Consumer Financial Services Watch – Page 40 – News and developments related to consumer financial services, litigation, and enforcement.

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Real Estate Appraisers Board advised us that the version of the proposed rules discussed in our original post are being withdrawn.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 Annual Recertification Attestation

Jan 11 2013

By: Phillip L. Schulman

Each year, an FHA-approved mortgagee’s principal, chief executive or in-house general counsel signs an attestation as part of the Federal Housing Administration’s annual certification process that accompanies payment of the mortgagee’s yearly verification fees. Some administrative assistant puts the attestation in front of the mortgagee’s president or executive vice-president and sometimes without thinking, the executive casually attests that the company complies with all HUD-FHA regulations and no state or federal agency lifted its license during the past year. In fact, the attestation is quite expansive and mortgagees have been finding themselves hauled before the HUD Mortgagee Review Board and its executives threatened with debarment proceedings for failing to read the fine print. Read More

Private Student Lenders, Get Ready for Your Final Exams: The CFPB Releases Its Student Lending Examination Procedures

Dec 21 2012

By: Stephanie C. Robinson, Rebecca Lobenherz

This week the Consumer Financial Protection Bureau (“CFPB”) released an addendum to its Supervision and Examination Manual focused on the examination of private student lenders. The Student Lending Examination Procedures, available on the CFPB’s website, provide guidance to CFPB examiners on how to review private student lenders for compliance with consumer financial protection laws. The CFPB has supervisory authority over both very large banks and nonbanks that make private student loans. Read More

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 Provides Guidance on Effective Compliance Management Systems

Nov 07 2012

By: Jonathan D. Jaffe , Amanda D. Gossai

Last week, the Consumer Financial Protection Bureau (the “CFPB”) released its first Supervisory Highlights report, featuring issues that CFPB examiners discovered in the supervision period between July 21, 2011 and September 30, 2012. One issue upon which the CFPB focused was effective compliance management systems (“CMS”). This is not surprising given the CFPB’s focus since its inception on CMSs. Read More

Consumer Advisory Board holds its inaugural meeting

Oct 24 2012

By: Michael A. Cumming

The Consumer Advisory Board (“CAB”) held its inaugural meeting on September 27th in St. Louis. Composed of bank and credit union executives, consumer advocates and community development officials (click here to view the biographies), the CAB is required by the Dodd-Frank Act, which mandates that the CAB “provide information on emerging practices in the consumer financial products or services industry” to the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”). The CAB replaces the Consumer Advisory Council, which for 35 years advised the Federal Reserve Board on consumer financial services matters.

Regulators Highlight Hot Topics in Fair Lending: Are You Ready?

Oct 19 2012

By: Elena Grigera Babinecz

This week the Non-Discrimination Working Group of the Financial Fraud Enforcement Task Force sponsored a webinar highlighting emerging fair lending issues and hot topics that financial institutions should be aware of as regulatory agencies continue to focus their attention on discrimination in the housing and finance markets. Whether you’re in the business of making residential mortgage, commercial, student, auto, or payday loans, or you offer credit cards, it is important to understand the regulators’ areas of interest and to ensure that your compliance program is designed to monitor and address any potential concerns in these areas. Read More

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.