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Well individual loan originators are officially not off limits to the CFPB.  They’ve just fined an individual LO for over $80k (which seems to be their favorite number).  We would say that their intent to send a strong message to the loan originators our there has been received loud and clear.



additional comments on
"CFPB Crushes Individual LO"

  1. Joe Johnson says:

    …yawn…just a suggestion, but it just might work….obey the law, and you'll probably be OK. I know this is a concept that the mortgage industry just can't wrap their mind around, but what the hey, give it a shot and see how it works.

  2. Joe, not sure what industry you work in being an "owner at self-employed", but having a large, Federal agency push thousands of pages of rules and regulations down your throat with the clarity and specificity of a puddle of mud on exactly what is or what is not compliant; or what is left "open to the interpretation of the CFPB" for the benefit of them in a courtroom, makes going to work every day rather challenging. Contrary to popular belief, not everyone in the mortgage industry is a criminal, or just looking out for their own, self-serving interest. Some of us actually care about our clients and truly enjoy helping people achieve the American dream of homeownership. I also wonder if whatever it is that you do requires fingerprinting and review by the Feds every three years to be able to continue to operate in your business, along with an annual review of your credit report and bill-paying habits just to make sure that you are "granted permission" to be able to go to work. Almost on a daily basis, we are actually scared to just try and do our job, not sure if something we might do to help a client is actually a Federal violation, buried somewhere around page 43,257 in the Dodd-Frank Bill. On behalf of all the good guys and gals in this business, I resent your reply and implication. While the rest of "today's story" needs to come to light to know whether this case is legitimate or not, your reply does nothing but validate the unfortunate stereotype our industry lives within.

  3. Rob Aubrey says:

    If I wanted biased opiniated news without all the facts, I could turn on the TV.

  4. Bernie says:

    You guys have cahonies….You guys have zero fear of the CFPB and watch them come after you both. These people at the CFPB make the IRS look like puppies. I like you guys and you call it like you see it. Kind of the Donald Trumps of our industry. I love it love it love. Thank you for doing what you do everyday. Save travels Brian.

  5. W.T. says:

    This might be a good thing? Lets remember the loan officers went along with the whole economy crash since they had no guidelines and took advantage with doing the consumers wrong to begin with trying to get higher commissions and convincing consumers to get different types of loans that benefited the LO more then the consumer. So, why do L/O’s think they should get any special relief with no punishment that the major banks as a whole got? They are a team just like any other corporation and private business. Either way you slice it, the L/O’s knew what they were doing and got GREEDY!

    1. Joseph Sule says:

      WT, you are echoing the sound-bites that have allowed the Feds to ignore the real CROOKS and scapegoat the industry that had no more bad players per capita than any other industry in our country, in the first place. Those sound-bites could not have been more ingeniously conceived for deflecting attention away from the folks who should truly been the focus of the problem. The truth is that I have witnessed worse crooks in our government, police departments, and even the Priesthood, than the worst mortgage brokers! The problem was with the folks who produced the hurtful products, incentified their selling to lure the less conscientious among us to deliver them, and then lied about what they were to investors — that’s called DEFRAUDING — and are still at large today. And what is worse is that their damage has been amplified endlessly since then by the huge money-wasting, no-value-added paperwork and requirements they have added to the part of the origination process that was never even part of the problem in the first place!!! Your sentiments are music to the ears of the real crooks!

  6. … but it is impossible to prosecute the bankers who actually CAUSED the meltdown. Right.

  7. Lisa Miller-Hobbs says:

    Having been current victim of Wells Fargo chicanery when it comes to loan modifications, and having them create false documents to try to cover their asses at the daily operations level, I’m not so sure that the CFPB isn’t correct in taking action against individual employees. In regards to your video today, you state that you don’t know all of the facts. How about the fact, that the CFPB contacts the accused and gives them the option to refute the accusers’ claim. It might have been difficult for said loan originator do to so considering that he was fired from Wells Fargo and would not have access to documents needed to clear himself. It could be that Wells Fargo used him as a scapegoat and fired him based upon what was company policy at the time in order to avoid more bad publicity for themselves. It could be that he was guilty of undercharging some clients and overcharging others for the same services, which would be discriminatory lending practices under the law. For the CFPB to take this drastic of an action, there had to be a paper trail of some kind that proved there were some illegal dealings in his transactions. Of course, he, an individual loan officer employed by Wells Fargo wouldn’t have been in a position to contract with the escrow firm for lower over-all fees to be charged for his clients based upon volume; that would have had to come from a Wells Fargo management team member authorized to create contracts between Wells Fargo and a third party vendor. So, sorry, but I’m not buying the overall story. This looks more to me like Mr. Individual Loan Officer was a sacrificial lamb that Wells Fargo thru to the CFPB in order to avoid another national incident of lender discrimination and banking fraud.

  8. Ed Schieber says:

    It's interesting to me that nobody is upset that the CFPB is an illegal entity. They are not accountable to congress, the judiciary nor the executive branch and that means that they are an unconstitutional entity. Why is this acceptable? Are we really just a bunch of sheep being lead around by a bunch crack pots?

  9. If only more people would get upset over this Ed!!!

  10. How did the CFPB come to be again…? Aren't they jerk-bastards of the FED who have become worse than the baby-daddy? The CFPB need their ass[ests] kicked-in. They're nuthin but bullies whose turn is just around the corner. I would love to hear you guys cover that story. hope, hope, hope.

  11. Paul Krause says:

    There are plenty of us who are upset. We need to make the difference in the election in November. Only one cadidate wants to eliminate Dodd-Frank, and it's not Hillary.

  12. Paul Krause says:

    Such a funny man. You haven't heard his side of the story, so commenting like that is disingenuous at best.

  13. hard to believe there is an agency out there that makes the IRS look warm and friendly. I hope this gentleman goes to his representative and to his congressman and since his side of the story. The CFPB needs to be eliminated

  14. Dora Griffin says:

    A couple of thoughts. First, why don't we just get rid of the cfpb and let the states handle enforcement. Secondly, why did this dude think it was ok to give SOME of his clients a break. We can't give anyone better treatment. Yes, it is a loss for the consumer who can't negotiate a better deal without breaking the law. Lastly, wish I had $85,000 to pay a fine.

  15. Paul Krause No jokes in this one. Even if The Boys are right, the LO was clearly breaking the rules. Just like you can't credit your borrower from your income for ANY costs in the transaction, you can't adjust the fees to suite each client, even third part fees, unless you do it for all, such as with a 'bundled rate' agreement with a escrow/title company. Those are cleaerly legal under all the rules: each client pays the same fees. In AZ every ttitle/escrow company offers discounted bundled rates for refinance transactions. They are set one year at a time and you sign an agreement. The kink is they apply to every refinance you send them – no 'reduce the escrow fee on this one'. So no matter the circumstance here, this LO broke the rules you and everyone else has to follow. He's fortunate the cost is only $85,000.

  16. Paul Krause says:

    Bob Gillespie You don't know this for sure. He just can't tell his side of the story without spending a pile of money. The CFPB is pure B.S.!

  17. Paul Krause says:

    “Dodd-Frank stands as a monument to the arrogance and hubris of man in that its answer to incomprehensible complexity and government control is even more incomprehensible complexity and government control,” Hensarling said.

    “It is a modern day Tower of Babel. 2,300 plus pages. 400 new regulations spawning tens of thousands of pages of red tape,” Hensarling continued. “And its foundation very much rests on a false premise: that somehow deregulation was the root cause of the crisis. But it was not deregulation. In fact, in the decade leading up to the financial crisis, regulatory restrictions in the financial sector actually increased. It was not deregulation but it was dumb regulation.”

    According to Hensarling, the “dumbest” regulation of all was the affordable housing goals of Fannie Mae and Freddie Mac, which “incented, cajoled, and mandated financial institutions loan money to people to buy homes that they could not afford to keep.”

    And now, instead of “promoting financial stability” as Dodd-Frank was designed to do, it has failed, Hensarling said.

  18. Joseph Sule says:

    It's great that the Feds have been able to take one of the most concientiously law-abiding citizens like myself, living that way for my entire 57 years, and have managed to make me sound like a conspiracy spouting looney while talking about the insane miss-management of the true issues at play during the "mortgage crisis" and the aftermath. They have played right into the hands of the banking lobby while lambasting us brokers and ignoring the real crooks. They had most of the problem "fixed" when they banned certain kinds of loans, and made us register to do our jobs. Since then they have played further into the banking lobby's agenda of driving up interest rates and curtailing competition, either unwittingly, or deliberately. Fixed rate loans were never a significant part of the crisis, yet originating them has quarupled in man-hours because of the useless measures they keep adding to the process. They are causing Billions of Dollars of unneeded damages to consumers instead of helping anybody. They have added tebs if billions to the cost of originating loans with all of the punitive measures they added to steps of the process that weren't even a problem. Look further at the tens of thousands of homeowners they've hurt by the poor appraisal results they sanctioned when they took all accountability away from appraisers? Allowing agencies to violate our most basic constitutional rights of due-process is another example of their going too far. And I agree with Matt, that "Joe Johnson" doesn't sound like he knows what he is talking about with his daft response our government "unreasonably" denying us our constitutional right to due-process. –The Real "Joe"–

  19. In the scheme of "crimes committed"… This seems trivial and insignificant… its too bad they can't seem to catch any of the real bad guys?

  20. Paul Krause true that!!!

  21. Based on this settlement, it sounds like the CFPB would also severly frown upon lenders that allow their loan officers to just make an average of $XXXX on a transaction. Meaning, the LO can decide to make less money for the company on a deal to make sure they get the deal. Then, said LO would just make up more money on the next borrower.

  22. From what I hear Wells Fargo did nothing to helop, and in fact hindered this LO's case. Anyone that doesnt think our industry needs to be regulated, go back to 2008.

  23. Bryan Buck says:

    Not to mention an unconstitutionally appointed director.

  24. Geoff Dorney says:

    Shame. Federal government throws its massive weight and resources behind the prosecution of an individual residential loan officer, but couldn't seem to find a single banker or trader in the securities or banking industry, to pursue for darn near taking down the entire world economy. As Matt said, every single individual in the mortgage industry goes through an annual FBI criminal background check, an annual 3 bureau credit report check, and a tri-annual fingerprinting. I would line up every single person I have ever interacted with in the mortgage industry against every single individual in any other industry on the planet, one by one, and bet on the mortgage professional's character every single time and twice on Sunday. Joe, what business are you in? Do you and your fellow industry participants have to submit to an annual criminal background check and credit check? I sincerely hope, Joe, that you didn't disparage hundreds of thousands of honest and hard-working individuals in one fell swoop, with an ax to grind or hidden agenda. That would be just as big a shame.

  25. Johnny Appleseed says:

    I agree that more information is needed for this. I can attest that many of the rules put forth have a very solid grey area, and it seems that a default these days is to find a way to make it look like they are doing their job (CFPB). As an example, we contacted a representative about the rule of “Can Shop/Did Shop” on the LE. Officially, if the title company is on the SSPL, it is “Can Shop”. But if the person switches to a title company you have listed on the SSPL (from one that is not) – it’s still “can shop”. So if you mark it as such – you have to cure it all. Upon explaining that, no one had an answer. So you run the risk of curing something large without needing to – or waiting for the CFPB to come in and see how they want to interpret it. In reference to the guy in the video – you could easily state that we “over charged” because it is technically a cure. Very frustrating bunch.

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