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Federal appeals court decides if mortgage servicer waived its rights
Posted Date: Wednesday, February 27, 2013
Does a servicer waive its statutory right to receive qualified written requests at its designated address when the servicer responds to a borrower’s QWRs that were sent to an incorrect address? This is the question the U.S. 10th Circuit Court of Appeals had to decide when it took on an appeal from a borrower who sued her servicer for failing to respond to her QWRs. Regulation X allows servicers to establish an exclusive office for the receipt and handling of QWRs. The servicer argued that because the borrower sent her letters to the wrong address, it was not obligated to reply under RESPA. The borrower said that because the servicer responded to her QWRs, the servicer could not later argue the address where it received the letters was incorrect. The lower court agreed with the servicer. Read on to find out what the 10th Circuit said on appeal.
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Associations applaud CFPB’s trial disclosure program
Posted Date: Wednesday, February 27, 2013
A group of associations wrote a comment letter to the Consumer Financial Protection Bureau regarding its proposed policy to encourage trial disclosure programs. In the Feb. 15 letter, the groups said that, in general, they support Dodd-Frank Act provisions that seek to improve consumer understanding of disclosures and promote consumer access. They also applauded the bureau’s effort to promote in-market testing of disclosures.
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HUD says $45 billion headed to homeowners
Posted Date: Wednesday, February 27, 2013
The U.S. Department of Housing and Urban Development announced that the nation’s largest mortgage servicers have distributed more than $45 billion in relief to homeowners as part as the national mortgage settlement.
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State regulators back CFPB servicing guidance and look for more consistency
Posted Date: Wednesday, February 27, 2013
The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators released a statement commending the Consumer Financial Protection Bureau on its recent bulletin regarding mortgage servicing transfers and said they will work to update state servicing examination procedures to bring consistency to regulators’ approach in this area.
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Big move for former RESPA regulator
Posted Date: Monday, February 25, 2013
The law firm of Offit Kurman announced that it hired Barton Shapiro as a principal in its Financial Institutions Compliance Practice. Shapiro worked as director of the Office of RESPA and Interstate Land Sales at the U.S. Department of Housing and Urban Development before moving to the Consumer Financial Protection Bureau in 2011. Read on to find out about Shapiro’s new role at Offit Kurman and the firms’ new consulting company.
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Find solutions to the agent vetting conundrum - Webinar
Posted Date: Monday, February 25, 2013
The Consumer Financial Protection Bureau is now holding lenders accountable for the actions of their service providers. Because of this and the recent uncertainty regarding agent vetting, title insurance agents need to prepare now for this new phase of liability and customer concerns. But, to what extent? The Legal Description and The Title Report are co-hosting a 90-minute educational webinar on Wednesday, March 6 at 2 p.m. ET to address liability issues and title agent vetting. Sponsored by RedVision, the webinar will cover specific steps agents can take to better protect their agency and train title insurance agents on what they are responsible for, how to conduct business in this new age of agent vetting and how to cope.
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U.S. Chamber of Commerce says bureau should make improvements
Posted Date: Wednesday, February 20, 2013
The U.S. Chamber of Commerce sent a letter to Consumer Financial Protection Bureau Director Richard Cordray, asking why the bureau has not taken steps to improve its supervision and regulatory processes.
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Three indicted in large mortgage fraud scheme
Posted Date: Wednesday, February 20, 2013
Three people were indicted on federal charges related to their alleged participation in a large mortgage fraud scheme involving more than 50 mortgages on residential properties in New Haven, Conn.
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Mortgage servicing regulation: Loss mitigation procedures
Posted Date: Wednesday, February 20, 2013
According to the Consumer Financial Protection Bureau, there is a general concern regarding problems with servicers’ performance when it comes to loss mitigation efforts. So, the CFPB included a section in its servicing rules to regulate loss mitigation and ensure that “borrowers are protected from harm in connection with the process of evaluating a borrower for a loss mitigation option and proceeding to foreclosure.” The bureau used the regulation to mandate how servicers must proceed with loss mitigation applications, limit when foreclosure can be initiated and restrict dual-tracking. Part 6 of RESPA News’ multi-part series on the CFPB’s mortgage servicing regulation covers loss mitigation procedures.
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Court rejects unascertainable damages in RESPA action
Posted Date: Wednesday, February 20, 2013
A couple sued their mortgage loan servicer, arguing it failed to adequately respond to their qualified written request. The borrowers said that they were damaged by the servicer’s actions, but that the damages were unascertainable until proven at trial. Read on to find out why the court rejected the borrowers’ claims.
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Mortgage disclosure forms are coming this year, voters say
Posted Date: Monday, February 18, 2013
In a December/January poll, RESPA News asked readers if they thought that the Consumer Financial Protection Bureau will release its final disclosure form rule in 2013. A majority of the respondents said yes. There was a question, however, about how early in the year the forms would be released. The Dodd-Frank Act does not have a set deadline for a final rule. However, in a Jan. 8 release, the CFPB set September 2013 as the target date for the release of the TILA/ RESPA Mortgage Disclosure Integration. The comment period for the rules closed on Nov. 6, 2012. The September target date gives the agency a full 10 months to review and integrate the feedback they received.
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States gang up against CFPB in constitutionality argument
Posted Date: Monday, February 18, 2013
The attorneys general of eight states announced that they are joining a lawsuit challenging the constitutionality of the CFPB’s formation. The AGs argue that the Dodd-Frank Act gives too much power to the federal government and leaves tax payers at risk. They maintain that Dodd-Frank violates the principles of separation of government and is unconstitutional. The lawsuit is in the U.S. District Court for the District of Columbia. It is interesting to note that the D.C. Circuit Court of Appeals recently determined that President Obama’s appointment of three members of the National Labor Relations Board was invalid. That ruling left in question whether Richard Cordray’s appointment to lead the CFPB was unconstitutional.
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Democrats push for Cordray confirmation
Posted Date: Monday, February 18, 2013
In a letter to President Barack Obama on Feb. 14, 54 Senators said they supported the decision to renominate Richard Cordray as director of the Consumer Financial Protection Bureau. The group pledged to do everything in their power to ensure Cordray is confirmed.
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Mortgage servicing: Cordray says servicers failed
Posted Date: Monday, February 18, 2013
During his testimony to the Senate Committee on Banking, Housing and Urban Affairs, Consumer Financial Protection Bureau Director Richard Cordray said that even before the mortgage crisis, servicers failed to provide borrowers with a basic level of customer service.
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Mortgage compliance: Cordray promises to work with the industry
Posted Date: Thursday, February 14, 2013
The Consumer Financial Protection Bureau released a variety of mortgage regulations in January that will go into effect next year. Some in the mortgage industry have expressed concern over the rules and the burden of compliance. The CFPB announced that it is putting an implementation plan in place that will focus on the industry’s compliance with the new rules that go into effect in January 2014.
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Obama administration says housing market strengthening
Posted Date: Wednesday, February 13, 2013
The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury released the January edition of the Obama administration’s Housing Scorecard. Data continue to show signs that the housing market is strengthening, with the number of underwater borrowers continuing to decline as home prices continue to improve, although officials caution that there is regional variation and the overall economic recovery remains fragile.
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Couple claims Wells Fargo accepted kickbacks
Posted Date: Wednesday, February 13, 2013
Two mortgage loan borrowers sued Wells Fargo, alleging the lender violated RESPA by accepting kickbacks in an illegal force-placed insurance scheme. Read on to find out what the court decided.
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Title agent convicted in reverse mortgage fraud scheme
Posted Date: Wednesday, February 13, 2013
A Florida title agent was convicted of wire fraud, mail fraud and making false representations for her role in a reverse mortgage fraud scheme where she obtained a loan worth more than $400,000.
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Bureau conducts further testing on new disclosure forms
Posted Date: Wednesday, February 13, 2013
The Consumer Financial Protection Bureau is looking to find out if the new integrated mortgage disclosure forms will help consumers understand the terms of their loans and whether the new forms are more beneficial than the previous disclosures.
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Servicing transfer-related risks to be the focus of CFPB examinations
Posted Date: Monday, February 11, 2013
The Consumer Financial Protection Bureau published a bulletin warning residential mortgage loan servicers about legal protections for consumers when loans are transferred. The CFPB said it expects servicers to be aware of related consumer risk. According to the bureau an increase in significant servicing transfers gave it cause for concern as well as consumer complaints regarding servicing transfers and loss mitigation trial programs. The CFPB indicated that it is making servicing transfer-related problems a focus of its supervisory activities and will use enforcement actions to address violations.
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Ability-to-repay webinar airs Thursday, 2/14 - Webinar
Posted Date: Monday, February 11, 2013
Join Dodd Frank Update and sponsor North American Title Insurance Co. for a 90-minute training webinar on the Consumer Financial Protection Bureau’s ability-to-repay final rule. Learn from two top mortgage and real estate attorneys about compliance with the QM standard, points and fees, affiliate fees, best practices for implementation and more. Read on for further details and registration information.
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Freddie Mac argues it’s not liable in RESPA suit
Posted Date: Friday, February 8, 2013
Freddie Mac filed a motion to dismiss in a RESPA-related suit where the borrower argued the GSE was liable under RESPA Section 6 for failing to make payments from the borrower’s escrow account to cover his homeowner insurance premiums. Freddie Mac argued that it should not be liable under RESPA because it was not the servicer on the loan. Read on to find out the fact of the case and what the court decided.
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Mortgage servicing regulation: Continuity of contact
Posted Date: Friday, February 8, 2013
According to the Consumer Financial Protection Bureau, servicers fail to communicate with delinquent borrowers as they should. The CFPB believes that servicers do not provide adequate assistance to borrowers and sometimes do not have adequate staff to handle potential loan issues. Because of this, the CFPB decided to insert a continuity of contact section in to its mortgage servicing rule to ensure that servicers provide the necessary assistance to borrowers. Part 5 of RESPA News’ multi-part series on the CFPB’s mortgage servicing regulation covers continuity of contact.
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Federal appeals court widens circuit split over TILA’s right of rescission
Posted Date: Friday, February 8, 2013
Currently, there is a split in the U.S. Federal Circuit Courts of Appeal regarding the Truth in Lending Act’s right of rescission. Under TILA, a borrower is permitted to rescind their mortgage loan within three days of closing. That time limit is extended to three years if the borrower did not receive the required right of rescission disclosure. There is a debate regarding whether a borrower exercises that right simply by providing a notice to the lender or if the borrower must also file a legal claim within that time period as well. Now, another circuit court has jumped into the fray. Read on to find out what the court decided.
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Senate Republicans say Cordray will not be confirmed
Posted Date: Wednesday, February 6, 2013
In a letter to President Barack Obama on Feb. 1, a group of 43 Senate Republicans said they will oppose the confirmation of any nominee for the position of Consumer Financial Protection Bureau director until certain changes are made at the bureau.
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Lender says executives should not be liable in RESPA action
Posted Date: Wednesday, February 6, 2013
After being sued for violations of RESPA’s anti-kickback and unearned fees provisions, a lender argued that claims against its individual executives should be dismissed because they were not personally liable. The lender also argued that an allegation of violations of the Racketeer Influence and Corrupt Organization Act should be dismissed because it simply rehashed the claimed RESPA violation. Read on to find out why the court disagreed.
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Mortgage servicing regulation: Early intervention requirements
Posted Date: Wednesday, February 6, 2013
The Consumer Financial Protection Bureau wrote some requirements into its mortgage servicing rule that were not mandated by the Dodd-Frank Act. An example of this is the section pertaining to early intervention. Although the authors of the Dodd-Frank Act did not specifically set forth these requirements, they did include a section in the law that allows the bureau to include additional mandates as it sees fit. The bureau used that power to insert some sections into the final regulation that it believed were necessary. Part 4 of RESPA News’ multi-part series on the CFPB’s mortgage servicing regulation covers early intervention requirements.
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Congress tries to rein in CFPB
Posted Date: Wednesday, February 6, 2013
After the U.S. Court of Appeals for the District of Columbia Circuit ruled that President Barack Obama’s January 2012 recess appointment of three National Labor Relations Board members was unconstitutional, many have questioned whether Consumer Financial Protection Bureau Director, Richard Cordray’s, appointment was invalid as well. Congress isn’t waiting for a legal action to question Cordray’s position. Instead, some members of the legislature have decided to take matters into their own hands.
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National database presents an onerous task to over-taxed agencies
Posted Date: Monday, February 4, 2013
The announcement by two federal agencies last fall that they intend to create a national mortgage database comprised of detailed mortgage loan information has raised a lot of red flags among industry experts concerning the monumental task of creating the database, protecting individual privacy rights, and the inherent risks of creating such a massive aggregation. But the database — if successfully coordinated — could provide regulators, researchers and market players some helpful data. In our three-part series we explore the purpose and benefits, the sources and uses, and the privacy and data risks of the proposed database.
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Title agent uses false HUD-1 in mortgage fraud scheme
Posted Date: Monday, February 4, 2013
A Florida title agent was sentenced to 24 months in prison in connection with a mortgage fraud scheme. The agent allegedly prepared and submitted false HUD-1 Settlement Statements to perpetrate the fraud.
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Bank of America agrees to $19 million settlement
Posted Date: Friday, February 1, 2013
A group of plaintiffs filed a class action lawsuit against Bank of America NA and Bank of America Home Loan Servicing LP, alleging that the defendants violated RESPA by failing to respond to their qualified written requests. After the court denied the defendants’ motion to dismiss, BAC and BofA agreed to a settlement with the plaintiffs totaling more than $19 million in damages. The court agreed the terms were reasonable and granted the settlement.
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Borrower uses RESPA to hold off foreclosure
Posted Date: Friday, February 1, 2013
A mortgage loan borrower attempted to use a RESPA violation to get a preliminary injunction against a servicer that was foreclosing on his home. The borrower argued his servicer violated RESPA by failing to respond to his qualified written request. The court found that the letter was a valid QWR and that the borrower alleged adequate damages. However, the court denied the preliminary injunction. Read on to find out why.
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