Monday Morning Cup of Coffee: CFPB probe widens
A look at stories across HousingWire's weekend desk, with more coverage to come on bigger issues:
The Consumer Financial Protection Bureau is investigating whether firms such as American International Group (AIG) and Genworth Financial Inc. (GNW) violated real-estate law, a series of recent filings suggests, according to news reports.
Newspapers and wire services covered the apparently broadening probe over the weekend. AIG disclosed the investigation in regulatory papers filed on Friday.
New Jersey-based PHH Corp. disclosed in a corporate filing in January that the CFPB was investigating its mortgage-insurance practices, The Wall Street Journal said in its story about the probe. It is now clear that the bureau's probe goes beyond PHH.
AIG disclosed that the CFPB in June issued subpoenas to its subsidiary United Guaranty Corp. and other mortgage companies to obtain documents and answers to written questions. See Bloomberg's article on the probe here.
Ed DeMarco, acting director of the Federal Housing Finance Agency, continued to take heat over the weekend for his refusal to allow principal foregiveness on loans held by Fannie Mae and Freddie Mac.
On Friday, House Minority Leader Nancy Pelosi, D-Calif., broke her silence on DeMarco's resistance to principal forgiveness, accusing the nation's top housing regulator of threatening to sink the very housing market he's entrusted to protect, according to The Hill. Others also had their say late last week.
DeMarco supports lowering monthly payments without principal forgiveness to help homeowners while protecting taxpayers. If Congress wants principal reduction on GSE loans, they need only to vote for it, DeMarco said.
Consumer credit figures are due to be released on Tuesday. Outstanding consumer credit jumped $17.1 billion in May for the largest increase since the $19.1 billion boost seen in November 2011, according to market consensus reported by Econoday. Gains for the latest month were seen in both revolving and nonrevolving credit. Nonrevolving credit, which is being driven higher by strong demand for student loans, rose $9.1 billion. Auto loans also played a supporting role.
On Thursday, RealtyTrac will release its foreclosure market report for July. The report takes a look at foreclosure activity across the nation. Industry executives will be looking to see whether the foreclosure logjam in judicial states continues to ease.
One bank failed over the weekend. The Illinois Department of Financial and Professional Regulation closed Waukegan Savings Bank in Waukegan, Ill., and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC entered into a purchase and assumption agreement with First Midwest Bank of Itasca, Ill., to buy the failed bank's assets and assume its deposits.
The two branches of Waukegan Savings Bank will reopen during normal business hours Monday as branches of First Midwest Bank.
The FDIC estimates the cost to the Deposit Insurance Fund at $19.8 million. The bank is the 40th FDIC-insured institution to fail this year, and the sixth in Illinois.