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    Freddie Mac reported a $354 million net loss in the first quarter, significantly down from its $2.2 billion net income recorded in the fourth quarter of 2015. The news is a reminder of the GSE's net loss in the third quarter of 2015, which marked the first loss in four years. But despite the news, Freddie CEO Donald Layton remains positive on the results. Click the headline to find out why.


CFPB sees 10 million borrowers at-risk of credit default

Consumer Financial Protection Bureau Director Richard Cordray wrote an op-ed in Politico Monday, estimating 10 million borrowers remain at risk of defaulting on their debt obligations.

He outlines what the CFPB is doing to protect borrowers and credible financial institutions, while highlighting that there are 4 million mortgages currently more than 90-days delinquent with one quarter of all mortgages in negative equity at the end of the second quarter.

Cordray describes the pre-crisis market as the Wild West of lending and says the CFPB is tackling the problem at the front-end by focusing intensely on servicing issues.  

"This is tough work that will take careful thought and time," Cordray wrote. "But we also recognize we can help struggling homeowners now. That is why we are taking action on the mortgage servicing front to help consumers as quickly as possible."

Cordray said the recent $25 billion mortgage servicing settlement is receiving a great deal of attention, but less attention has been paid to the fact that there are independent, nonbank firms that service subprime and late loans, and those firms are not part of the settlement.

"These nonbank servicers used to receive little or no oversight. The CFPB is changing that," Cordray said. "Our new authority allows us to supervise both banks and nonbanks. Indeed, for the first time, the federal government will have the authority to look into the entire mortgage servicing market. This is a critical improvement: We will be able to monitor all players to make sure they abide by federal consumer financial laws."

In early January, the CFPB got the green light to start regulating nonbank firms, including servicers, payday lenders, consumer reporting agencies and debt collection companies. The CFPB, at the time, said it's still in the process of drafting a final proposed rule to oversee nonbank financial firms.


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