Servicing

Servicing gains failed to offset steep origination declines at the bank, which continues to battle allegations of racial discrimination.

The Consumer Financial Protection Bureau argues borrowers in the case had a right to answers even if the inquiries were origination related and foreclosure litigation was pending.

Three housing finance organizations asked for an interactive process similar to that used previously for originations and said they preferred less reliance on life-of-loan indemnification as a remedy.

Average per-loan charges last year were little changed despite the addition of a new temporary fee for refinancing. Those for loan-to-value ratios above 80%, home-purchase financing and adjustable-rate mortgages only rose slightly.

The Servicemembers Civil Relief Act includes extra protections aimed at preventing foreclosure for homeowners in the military.

The agency said the risk management program for Cenlar FSB, which performs servicing functions for financial institution clients, was inadequate for the bank's size.

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.