CFPB Chair says he is open to reviewing the LO comp rule

🚼 Wednesday, the week's middle child, has arrived. Today’s newsletter is 635 words, a 2.5-minute read.

1. CFPB's Chopra slams credit reporting agencies

Rohit Chopra, head of the Consumer Financial Protection Bureau, and Bob Broeksmit, CEO of the Mortgage Bankers Association, debated junk fees at the MBA Secondary Capital Markets conference.

Chopra criticized significant price hikes by credit reporting agencies (Experian, Equifax, Transunion, and FICO) since 2022, with some fees rising 400%. These increases affect both lenders and consumers, baked into origination fees and mortgage rates.

Key points:

• Mortgage lenders often pay multiple times for credit reports and verifications.

• FICO charges $3.50 per score, amounting to $10.50 for a tri-merge report, doubling for two borrowers.

• Individual credit reports now cost $18-$30, and up to $60 for tri-merge reports.

• Chopra suggested regulatory measures to protect consumers from excessive fees.

Chopra concluded, "We have a lot to do to think about how we’ll use data in ways that broadly benefit the market, rather than just give a handful of firms the ability to extract junk fees and push up costs for everyone."

2. HUD increases the maximum fee lenders can charge for a loan assumption from $900 to $1,800

The U.S. Department of Housing and Urban Development (HUD) announced an increase in fees for assumable mortgages to enhance market efficiency and affordability.

At the MBA Secondary & Capital Markets Conference, acting secretary Adrianne Todman stated that HUD will double the fee servicers can charge for processing, underwriting, and closing loan assumptions, currently capped at $900.

This change aims to help servicers cover costs and address challenges posed by elevated interest rates and housing supply gaps. Trade groups, such as the Community Home Lenders of America (CHLA), praised this move, emphasizing its potential to facilitate significant mortgage savings for homebuyers. LINK

A MESSAGE FROM MORTGAGE NUGGETS

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3. More Nuggets

🔬 CFPB Chair says he is open to reviewing the LO comp rule. (Yahoo)

💸 Gen Zers and Young Millennials took out 40% of U.S. mortgages in 2023. (Redfin)

🏠 Here's where rents are rising — and where they're falling. (CNBC)

4. Charted: Mortgage rates too good to give up

The gap between the mortgage rate on new loans and the rates most mortgage holders have is the widest it's been in more than 25 years.

This mortgage rate lock has prevented 1.3 million home sales between the second quarter of 2022 and the fourth quarter of 2023, per a working paper from the Federal Housing Finance Agency out earlier this spring.

5. Rocket settles $3.5M lawsuit alleging unpaid employee overtime

Rocket Mortgage has agreed to a settlement of up to $3.5 million over allegations that it failed to pay overtime, violating the Fair Labor Standards Act. This settlement was filed in a federal court in Arizona last Friday.

Rocket "expressly denies and continues to deny the allegations," according to the filing, but "desires to settle the Lawsuit finally on the terms and conditions set forth in this Agreement."

The filing announcing the settlement states that both parties are barred from discussing the settlement with media. LINK

You’re all caught up. See you on Friday!

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