Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.
One year ago today marked a pivotal change in the industry. On this day last year, the Consumer Financial Protection Bureau officially held lenders, vendors and everyone in the industry accountable for the Know Before You Owe rule.
You probably remember it well, whether you were in the office more than 40 hours a week, every week, for the two months prior trying to get compliant or working on a new code for your system that took into account the Know Before You Owe changes. The entire industry worked in overdrive to adjust.
Also known as the TILA-RESPA Integrated Disclosure rule, or TRID, the rule forever changed the way business is done with borrowers since it seeks to better inform them about costs before the closing date.
Over the past 365 days, TRID impacted the industry in many different ways, and while you can find the full story here on what has gone on over the last year, here is a quick update on the current status of TRID in the industry.
First, the time to close a loan — one of the most scrutinized mortgage statistics in the industry — fluctuated as the industry adjusted. After rising, falling, and rising again in the wake of the implementation of TRID, the latest report from Ellie Mae shows that the time to close a mortgage loan appears to finally be settling into a new normal – about a month and a half.
Early on, the average time to close a loan increased from 46 days in October 2015, when TRID took effect, to as high as 50 days in January of this year.
According to the latest Origination Insight Report from Ellie Mae, the time to close a loan averaged 46 days during the month of October, marking three straight months of the time to close coming in at 46 days.
Meanwhile, the second important thing to note with TRID is that it’s still not officially finalized.
The comment period for the proposed updates to TRID closes on Oct. 15. The CFPB announced the updates at the end of July after the industry asked for greater clarity and certainty on the rule.
There are plenty of areas to weigh in on in the proposed update, with more than 100 instances in the rule that the CFPB specifically asks for comment. Simply searching the words “seeks comment” in the proposal generates 150 results on 23 pages.
Now that you’ve had a year to feel out TRID, don’t miss out on the chance to submit any concerns or problems that you have noticed along the way. There are less than 15 days left, and there are definitely areas that industry has struggled with. And once the door closes, who know if it will ever open again.
Trouble is far from over for Wells Fargo as the city of Chicago and the state of Illinois added their names to the list of places that are looking to limit business with the bank.
In the wake of Wells Fargo’s sales scandal, which erupted earlier this month, an article in Reuters by Karen Pierog said that “Alderman Edward Burke, who heads the Chicago City Council's finance committee, introduced an ordinance on Friday that would suspend the bank from acting in several capacities, including as a municipal depository, bond underwriter and financial adviser.”
From the article:
"The city council should not engage in any business for the next two years with this institution that has deceived, defrauded and duped its customers," Burke said in a statement.
Illinois Treasurer Michael Frerichs set a Monday news conference to announce "plans to suspend billions of dollars in investment activity with Wells Fargo," according to an advisory from his office on Friday.
This news comes shortly after California’s state treasurer, John Chiang, announced that the state is suspending its “most highly profitable business relationships” with Wells Fargo for at least one year in the wake of the scandal.
And last Thursday, Oregon State Treasurer Ted Wheeler said that Oregon trust funds, including the Oregon Public Employees Retirement Fund, Oregon Short-Term Fund, Oregon Common School Fund and State Accident Insurance Fund, hold “substantial” shares in Wells Fargo and will seek changes to the company.
In fact, Wheeler said that Oregon will push for management structure and executive compensation reforms at Wells Fargo.
Movement Mortgage, which was recently listed as one of the fastest-growing companies on the Inc. 5000, launched a new digital mortgage application platform last week.
The company partnered with Silicon Valley-based Blend Inc. to develop The Movement Easy App, which allows users to submit a mortgage application from their phone, tablet or computer. The app also syncs bank statements, tax returns, payroll data and other common documentation.
“We have an opportunity to democratize mortgage lending, and create a mortgage experience that the next generation of homebuyers expect,” said Movement Mortgage Co-founder and CEO Casey Crawford.
Rumors continue to swirl around Deutsche Bank AG’s settlement talks with the U.S. Justice Department.
In mid-September, sources close to the case told The Wall Street Journal that while an official settlement is not yet public, the DOJ proposed that Deutsche Bank pay $14 billion to settle a high-profile set of mortgage-securities cases that date back to the financial crisis.
However, shortly thereafter, the German bank quickly came back and said it “has no intent to settle these potential civil claims anywhere near the number cited.”
Now in the latest update from an article in The Wall Street Journal by Jenny Strasburg and Aruna Viswanatha, talks “are continuing, with no deal yet presented to senior decision makers for approval on either side.”
From the article:
People familiar with the continuing settlement talks say details remain in flux. Justice Department lawyers have floated the possibility of also reaching accords with other European banks who have yet to resolve similar investigations and announce them at once, but no such move is certain, the people say.
Spokesmen for Deutsche Bank and the Justice Department declined to comment.
The rumors on a settlement are as recent as this past Friday when the DOJ and the bank were supposedly close to a $5.4 billion settlement, the article stated.
The stakes are high for the German bank since if it does turn out to be a $14 billion settlement, it could need a bailout from Germany.
Allegedly, the country prepared rescue plans if the bank needed additional capital to pay the fine and could not raise the money from the markets, although the German government is denying the plan exists.
Keep watch on HousingWire to see if there will finally be any answers to the Deutsche Bank rumor mill and if Wells Fargo will get any closer to wrapping up its giant sales scandal. For now, feel free to leave any fond memories, or nightmares, about TRID over this past year in the comment section below.
