News and developments related to consumer financial services, litigation, and enforcement.
The Consumer Financial Services Group is pleased to share our 2013 Highlights Activities report. The report provides highlights of firm achievements, practice group events, representative matters and client publications. Please click here to view the report.
By: Krista Cooley, Kathryn M. Baugher
Out with the old, in with the “new”! The first Mortgagee Letter of 2014 has arrived, superseding the guidance contained in Mortgagee Letter 2002-14.
In Mortgagee Letter 2014-1, HUD clarifies what notice FHA-approved mortgagees must provide to delinquent mortgagors to satisfy the requirement found in 24 C.F.R. § 203.602. Under the new Mortgagee Letter, mortgagees must send delinquent borrowers the “Save Your Home: Tips to Avoid Foreclosure” brochure (HUD-2008-5-FHA) no earlier than the 32nd day of delinquency and no later than the 60th day of delinquency. This mandate replaces the previous requirement to send borrowers the “How to Avoid Foreclosure” brochure (HUD-PA-426), which has not been updated since 2001. We note that, while the requirement to send the “Save Your Home: Tips to Avoid Foreclosure” brochure is new, the brochure itself has been around for at least several years. Read More
Laurence E. Platt and Nanci L. Weissgold will speak at the MBA’s National Mortgage Servicing Conference & Expo 2014 in Orlando, Florida (Feb 18-21).
Larry Platt is scheduled to speak on the panel titled “Servicers, Servicing on Common Ground” and will explore how the new servicing regulations will impact banks, community banks and non-banks each on a different level.
Nanci Weissgold will speak on the panel titled “New Expectations for Borrower Communications” and will discuss how best to integrate CFPB’s continuity of contact and complaint management requirements into a servicer’s operations.
We hope to see you in Orlando!
Washington, D.C. – The Washington, D.C., office of global law firm K&L Gates LLP welcomes Jonathan N. Eisenberg as a partner in the government enforcement practice and Randolph M. Goodman, J. Barclay Collins, and Michelle A. Wakino as partners in the tax-exempt organizations practice. Eisenberg returns to K&L Gates from UBS Wealth Management Americas while Collins, Goodman, and Wakino join the firm from Wilmer Cutler Pickering Hale and Dorr LLP.
To read the full press release, click here.
By: Andrea Beatty
Andrea Beatty, partner at K&L Gates joins BRR to discuss the new privacy reforms coming in next year and their effect on the financial sector.
To listen to the broadcast, click here.
Jacqui Scanlan: Andrea Beatty, partner at K&L Gates joins us to discuss privacy law reform in the financial sector. Andrea welcome to BRR Media.
Andrea Beatty: Thank you very much Jacqui
To read the full transcript, click here.
By: David I. Monteiro, Michael A. Cumming
Recently, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Comptroller of the Currency (“OCC”) issued final supervisory guidance (FDIC guidance, OCC guidance) for financial institutions that offer so-called “deposit advance products.” By using these products, borrowers generally receive small-dollar, short-term loans and promise to repay them from the proceeds of their next paycheck (or benefit disbursement), which are direct-deposited into the borrower’s bank account. Notably, the regulators’ guidance applies to deposit advance products “regardless of how the extension of credit is structured” (e.g., as a loan or a line of credit). Read More
By: Phillip L. Schulman, Holly Spencer Bunting
Well, the wait is over. After 16 months and much anticipation, the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) released a 1,888-page final rule on November 20, 2013 to combine mortgage disclosures required under the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”). With an August 1, 2015 effective date, the anxiety for lenders, title companies, and real estate brokers has just begun.
To read the full alert, click here.
By: Phillip L. Schulman, Irene C. Freidel, David D. Christensen
Providing clarity in an area of law that had become increasingly muddled over the last two decades, the U.S. Court of Appeals for the Sixth Circuit has issued a decision that clarifies the scope of RESPA’s safe harbor for affiliated business arrangements (“ABA”). In Carter v. Welles-Bowen Realty, Inc., the court held that ABAs need only satisfy the three requirements set forth in the statute to fall within the statutory safe harbor; they do not need to also satisfy the so-called 10-factor “sham ABA” test addressed in HUD’s 1996 policy statement (“1996 Policy Statement”).
To read the full alert, click here.
On December 3, 2013, the CFPB issued a rule allowing the Bureau to supervise certain nonbank student loan servicers. Student loans represent the second-largest consumer debt market in the country after mortgage loans, and the two industries face similar problems. For instance, many consumers are seeking student loan modifications, just as many consumers are seeking mortgage loan modifications. In fact, the most common type of consumer complaint the CFPB has received about student loan servicing relates to borrowers trying to adjust their repayment terms in times of hardship. The CFPB estimates that 7 million student loan borrowers are in default on their debt. Read More
By: Irene C. Freidel
Providing clarity in an area of law that had become increasingly muddled over the last two decades, the U.S. Court of Appeals for the Sixth Circuit held on November 27, 2013 that HUD’s 1996 policy statement setting forth a so-called “10-factor test” to determine whether an affiliated business arrangement (“ABA”) is bona fide or a sham is not entitled to deference (“1996 Policy Statement”). See Carter v. Welles-Bowen Realty, Inc., No. 10-3922 (6th Cir. Nov. 27, 2013). The Real Estate Settlement Procedures Act (“RESPA”) prohibits the payment of a fee in exchange for a referral of settlement service business. Profits generated by ABAs are exempt from this prohibition if the ABA meets the three prerequisites in RESPA’s safe harbor. Even though the plaintiff did not dispute that the ABA in Carter satisfied the three safe harbor requirements, they urged the district court to hold that the ABA nonetheless fell outside the safe harbor because, they claimed, the ABA did not satisfy a fourth requirement, namely HUD’s 1996 Policy Statement. While several district courts have otherwise concluded that an ABA must satisfy HUD’s policy statement in order to fall within the safe harbor, the theory was rejected by district judge Jack Zouhary in the Carter case. Read More
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