Mortgage Lending – Page 8 – Consumer Financial Services Watch

Uniform State Test – This Is Not a Joke

Apr 01 2013

By: Costas A. Avrakotos , *Jeffrey Prost , *Robin L. Gieseke
Mr. Prost and Ms. Gieseke are not admitted to the practice of law.

April Fools’ Day, a day traditionally reserved for pranks, trickery, and funny escapades, is upon us.

All joking aside, on this April 1, 2013, the Conference of State Bank Supervisors (“CSBS”) will begin to offer the new Uniform State Test (“UST”) for the licensing of state regulated mortgage loan originators (“MLOs”). Read More

CFPB Provides Guidance on Mortgage Servicing Transfers

Mar 04 2013

By: Jonathan D. Jaffe , Amanda D. Gossai

The CFPB recently released a Bulletin directed to residential mortgage servicers and subservicers (servicers). The purpose of the Bulletin is to put servicers on notice that the CFPB intends to focus its supervisory process on mortgage loan servicing transfers. If the CFPB determines that a transferor or transferee servicer has engaged in any acts or practices that are unfair, deceptive, or abusive, or that otherwise violate federal consumer financial laws and regulations (including RESPA, FCRA, and FDCPA), the CFPB indicated its intent to take appropriate supervisory and enforcement actions and seek all appropriate corrective measures, including remediation of harm to consumers. 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Real Estate Appraisers Board advised us that the version of the proposed rules discussed in our original post are being withdrawn.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.

FHA Announces Upcoming Changes to Strengthen the Mutual Mortgage Insurance Fund

Dec 03 2012

By: Phillip L. Schulman, Krista Cooley

The U.S. Department of Housing and Urban Development’s recently announced that an independent actuarial review of the FHA Mutual Mortgage Insurance (MMI) Fund found that the Fund’s capital reserve ratio has fallen to -1.44%, which represents a negative economic value of $16.3 billion. In the wake of this announcement, HUD unveiled a series of aggressive steps it intends to take over the next several months. According to the Annual Report provided to Congress earlier this month, FHA lenders will have to contend with several policy changes to FHA origination and servicing requirements in the coming year, as well as to the Home Equity Conversion Mortgage (HECM) program. Read More

FHA and RHS Respond to Hurricane Sandy

Nov 30 2012

By: Holly Spencer Bunting , Kathryn M. Baugher

In the wake of Hurricane Sandy, both the U.S. Department of Housing and Urban Development (“HUD”) and the Rural Housing Service (“RHS”) have issued guidance intended to help homeowners with government insured or guaranteed loans who were affected by the storm. With regard to loans insured by the Federal Housing Administration (“FHA”), the guidance is a combination of reminders about existing relief or insurance programs available to assist disaster victims and new policies designed to aid borrowers in the process of obtaining FHA financing for properties impacted by natural disasters. With regard to RHS-guaranteed loans, the guidance focuses on foreclosure and loss mitigation relief available to borrowers impacted by Hurricane Sandy. Read More

FHA Issues Annual Financial Report to Congress

Nov 27 2012

By: Phillip L. Schulman, Krista Cooley

On Friday, November 16, 2012, the U.S. Department of Housing and Urban Development released its 2012 Annual Report to Congress and announced that the FHA Mutual Mortgage Insurance (MMI) Fund suffered a $16.3 billion deficit. In addition, for the fourth year in a row, the MMI Fund has failed to meet its 2% statutory reserve amount, an amount required under the National Housing Act to be held back to cover excess loss.

CFPB’s Proposed Rule on Receiving a Copy of Your Appraisal and Valuation

Oct 10 2012

By: Nanci L. Weissgold, Kerri M. Smith

Although Congress mandated the sunset of the Home Valuation Code of Conduct (HVCC) in the Dodd-Frank Act, Congress effectively codified many of its requirements, including the obligation to furnish a copy of an appraisal to borrowers. To implement this statutory change to ECOA, the CFPB proposes to amend Regulation B to make the furnishing of “any and all written appraisals and valuations” developed in connection with the application for a first-lien loan mandatory, rather than at the consumer’s request. Comments to the ECOA proposed rule are due on October 15, 2012.

CFPB Proposes Regulations to Combine RESPA and TILA Mortgage Disclosures: Buckle Up for the Long-Anticipated Ride

Jul 17 2012

By: Holly Spencer Bunting

In one of the most anticipated actions of the Consumer Financial Protection Bureau’s “Know Before You Owe” campaign, on July 9, 2012, the CFPB published 1,099 pages of a proposed regulation to combine mortgage disclosure forms required under the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”). As the Dodd-Frank Wall Street Reform and Consumer Protection Act charged the CFPB with creating combined disclosure forms and proposing regulations implementing such forms by July 21, 2012, the Bureau met that deadline with a few weeks to spare. Now mortgage companies, title insurance and settlement agents, real estate brokers, and all other interested parties are digging in to the proposed regulations in an attempt to understand how the Bureau’s proposed changes could impact their businesses. Industry participants should have plenty of time to digest the proposed regulations; public comments on the proposed changes to the calculation of the finance charge are due on September 7, 2012, while all other comments on the proposed combined disclosures are due on November 6, 2012. Read More

Supreme Court’s No Decision is a Decision in First American v. Edwards

Jun 29 2012

By: Phillip L. Schulman, Emily J. Booth

Must a consumer suffer actual harm to sue the settlement service providers involved in his or her real estate mortgage transaction for engaging in activities that violate the Real Estate Settlement Procedures Act (RESPA), or is the mere allegation of a statutory violation sufficient to get the consumer into court? The U.S. Supreme Court’s decision in First American v. Edwards not to consider the standing issue under RESPA leaves the settlement service industry at the mercy of the lower courts and effectively invites private plaintiffs to sue settlement service providers under RESPA whenever a statutory violation is suspected regardless of whether any harm has resulted. Read More

DOJ Doubles Down on Disparate Impact, Settles Discriminatory Pricing Case with SunTrust Mortgage

Jun 07 2012

By: Melanie Hibbs Brody, David G. McDonough, Jr.

The Department of Justice recently announced a $21 million settlement with SunTrust Mortgage over allegations that SunTrust’s neutral and non-discriminatory policy of granting loan originators discretionary pricing authority somehow resulted in loans to minority borrowers to be priced higher than loans to White borrowers. DOJ based its case on the disparate impact theory of discrimination; as such, the Department did not allege that SunTrust treated minority borrowers in a disparate or discriminatory manner. Instead, the case follows DOJ’s practice of filing fair lending cases solely on statistical analyses of loan data and without alleging that any person treated a borrower differently because of race or ethnicity. Read More

Catagory:Mortgage Lending