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The percentage of foreclosed mortgages has reached its lowest point in nine years, according to Black Knight Financial Services' September First Look report, NationalMortgageNews.com reported. The presale foreclosure rate of 1 percent represents a 3.38 percent decline from August and a 31.23 percent year-over-year decline. There are 509,000 homes in the presale inventory, down 18,000 from the previous month and 228,000 from last September. There were 61,700 foreclosure starts for the month, a 10.32 percent reduction from the previous month and a drop of 22.78 percent from September 2015. There are 2.17 million properties that are more than 30 days late but not in foreclosure as of Sept. 30, an increase of 14,000, but down by 292,000 from one year ago.

The mortgage-servicing industry is still struggling to adopt technology that will help them comply with a 2014 Consumer Financial Protection Bureau regulation that placed new rules on the sector, MorningConsult.com reported yesterday. “While we applaud the investments made in compliance by certain servicers, others have not yet made satisfactory progress,” CFPB Director Richard Cordray told this year’s annual conference of the Mortgage Bankers Association in Boston, according to prepared remarks. “Outdated and deficient servicing technology continues to put many consumers at risk. This problem is made worse by a lack of training to use their technology effectively.” The 2014 CFPB rule required mortgage servicers to quickly correct errors reported by consumers and gave extra protection to borrowers in distress or facing foreclosure. Cordray said that the CFPB will try to address the problems he listed by demanding the firms having trouble with compliance work with the agency on “specific and credible plans” listing changes to information technology systems that will help firms with implementation. He also said the bureau will work more closely with the industry when crafting updates to the mortgage-servicing rule that are slated to go into effect in 2017.

The rate of online card fraud is rising sharply as a growing number of purchases take place on the Internet while brick-and-mortar merchants race to lock down vulnerabilities in the checkout line, the Wall Street Journal reported today. This is prompting new steps to try to curb the threat: The credit card industry is expected to announce a plan to encourage online merchants to provide card issuers with more detailed customer information that could be used to catch fraudulent purchases. More than 7.5 percent of online merchants’ revenue is eaten up by the cost of actual fraud and costs that are associated with fraud-prevention tools, according to a survey to be released today by Javelin Strategy & Research, a consulting firm that specializes in the payments industry. Aite Group LLC, another consulting firm, estimated in May that so-called card-not-present fraud will rise to $4 billion this year from $3.2 billion in 2015. It expects that figure to jump to $7.2 billion in 2020.

As a former employee who had blown the whistle on ITT, an operator of some 140 for-profit schools, Dan Graves was happy that the government had finally taken action to protect students from the company’s aggressive sales tactics, which lured them into debilitating debt and provided little in the way of an education, the New York Times reported on Saturday. Still, he wondered what had taken the government so long. After all, it has been 17 years since Graves and another former ITT employee brought a suit alleging that the company had systematically violated the law governing compensation of sales representatives. The two former employees shared extensive documentation with federal prosecutors and regulators. These officials expressed keen interest, Graves said, and estimated that the government could recover $400 million in damages from the case. But by 2004, the lawsuit was dead and Graves’s effort to provide the government with damning evidence had come to naught. Now that ITT is in bankruptcy, Graves’s whistle-blower experience is instructive: It spotlights a costly regulatory failure that allowed ITT to stay in business far longer than it otherwise might have, Graves said.

A court decision to make the Consumer Financial Protection Bureau’s director report to the president means that the statutorily independent agency must follow executive orders, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) argued, MorningConsult.com reported yesterday. The U.S. Court of Appeals for the D.C. Circuit’s recent decision means that the CFPB “is not, and may no longer be considered to be, an independent regulatory agency,” Hensarling wrote in a letter to CFPB Director Richard Cordray. “Consequently, it is also clear that executive orders applicable to executive agencies apply in full to the CFPB,” Hensarling said. On Oct. 11, the appeals court struck down elements of the CFPB’s current governance structure as unconstitutional. Under the 2010 Dodd-Frank Act, the CFPB was created as an independent agency, and the president originally could only dismiss the agency’s director for cause. The court ruling lifted that limitation, saying that it gave the director too much power. Hensarling pointed to four executive orders that President Obama and former President Clinton signed that should now impact the CFPB’s rulemaking process in light of the decision. These orders require executive agencies to conduct cost-benefit analyses of new regulations and report on their consultations with state, local, and tribal governments.

A lawsuit in North Dakota federal district court could provide an early test of the reach of a federal appeals court decision that confronted what the judges called the “massive, unchecked power” of the Consumer Financial Protection Bureau, the National Law Journal reported today. In June, the CFPB sued payment processor Intercept Corp., alleging that the company and two of its executives allowed clients to make unauthorized and illegal withdrawals from consumers’ accounts. The CFPB’s complaint in U.S. District Court for North Dakota alleged that Intercept ignored red flags — such as warnings from banks and complaints from consumers — and “knew or consciously avoided knowing that many of the transactions initiated by those companies were fraudulent or illegal.” Lawyers for Intercept seized on a Washington federal appeals court ruling last week that struck down as unconstitutional the structure of the CFPB. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled that too much power was vested in the CFPB’s director, Richard Cordray, whom Judge Brett Kavanaugh described as “the single most powerful official in the entire U.S. government, other than the president.” The D.C. Circuit decision wiped out a $109 million fine against the mortgage loan provider PHH Corp. and cost Cordray some measure of job security. The appeals court said the president could remove the agency’s director at will rather than only “for cause.” The appeals panel expressly declined to address whether its ruling would affect earlier CFPB enforcement actions. The court sent the PHH case back to the agency for further review. Intercept’s defense team alerted the North Dakota court to the D.C. Circuit action in the hope the local judge finds it persuasive and dismisses the CFPB’s case. The ruling in Washington does not dictate the outcome in North Dakota.

Student-loan borrower woes are spilling over into the bond market as an increasing share of federal student-loan borrowers are entering into repayment plans that allow them to make smaller payments than they actually owe on the loans, according to new data out Friday, the Wall Street Journal reported yesterday. Some of these plans allow borrowers to make no payments. The trend has become an area of concern for a pool of federal loans that were originated by banks and other private lenders until 2010. Borrowers are still paying down these loans, and nearly $159 billion of them back bonds, according to the data from research firm MeasureOne.

A federal program meant to help the most distressed Americans struggling with their student loans all too often fails them, a top official at the Consumer Financial Protection Bureau said, Bloomberg News reported yesterday. Efforts by the Obama administration to improve the treatment of Americans in default on their student debt have been inadequate, according to a report by Seth Frotman, the CFPB’s student loan ombudsman. He suggested that policymakers scrap parts of the current system, in which federal contractors make immense profits for debt collection practices that neither return enough money to taxpayers nor provide enough help to troubled borrowers, and start anew. Frotman’s warning adds to a growing list of worries plaguing the federal student loan system, in which more than 41 million Americans collectively owe nearly $1.3 trillion.