The Community Home Lenders of America (CHLA) sent a letter on Thursday to the Consumer Financial Protection Bureau (CFPB) that urges the agency to adopt and implement a series of rules to protect homebuyers from so-called “dual compensation” arrangements during the homebuying process.
The Community Lenders of America is calling for indemnification rather than forcing agency sellers to repurchase loans. Those mortgage bankers have had to sell these in the scratch-and-dent market at steep discounts at a time when the GSEs have increased the share of loans they review for manufacturing errors.
The Community Home Lenders of America (CHLA) said due to the rapid rise in interest rates over the past year, “our consensus member conclusion is that the average loss to the lender is now 30% on every loan repurchase.”
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