these consumer protections.
    ACTION: The CFPB and/or states should mandate the consumer protections above.

  5. The Right to Obtain a Mortgage Through a Qualified Mortgage Loan Originator.  Loan originators at banks are exempt from basic professional qualifications requirements including the SAFE Act test, independent background checks, and continuing education.

    CHLA: October 2021 Letter to CFPB on SAFE Act parity.
    ACTION: The CFPB should require all loan originators to meet these requirements.

  6. The Right to Have Pricing Parity Requirements Apply to All Loan Originators. Loan originators at mortgage banks are prohibited from varying their loan fee for different borrowers; however, a loophole allows mortgage brokers to use different channels to vary loan fees.

    ACTION: The CFPB should close the LO Comp loophole for mortgage brokers.

  7. The Right for All Borrowers to End MI Premiums When Loans Hit 78% LTV. The HPA mandates an end to mortgage premiums for most loans that pay down to 78% LTV.

    CHLA: May 2022 Sign-on Letter Calling for an end to FHA Life of Loan Premiums. ACTION:  FHA should end Life of Loan Premiums (put in place in June 2013).

The accompanying CHLA letters can be viewed at the organization’s website.

While there is a fair amount of protection for consumers engaging in obtaining mortgage financing, there is always room for improvement according to Scott Olson, executive director of the CHLA.

“Consumers obtaining a mortgage loan enjoy more consumer protection than with any other financial product – however we can do better,” he said. “CHLA’s ‘Consumer Mortgage Bill of Right’s’ identifies the most common mortgage abuses along with effective, practical solutions to provide full protections.”

Source: housingwire.com