February 2013 – Consumer Financial Services Watch

App Lets Users File Discrimination Complaints from Mobile Device

Feb 28 2013

In an effort to reach more consumers, HUD’s Office of Fair Housing and Equal Opportunity launched a new mobile app for iPhone and iPad today. The app gives users instant access to HUD’s online housing discrimination complaint form and information about fair housing rights. After downloading the app, consumers and fair housing advocacy groups will have what HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña called “faster and easier” access to the complaint form. This makes sense for repeat complainants like fair housing advocacy organizations. But for the average consumer looking to file a discrimination complaint, downloading an app rather than visiting HUD’s web site seems like an unnecessary extra step. In any case, the app is a valiant attempt by HUD to follow the CFPB’s lead in maximizing technology to reach out to consumers.

Massachusetts Attorney General Issues Guidance on Debt Collection Regulations

Feb 21 2013

By: Nanci L. Weissgold , Sean P. Mahoney , Gregory N. Blase

On January 24, 2013, the Massachusetts Office of the Attorney General (“AG”) issued guidance to the industry interpreting its debt collection regulations (“Regulations”) that became effective March 2, 2012. The AG took this unusual step as it recognized that the Regulations raise unique compliance issues for servicers of consumer debt. The AG promulgated the Regulations pursuant to the rulemaking authority conferred by the Massachusetts Consumer Protection Act (“Chapter 93A”), “to establish standards, by defining unfair or deceptive acts or practices, for the collection of debts from persons within the Commonwealth of Massachusetts.” 940 C.M.R. 7.01. Although there is no private right of action, a violation may, nevertheless, constitute “an unfair or deceptive act or practice under Chapter 93A.”

New Cybersecurity Executive Order to Impact Financial Services Sector

Feb 19 2013

By: David A. Tallman , Michael A. Cumming

On February 12, 2013, President Obama signed an executive order (“Order”) aimed at enhancing the cybersecurity of the nation’s “critical infrastructure” (generally defined as those “systems and assets” whose incapacity “would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters”). An accompanying policy directive designates the financial services sector as one of sixteen “critical infrastructure sectors” and, among other things, directs the Commerce Department’s National Institute of Standards and Technology (“NIST”) to collaborate with industry representatives in order to create a voluntary “cybersecurity framework.” The framework must be “technology neutral” and focused on “cross-sector security standards and guidelines applicable to critical infrastructure.” Read More

Proposed Massachusetts Regulations Address Mandatory Modification Review

Feb 12 2013

By: Gregory N. Blase , Nanci L. Weissgold , Kerri M. Smith

Do regulations recently proposed by the Massachusetts Division of Banks disregard servicers’ duties under servicing agreements when considering borrowers for a modification under the Commonwealth’s new mandatory modification review statute? Read More

Ginnie Mae Goes Electric

Feb 05 2013

By: Phillip L. Schulman , *Nathan Pysno
*Mr. Pysno is not admitted to the D.C. Bar; currently admitted to the Maryland Bar.

Beginning January 1, 2013, issuers of Government National Mortgage Association (“Ginnie Mae”) mortgage-backed securities must submit their insurance and annual audited financial statements electronically. From June 1, 2012 through December 31, 2012, issuers had the option to submit their documents electronically or by mail in paper form. Before June 1, 2012, Ginnie Mae only accepted submissions in paper form. Documents that must be submitted electronically include annual audited financial statements, including required supplemental reports, fidelity bond insurance renewal forms, and errors and omissions insurance renewal forms.

Additional information on filing procedures, file-naming formats, and other instructions is available in Ginnie Mae’s Mortgage-Backed Securities Guide 5500.3 Rev. 1, Appendix VI-20 and in All Participant Memorandum (APM) 12-09: Electronic Submission of Issuers’ Insurance and Annual Audited Financial Documents. Both of these documents are available on the Issuer Resources page of Ginnie Mae’s website.

FHA Investing Mortgagees No Longer Required to Provide Compliance Report

Feb 05 2013

By: Phillip L. Schulman, *Nathan Pysno
*Mr. Pysno is not admitted to the D.C. Bar; currently admitted to the Maryland Bar.

A recent change to the HUD Office of the Inspector General Audit Guide has removed the requirement that all FHA investing mortgagees submit reports on internal controls and compliance.

An investing mortgagee or lender may purchase, sell, and hold FHA-insured mortgages but cannot originate or fund FHA loans. An investing mortgagee may service FHA loans with approval of the HUD Secretary. Read More

Appraisers’ Customary and Reasonable Fees – Louisiana’s Power Grab

Feb 04 2013

By: Nanci L. Weissgold , Morey Barnes Yost , *Christopher Smith
*Mr. Smith is a law clerk, currently admitted to the New York Bar.

Author’s Note: In response to the publication of the below post, a representative for the Louisiana Real Estate Appraisers Board advised us that the version of the proposed rules discussed in our original post are being withdrawn. A revised version of the proposed rules, based on comments received from appraisal management companies in response to the Board’s original proposal, is scheduled for publication in the Louisiana Register on or about February 20. We will update our analysis after the revised proposed rules are published, when they will be open for further comment.

A recently proposed Louisiana Real Estate Appraisers Board (“Board”) rule has created uncertainty in the Louisiana appraisal market regarding appraiser compensation. In proposing a rule that creates obligations inconsistent with those existing under federal law and rules, the Board has ignored the intent of the federal rule, caused conflict between state and federal law, and likely increased compliance costs for appraisal management companies (“AMCs”) – costs that may be passed along to lenders and consumers.

Archive:February 2013