Servicing

Elizabeth Warren asked the Federal Reserve this week to force the spinoff of the bank’s nonbanking operations. Wells, which was recently hit with another $250 million fine, countered that it has made significant progress in improving its risk management and addressing misconduct.

The Office of the Comptroller of the Currency slammed the scandal-plagued bank for violating a 2018 consent order and for problems with loss mitigation practices in its home lending division. The bank will also be restricted from acquiring certain residential mortgage servicing rights.

Financial institutions will have until early October to weigh in about new risk-based capital requirements for nonbanks.

The agency developed measures taking effect Aug. 31 that, among other things, will allow lenders to prioritize foreclosures of the most impaired loans and then focus on modifying salvageable ones.

States have the option of adopting the oversight framework issued by the Conference of State Bank Supervisors, which resembles capital and liquidity plan proposed by the Federal Housing Finance Agency.

The guarantor has for the first time proposed a risk-based capital requirement for companies not subject to other federal regulation. The industry says the plan, which would impose a heavy charge for servicing portfolios, could drive lenders away from government-backed programs.

The plan aims to cut monthly payments by roughly 25% for homeowners in government-backed mortgages who are negatively impacted by the pandemic.

The Consumer Financial Protection Bureau issued a temporary final rule that allows mortgage servicers to initiate foreclosures on abandoned properties and certain delinquent borrowers, but it also outlined additional measures that shield distressed homeowners.

Ginnie Mae is allowing lenders to securitize modified home loans with this extended term as the Biden administration works to make more housing options available for struggling borrowers.

Most of the activity covered vacant and abandoned properties or commercial loans, according to Attom Data Solutions.