Bureau of Consumer Financial Protection (CFPB) – Page 19

U.S. Supreme Court Ends the RESPA Section 8(b) Debate: It Takes Two to Tango

May 25 2012

By: Holly Spencer Bunting, Phillip L. Schulman

The split in the federal Circuit Courts over the interpretation of Section 8(b) of RESPA has been resolved, and the result is that it takes two to tango for a Section 8(b) violation. In a decision made on May 24, 2012 in Freeman v. Quicken Loans, Inc., the U.S. Supreme Court held that a charge for settlement services must be divided between two or more persons to constitute a violation of Section 8(b). This is welcome news for settlement service providers, who can rest assured that their own prices, whether as part of a mark-up of a third-party fee or their own unilateral charges, cannot violate Section 8(b) of RESPA. Read More

CFPB Proposes Strict Controls on Discount Points, Origination Fees, and Broker Compensation

May 16 2012

By: Kris D. Kully

The Consumer Financial Protection Bureau (CFPB) is considering putting strict limits on a creditor’s ability to price its mortgage loans, and on a consumer’s ability to choose among pricing options.

By way of implementing the far-reaching provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is proposing to require that when a creditor pays a mortgage loan originator’s compensation (which includes most mortgage loan transactions), any up-front amounts the consumer pays for the loan must be in the form of bona fide discount points that reduce the interest rate or a flat origination fee that does not vary with the loan amount.

Force-Placed Insurance Standards in the Global Foreclosure Settlement

Apr 20 2012

By: Steven M. Kaplan, Rebecca Lobenherz

Force-placing insurance could be a hazardous practice if not done appropriately. The Consumer Financial Protection Bureau (“CFPB”) has made force-placed insurance a main focus of its desired mortgage servicing reforms and new rules on the issue are expected to be released by the CFPB as soon as this week. This is in addition to high-profile investigations into force-placed insurance by New York and California. Therefore, it should be no surprise that a significant section of the March 2012 Global Foreclosure Settlement lays out new force-placed insurance standards for parties to the settlement agreement. Read More

CFPB Issues First “Bulletin” Regarding TILA’s Loan Originator Compensation Rule

Apr 10 2012

By: Jonathan D. Jaffe

The CFPB issued its first pronouncement—which it refers to as a Bulletin—regarding the Truth in Lending Act’s (“TILA”) loan originator compensation rule (the “LO Comp Rule”). The Bulletin is noteworthy for at least two reasons: the CFPB took a practical approach to resolve the issue, and the CFPB announced that it anticipates issuing a proposed rule for public comment in the near future on the loan origination provisions in the Dodd-Frank Act. Read More

Protecting the Protectors – the Global Settlement Agreements’ SCRA Provisions

Apr 03 2012

By: Jonathan D. Jaffe

Given the reported violations of the provisions of the Servicemembers Civil Relief Act (“SCRA”) by some servicers, and the attendant enforcement and civil actions against those servicers, state and federal regulators clearly felt compelled to impose significant SCRA-related requirements on the nation’s five largest residential mortgage loan servicers (the “Servicers”) in the recent global settlement agreements (the “Agreements”) entered into between those regulators and Servicers, described here. Read More

BIGGER! BOLDER! BETTER? The NMLS Expands to License More Consumer Financial Services – Mortgage Finance Licensees Will Need to Amend Their Account Records

Apr 03 2012

By: Costas A. Avrakotos

The idea was first floated, then floundered, moved forward with few fans and fleeting fanfare, secured a firm foothold, found a favorable following, was force-fed by federal law, and now four years since its formation, it is poised to forever change the way that consumer financial services will be licensed and regulated by the states. Beginning next month, the Nationwide Mortgage Licensing System (the “NMLS” or the “System”) will go through a metamorphosis, and eventually emerge as the System through which most, if not all, state licenses for consumer financial services will be applied for, processed and renewed.

To view the complete alert online, click here.

Joining the Conversation: The Perils and Possibilities of Social Media for Financial Services Companies

Mar 28 2012

By: David A. Tallman, Lori L. Schneider

As consumers integrate the Internet and social media into their daily lives, they not only expect financial institutions to maintain an active online presence, but increasingly demand to receive financial products and services over the Internet and on mobile devices. The rise of online interactivity offers financial institutions unprecedented opportunities to foster customer loyalty, expand brand awareness, educate their clients or potential clients and market products and services. But at the same time, the use of social media in such a highly regulated industry raises a host of unique – and often unanticipated – risks and responsibilities that courts, regulators, and financial institutions have only just begun to address.

To view details and register for the webinar, click here.

Global Servicing Settlement Requires Single Points of Contact (“SPOCs”)

By: Kristie D. Kully

The servicing standards imposed on the five largest mortgage loan servicers by the recent global settlement agreement with state and federal regulators, described here, continue to pile on the “SPOC” requirements. “SPOC” stands for a single point of contact – a knowledgeable and accessible person a troubled borrower may contact to receive information and assistance in the loss mitigation, loan modification, and foreclosure process. SPOCs may do little to resolve the foreclosure documentation irregularities that sparked state and federal regulators to initiate their investigation. However, they have been touted as key to the efforts for national servicing standards, and are an inevitable adjunct to the global settlement agreement.

Global Foreclosure Settlement: The Success of Herding Cats

Mar 12 2012

By: Laurence E. Platt, Michael J. Missal

Whether one thinks the terms of the historic federal-state civil loan servicing settlement are too much, too little or about right, two conclusions are indisputable. First, an incredible amount of good faith effort from all concerned contributed to the final settlement—simply synchronizing the differing interests of the various governmental and private parties in over a year of negotiations seemed to require a computer program. Second, while the settlement terms are likely to contribute to the future housing recovery, the federal and state governments appear intent to continue to pursue enforcement actions for prior conduct.

To view the complete alert online, click here.

K&L Gates Files Federal Pro Bono Action to Challenge Foreclosure Rescue Scheme

Mar 12 2012

By: Paul F. Hancock, Carol Elder Bruce, John L. Longstreth, Melissa S. Malpass

On March 6, 2012, K&L Gates LLP filed a federal lawsuit challenging an allegedly discriminatory and otherwise unlawful foreclosure rescue scam targeted to Hispanic homeowners in Northern Virginia. The National and Washington Lawyers’ Committees for Civil Rights are co-counsel with us in this pro bono effort.

To view the complete alert online, click here.

Catagory:Bureau of Consumer Financial Protection (CFPB)