Claimants protected under insurance overhaul

Insurers will no longer be able to refuse a claim where they have failed to ask the right questions, under government plans.

In some cases, insurers reject complaints where a consumer has not declared a fact completely irrelevant to the claim because it simply was not asked for.

The news is a massive victory for MoneySavingExpert.com and many other consumer groups.

Figures including this site's founder Martin Lewis and a director of lobby group Which? signed a letter last year urging the Government to implement Law Commission proposals to loosen rules on what consumers must declare, which are over 100 years old.

The letter cited the example of a woman denied a critical illness payout for leukaemia following a failure to declare unrelated ear infections.

Insurance application forms often only state deep in the small print that criminal convictions and unrelated medical conditions must be declared.

The Consumer Insurance (Disclosure and Representations) Bill, introduced into Parliament on this week, which contains the plans, is likely to become law in 2013.

Martin Lewis, MoneySavingExpert.com creator, says: "It's good to see the system working for once with a piece of non-contentious legislation being enacted that'll help huge numbers, even though it may not make huge headlines.

"The ridiculously antiquated insurance laws needed an urgent update as a few less scrupulous players in the insurance market have used the current laws as a get out of jail free card."

Professor Hector MacQueen, the commissioner leading the project at the Scottish Law Commission, says: "We are delighted to see this Bill introduced into Parliament. As the law stands, consumers are expected to predict what information an insurer might consider relevant.

"Under the reforms, the rights, duties and expectations of both parties are clearly established."

The Association of British Insurers, which represents insurance companies, insists most of its members already adopt less onerous disclosure requirements.

A spokesman says: "The insurance industry is committed to ensuring customers understand their rights and obligations, and have their genuine claims paid quickly. The Commission's proposals give legal status to existing best practices."

Now you must have car insurance

If you?ve got an uninsured vehicle you are breaking the law whether you drive it or not, under rules that came into force this week, unless you declare it off-road.

The Continuous Insurance Enforcement scheme makes it an offence to keep an active, uninsured vehicle. Under the previous law, you only needed insurance if you were driving.

The new law came into effect on Monday but the Government has declared an amnesty until late June during which time it will not be enforced, giving drivers the chance to get insured.

Sources close to the Government say the likely enforcement regime will begin on 20 June.

The aim of the new rule is to cut down on the number of uninsured vehicles, which currently stands at 1.4 million. It'll allow the Government to use databases to match-up owners with insured vehicles.

Cars, motorbikes and motor homes must be now continually insured. A lapse of even a few days could see you falling foul ? meaning it's no longer possible to remain uninsured while in hospital or on holiday.

If the owner fails to insure a vehicle they could be given a ?100 fine. If it remains uninsured, the vehicle could be clamped, seized or destroyed.

The law will apply in England, Scotland and Wales but not in Northern Ireland.

If you have a vehicle you do not drive, the only way to avoid paying insurance is with a valid Statutory Off Road Notice (Sorn), declaring your vehicle is not in use.

This could play into insurers' hands

This is a more efficient system to cut down on uninsured drivers ? who typically add ?30 to every motor insurance premium ? but you could end up paying far too much if you simply allow insurers to auto-renew your cover.

Instead, a few minutes' work in advance can cut costs by hundreds of pounds a year as new customers tend to get far cheaper insurance premiums.

Figures from the AA show the average car insurance premium at ?1,416, though this falls to ?892 for those who shop around before buying.

MoneySavingExpert.com creator Martin Lewis says: "Anything that cracks down on uninsured drivers is good news for motorists.

"Yet it's important any savings for insurers are passed onto customers, who've already seen 40% hikes in car insurance in the last year alone.?

"However, there is a worry that many people will simply auto-renew with their existing insurer to avoid fines ? and that allows insurers to hike prices knowing they've no competition.?

"To avoid this, everyone should diarise six weeks before their renewal is due to start the comparison process, as if you wait until your insurer reminds you it's often too late."

How do I declare a vehicle Sorn?

To do this, see the Direct.gov website.

To fulfil these requirements, your vehicle must be kept off the road.

What counts as off-road?

Typically, off-road means garages and driveways. It does not apply to simply leaving your car parked on the side of the road.

Any part of a public road, including grass verges and ground adjoining the road, is deemed on-road.

The DVLA says you should contact your local authority if you have any doubt.

Anyone who has not used their vehicle and not had it taxed since the Sorn regulations came into force in January 1998 is also exempt from buying insurance, if they don't drive the vehicle.

PPI complaints hit record high

A record number of consumers complained about mis-sold payment protection insurance (PPI) during the past financial year, despite the banks' attempt to block reclaiming.

A mammoth 104,597 consumers made a complaint to the independent Financial Ombudsman Service on PPI in the year to 31 March ? over 2,000 a week (see the PPI reclaiming guide for template letters).

That is more than double the 2009/10 figure and is the highest-ever recorded on a single product, eclipsing the previous record of 69,737 on mortgage endowments in 2004/05.

PPI ? to cover credit card or loan payments if you cannot work ? represented 51% of all claims to the Ombudsman in 2010/11, with 66% upheld, against an industry average of 51%.

As a result, the Ombudsman has become swamped by PPI complaints leading to huge backlogs meaning cases can take well over a year to resolve.

The record numbers are in spite of banks' unilateral hold on claims during their disastrous attempt to outlaw Financial Services Authority (FSA) rules that force them to proactively contact mis-selling victims.

The British Bankers' Association trade body lost its key Judicial Review last month and threw in the towel last week, when it announced it would not appeal the decision after key members, Lloyds Banking Group and Barclays, pulled out. As a result, the hold is now over.

The capitulation opens the floodgates for an estimated three million victims to reclaim a combined ?9 billion in mis-sold cover.

The Ombudsman figures only account for complaints to it, not overall protests. Before reaching the independent arbitrator, consumers must first raise their concern with the firm that sold the policy.

Close to two million have made a complaint since the FSA began regulating PPI in 2005.

Non-PPI complaints

In total, the Ombudsman handled over a million front-line enquiries and complaints from consumers ? around 4,000 each working day.

Around 1 in 5 of the initial consumer enquiries ? a record 206,121 new cases ? become a formal dispute. This is up 26% on the previous year.

There was an increase in the number of complaints about mobile phone insurance where many questioned the value of the policies sold.

Complaints about loans from smaller lenders rose considerably, as did gripes about travel and motor insurance. Meanwhile, investment complaints fell by 30% and banking complaints were down 9%.

Natalie Ceeney, chief ombudsman, says: "Aside from PPI, over the year we've seen encouraging signs of improvements in the way that some businesses are handling complaints."

Treasury: Credit Constraint Is Not Reform's Focus

Secondary and primary market representatives at an industry conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.

“The focus…is not to constrain credit,” Jeff Foster, the Treasury’s senior policy advisor-capital markets, told attendees at the Mortgage Bankers Association’s secondary market conference.

Foster said the government wants to hear industry concerns as it proceeds at a deliberate pace on big moves like GSE reform.

Tom Deutsch, executive director of the American Securitization Forum, told this publication it might be best for there not to be a rush to reform because of the pressure it could put on mortgage rates and housing. Removing the effective subsidy the agencies’ guarantee fees put on rates and adding to secondary market costs by, for example, adding loan-level transparency, means rates will inevitably rise as reform occurs, he said. This could cause housing demand to continue to decline.

“Mortgage rates will go up. There is no doubt in my mind,” Deutsche said during a panel discussion at the conference.

Government controlled mortgage giant Freddie Mac posted its first true net profit in almost two years, earning $676 million in the first quarter — even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns.

The city of Los Angeles filed a civil lawsuit Wednesday against Deutsche Bank, claiming the German bank failed to maintain foreclosed properties and illegally evicted hundreds of low-income renters.

A House Financial Services subcommittee Wednesday approved a bill that creates a five-member commission to steer the new Consumer Financial Protection Bureau instead of a single director.

Thanks to lower interest rates, mortgage applications increased 4% on a seasonally adjusted basis for the week ending April 29, according to new figures released by the Mortgage Bankers Association.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

The House Capital Markets and GSE subcommittee late Tuesday advanced a bill to create a U.S. covered bond market but major issues need to be worked out first before the measure is ready for a full committee markup.

PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.

Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.

Investigators keep finding skeletons in the closets of companies that participated in the mortgage boom. In a case the government filed against Deutsche Bank AG on Tuesday, the “closet” part is literally true.

After three consecutive months where the national commercial mortgage-backed securities delinquency rate was leveling off, the latest report from Trepp signaled the recovery is nowhere in sight.

Residential Finance Corp., Columbus, Ohio, has hired Daniel Jacobs, former 1st Metropolitan CEO, to head up its new retail branching operation, ProLending Network.

Frank Keating, the head of the American Bankers Association, late Tuesday reneged on his endorsement of Elizabeth Warren as director for the Consumer Financial Protection Bureau within hours of saying the trade group would "be fully supportive" of her nomination.

CRIF, the Italian financial services provider, this week continued its buying spree of credit union lending software companies with the acquisition of Cypress Software Systems.

MBA Declares Refi Binge Officially Laid to Rest

The surge in refinancing, now down to a virtual trickle, was officially pronounced dead and gone at the Mortgage Bankers Association's annual secondary market conference in New York.

"We've lost borrowers who have the ability (to refinance) and those who have the ability no longer have the incentive," Michael Fratantoni, the MBA's director of research and economics, told the meeting.

While the market is "close to the turnaround point" in purchase mortgage volumes, Fratantoni said, "the refi portion is essentially over."

The share of borrowers with loans at rates above 5.5% either don't have jobs, have lost too much equity or have poor credit, the MBA economist explained. Or they simply don't want to refinance for some unknown reason.

While the loss of easy loans is a blow to lenders, it is good news to servicers who are impacted by the loan runoff. But servicers also received a bit of bad news from the MBA's chief economist, Jay Brinkman, who pointed out that mortgage debt outstanding is continuing to fall. Worse, he said, the "likelihood of a turnaround is not good." And the anticipated increase in purchase volumes "may not be enough" to replace the loss.

According to data gleaned from the group's weekly applications survey, the mortgage business has settled down into a "plain vanilla market." But the pattern of refinances indicates that the composition of those loans is changing, as borrowers opt to "de-leverage" with shorter payback periods, leading to the decline in debt outstanding, Fratantoni pointed out.

Nearly 24% of those who refied went with a 15-year amortization period, and almost 12% more took loans with durations of 10 years or less.

Government controlled mortgage giant Freddie Mac posted its first true net profit in almost two years, earning $676 million in the first quarter — even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns.

The city of Los Angeles filed a civil lawsuit Wednesday against Deutsche Bank, claiming the German bank failed to maintain foreclosed properties and illegally evicted hundreds of low-income renters.

A House Financial Services subcommittee Wednesday approved a bill that creates a five-member commission to steer the new Consumer Financial Protection Bureau instead of a single director.

Thanks to lower interest rates, mortgage applications increased 4% on a seasonally adjusted basis for the week ending April 29, according to new figures released by the Mortgage Bankers Association.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

Secondary and primary market representatives at an industry conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.

The House Capital Markets and GSE subcommittee late Tuesday advanced a bill to create a U.S. covered bond market but major issues need to be worked out first before the measure is ready for a full committee markup.

PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.

Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.

Investigators keep finding skeletons in the closets of companies that participated in the mortgage boom. In a case the government filed against Deutsche Bank AG on Tuesday, the “closet” part is literally true.

After three consecutive months where the national commercial mortgage-backed securities delinquency rate was leveling off, the latest report from Trepp signaled the recovery is nowhere in sight.

Residential Finance Corp., Columbus, Ohio, has hired Daniel Jacobs, former 1st Metropolitan CEO, to head up its new retail branching operation, ProLending Network.

Frank Keating, the head of the American Bankers Association, late Tuesday reneged on his endorsement of Elizabeth Warren as director for the Consumer Financial Protection Bureau within hours of saying the trade group would "be fully supportive" of her nomination.

CRIF, the Italian financial services provider, this week continued its buying spree of credit union lending software companies with the acquisition of Cypress Software Systems.

California Lender Launches Correspondent Effort

Pacific Union Financial LLC, Walnut Creek, Calif., has launched a new correspondent division to purchase already funded residential loans from mortgage bankers, community banks, and credit unions.

In an interview with National Mortgage News, company president Evan Stone said that Pacific Union is requiring sellers to have a minimum net worth of at least $1 million and a “HUD Eagle.”

Company chief operating officer Vicki Bondi is heading the new effort.

A nonbank lender, Pacific Union originated $1 billion in home mortgages last year, with about three-fourths of that coming through the wholesale channel. “The rest came through retail,” said Stone.

With the new correspondent launch, PUF will have three channels, allowing it to compete against some of the nation’s largest funders, said Stone. “I think we can handle $100 million a month, no problem,” he added.

The company’s warehouse backers include First Tennessee Bank, among others. “Warehouse credit is not a problem these days,” said Stone.

Government controlled mortgage giant Freddie Mac posted its first true net profit in almost two years, earning $676 million in the first quarter — even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns.

The city of Los Angeles filed a civil lawsuit Wednesday against Deutsche Bank, claiming the German bank failed to maintain foreclosed properties and illegally evicted hundreds of low-income renters.

A House Financial Services subcommittee Wednesday approved a bill that creates a five-member commission to steer the new Consumer Financial Protection Bureau instead of a single director.

Thanks to lower interest rates, mortgage applications increased 4% on a seasonally adjusted basis for the week ending April 29, according to new figures released by the Mortgage Bankers Association.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

Secondary and primary market representatives at an industry conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.

The House Capital Markets and GSE subcommittee late Tuesday advanced a bill to create a U.S. covered bond market but major issues need to be worked out first before the measure is ready for a full committee markup.

PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.

Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.

Investigators keep finding skeletons in the closets of companies that participated in the mortgage boom. In a case the government filed against Deutsche Bank AG on Tuesday, the “closet” part is literally true.

After three consecutive months where the national commercial mortgage-backed securities delinquency rate was leveling off, the latest report from Trepp signaled the recovery is nowhere in sight.

Residential Finance Corp., Columbus, Ohio, has hired Daniel Jacobs, former 1st Metropolitan CEO, to head up its new retail branching operation, ProLending Network.

Frank Keating, the head of the American Bankers Association, late Tuesday reneged on his endorsement of Elizabeth Warren as director for the Consumer Financial Protection Bureau within hours of saying the trade group would "be fully supportive" of her nomination.

CRIF, the Italian financial services provider, this week continued its buying spree of credit union lending software companies with the acquisition of Cypress Software Systems.

CRIF Moves Deeper Into CU Market With Deal For Cypress Software

CRIF, the Italian financial services provider, this week continued its buying spree of credit union lending software companies with the acquisition of Cypress Software Systems.  

No purchase price was disclosed.

CRIF will add the North Richland Hills, Texas provider of loan origination systems to its growing stable of lending software, which includes the APPRO, Aimbridge, Teres, FLS and Magnum systems it acquired over the past two years. The systems are used by 650 U.S. credit unions and banks.

Cypress Software provides a variety of software and services that help credit unions and banks automate their loan application, underwriting and decisioning processes. The company serves more than 100 clients in the U.S. and 16 other countries.

“CRIF has assembled one of the most powerful suites of financial services technology available in the marketplace,” said Stephen Sargent, co-founder and president of Cypress Software. “We look forward to working with CRIF Lending Solutions to help banks, credit unions and other financial institutions succeed in this changing lending landscape.”

CRIF’s U.S. headquarters is based in Atlanta.

Government controlled mortgage giant Freddie Mac posted its first true net profit in almost two years, earning $676 million in the first quarter — even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns.

The city of Los Angeles filed a civil lawsuit Wednesday against Deutsche Bank, claiming the German bank failed to maintain foreclosed properties and illegally evicted hundreds of low-income renters.

A House Financial Services subcommittee Wednesday approved a bill that creates a five-member commission to steer the new Consumer Financial Protection Bureau instead of a single director.

Thanks to lower interest rates, mortgage applications increased 4% on a seasonally adjusted basis for the week ending April 29, according to new figures released by the Mortgage Bankers Association.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

Secondary and primary market representatives at an industry conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.

The House Capital Markets and GSE subcommittee late Tuesday advanced a bill to create a U.S. covered bond market but major issues need to be worked out first before the measure is ready for a full committee markup.

PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.

Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.

Investigators keep finding skeletons in the closets of companies that participated in the mortgage boom. In a case the government filed against Deutsche Bank AG on Tuesday, the “closet” part is literally true.

After three consecutive months where the national commercial mortgage-backed securities delinquency rate was leveling off, the latest report from Trepp signaled the recovery is nowhere in sight.

Residential Finance Corp., Columbus, Ohio, has hired Daniel Jacobs, former 1st Metropolitan CEO, to head up its new retail branching operation, ProLending Network.

Frank Keating, the head of the American Bankers Association, late Tuesday reneged on his endorsement of Elizabeth Warren as director for the Consumer Financial Protection Bureau within hours of saying the trade group would "be fully supportive" of her nomination.

Moody's Downgrades Servicing Ratings for B of A

Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.

Moody’s said it is lowering its opinion of the bank’s servicing abilities, keeping it on alert for further downgrades. (The firm cut the underlying ratings on B of A’s servicing one notch, from the top rating to the second on a five-level scale.)

The ratings refer to the ability the servicer has to mitigate losses on loans it provides for securitizations. The ratings are used by investors in securitizations, and supposedly show how effective a servicer is at preventing defaults and maximizing recoveries.

B of A is the nation’s largest servicer of home mortgages with just over $2 trillion of receivables and a market share of 21.5%, according to figures compiled by National Mortgage News and the Quarterly Data Report.

B of A was among 14 banks that signed consent orders this spring with federal banking regulators, agreeing to improve their servicing procedures, specifically in regard to delinquencies and foreclosures.

Government controlled mortgage giant Freddie Mac posted its first true net profit in almost two years, earning $676 million in the first quarter — even after paying the U.S. Treasury a $1.6 billion dividend on the preferred stock it owns.

The city of Los Angeles filed a civil lawsuit Wednesday against Deutsche Bank, claiming the German bank failed to maintain foreclosed properties and illegally evicted hundreds of low-income renters.

A House Financial Services subcommittee Wednesday approved a bill that creates a five-member commission to steer the new Consumer Financial Protection Bureau instead of a single director.

Thanks to lower interest rates, mortgage applications increased 4% on a seasonally adjusted basis for the week ending April 29, according to new figures released by the Mortgage Bankers Association.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

Secondary and primary market representatives at an industry conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.

The House Capital Markets and GSE subcommittee late Tuesday advanced a bill to create a U.S. covered bond market but major issues need to be worked out first before the measure is ready for a full committee markup.

PHH Corp., Mt. Laurel, N.J., earned $49 million in the first quarter, up from $8 million in the same period last year, driven in part by a 77% increase in mortgage closings and a $68 million pre-tax gain on the sale of 50.1% of its appraisal business to CoreLogic.

Investigators keep finding skeletons in the closets of companies that participated in the mortgage boom. In a case the government filed against Deutsche Bank AG on Tuesday, the “closet” part is literally true.

After three consecutive months where the national commercial mortgage-backed securities delinquency rate was leveling off, the latest report from Trepp signaled the recovery is nowhere in sight.

Residential Finance Corp., Columbus, Ohio, has hired Daniel Jacobs, former 1st Metropolitan CEO, to head up its new retail branching operation, ProLending Network.

Frank Keating, the head of the American Bankers Association, late Tuesday reneged on his endorsement of Elizabeth Warren as director for the Consumer Financial Protection Bureau within hours of saying the trade group would "be fully supportive" of her nomination.

CRIF, the Italian financial services provider, this week continued its buying spree of credit union lending software companies with the acquisition of Cypress Software Systems.