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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly January 2017
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Still on the fence about MSAs? Consider these alternatives
Posted Date: Friday, December 23, 2016
Although the D.C. Circuit Court of Appeals decision in PHH Corp. v. CFPB firmly supported the settlement services industry’s interpretation regarding RESPA Section 8, given the bureau’s petition for rehearing en banc and its October 2015 compliance bulletin, some reservations remain about the costs-benefits of marketing services agreements. At RESPRO’s seminar in Washington, D.C. RESPA experts Phillip Schulman, partner at Mayer Brown, and Loretta Salzano, co-founder of Franzén and Salzano, P.C., discussed possible marketing alternatives.
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PHH: ‘Meticulous’ ruling does not need en banc review
Posted Date: Thursday, December 22, 2016
Calling the D.C. Circuit Court of Appeals’ ruling “meticulous” and “well-reasoned,” PHH Corp. filed its response brief Thursday to the appellate court, urging it not to grant an en banc review of PHH Corp. v. CFPB.
The mortgage lender said there was “no justification” for the full court to review the ruling, and thereby devote its “limited resources to retreading this ground.” PHH’s response brief referred to CFPB Director Richard Cordray’s actions as “autocratic” and charged the bureau with name-calling to make its point.
Read on for more details from the response brief filed by PHH Corp.
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CFPB tries to dodge constitutionality question in CashCall
Posted Date: Monday, December 19, 2016
CashCall, Inc. has filed a motion for an interlocutory appeal or, in the alternative, a stay of the Aug. 31, 2016, order from the U.S. District Court for the Central District of California in CFPB v. CashCall, Inc. The online loan servicer asserted that the court erred in upholding the bureau’s constitutionality and in holding that violations of state law could undergird claims for unfair, deceptive or abusive acts or practices under UDAAP. Find out how the bureau responded to this motion.
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Institute: CFPB improperly applied FOIA exemptions
Posted Date: Monday, December 19, 2016
In a lawsuit filed in the U.S. District Court for the District of Columbia, the Cause of Action Institute has alleged that the Consumer Financial Protection Bureau has improperly applied certain exemptions under the Freedom of Information Act. The institute was seeking information regarding the bureau’s methodology for its arbitration study. Why is the bureau trying to withhold more than 1,800 documents? Find out which exemptions the bureau has asserted.
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Appellate court examines Spokeo limits
Posted Date: Monday, December 5, 2016
Although the Second Circuit Court of Appeals blocked a putative class action against Comenity Bank of Columbus, Ohio, by named-plaintiff Abigail Strubel, the court disagreed with the bank’s interpretation of Spokeo, Inc. v. Robins, under which the U.S. Supreme Court held that plaintiffs must show particularized and concrete harm for standing. Find out why.
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Themes found within reverse mortgage consent orders
Posted Date: Thursday, December 8, 2016
The Consumer Financial Protection Bureau issued consent orders against three reverse mortgage companies – including the largest in the nation – for alleged deceptive advertising in violation of UDAAP and Regulation N. What were the common practices among these three lenders? What were the differences? Find out in this in-depth dive.
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Will Trump remove Cordray? Should he even try?
Posted Date: Monday, December 12, 2016
Will president-elect Donald Trump take steps to remove Consumer Financial Protection Bureau Director Richard Cordray from his position? Given the D.C. Circuit Court of Appeals’ decision in PHH Corp. v. CFPB, this question has been circulating within industry circles since the election. Another question that needs to be asked, however, is: Should he? Joseph T. Lynyak III, partner at Dorsey & Whitney LLP, and Ken Trepeta, president and executive director of RESPRO, spoke with RESPA News.
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CFPB outlines its rulemaking agenda
Posted Date: Monday, December 5, 2016
As required by the Regulatory Flexibility Act, the Consumer Financial Protection Bureau has released its semi-annual update on its rulemaking agenda. Get the details on the bureau’s progress regarding its proposals to amend TRID, as well as what other initiatives are on the bureau’s horizon.
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Incentive programs: What are the CFPB’s expectations? (Part 1)
Posted Date: Monday, December 5, 2016
Without directly mentioning the recent lawsuits against Wells Fargo for its incentive-based cross-selling program, which led to the opening of thousands of unauthorized deposit and credit card accounts, the Consumer Financial Protection Bureau issued a compliance bulletin regarding its expectations for effective compliance management systems regarding incentive programs. In this first segment, we dig into the bureau’s recommendations. In our second part we will learn about key takeaways from industry expert Richard Andreano, partner at Ballard Spahr LLP, and how the bureau’s guidance affects loan originator compensation.
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Incentive programs: How they intersect with LO Comp (Part 2)
Posted Date: Thursday, December 8, 2016
The Consumer Financial Protection Bureau recently released a compliance bulletin outlining its expectations for incentive programs, including the roles of managers and board of directors. However, the guidance leaves out an important item: Loan originator compensation. In the first part of this series we highlighted the bureau’s recommendations. In this second part, industry expert Richard Andreano, a partner with Ballard Spahr LLP, discussed with RESPA News what the bulletin may be signaling to the industry.
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TRID compliance defects dip down
Posted Date: Monday, December 12, 2016
ACES Risk Management, ARMCO has released its Mortgage Quality Control Trends Report, detailing its findings from the second quarter of 2016. In its previous report, the company found that Legal/Regulatory/Compliance and Loan Package Documentation were the top two defect categories, and that remains the case. Read on to learn more.
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Minnesota at forefront of anti-kickback enforcements
Posted Date: Thursday, December 22, 2016
The Minnesota Department of Commerce has issued a consent order against Liberty Title Inc. for giving things of value to a real estate agent, a violation of RESPA’s anti-kickback provisions. Earlier this year, the department issued two consent orders against real estate agents. Find out what was given and received, what penalties were charged, as well as the standard the department used in determining that the things of value were pursuant to an agreement.
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Solicitor General dances around the constitutional question in PHH Corp.
Posted Date: Friday, December 30, 2016
The Solicitor General submitted a response brief on the Consumer Financial Protection Bureau’s petition for rehearing en banc in PHH Corp. v. CFPB. Although the Solicitor General’s Office called for the petition for rehearing to be granted, the U.S. did not necessarily oppose the D.C. Circuit Court of Appeals’ decision to strike out the removable “for cause” provision in the Dodd-Frank Act.
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Here’s what you can expect in 2017
Posted Date: Friday, December 30, 2016
This year has seen some of the balance of power shift from the Consumer Financial Protection Bureau to the industry; and with the next administration seeing White House and Congress controlled by Republicans, there is a much greater chance that more industry-favorable changes are on their way. Industry expert Richard Horn, a former CFPB senior counsel and special advisor who led the TRID rule, detailed what the industry may expect in 2017.
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CFPB to answer to ‘back-room pressure tactics’
Posted Date: Friday, December 30, 2016
The Consumer Financial Protection Bureau will have to respond to counterclaims that it engaged in Operation Choke Point tactics to coerce Nationwide Biweekly Administration, Inc.’s banking partners to stop lending to the company. The CFPB alleged that Nationwide violated the Consumer Financial Protection Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act regarding its “Interest Minimizer” product.
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Failure to comply with previous order leads to $200,000 penalty
Posted Date: Friday, December 30, 2016
The Consumer Financial Protection Bureau has entered into a consent order with Military Credit Services, LLC for alleged violations of the Electronic Fund Transfer Act, TILA and the Consumer Financial Protection Act. This was the bureau’s second enforcement action against the company, which had been ordered to revise its disclosures previously in 2015.
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HUD promotes self-sufficiency for public housing residents
Posted Date: Friday, December 30, 2016
The Department of Housing and Urban Development recently announced two significant grants: one to help public housing authorities, public housing resident associations, Native American tribes and non-profit organizations retain service coordinators to help residents achieve economic and housing independence; and another to assist veterans and their families experiencing homelessness in rural areas.
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CFPB details fair lending priorities
Posted Date: Friday, December 30, 2016
Patrice Ficklin, director of fair lending at the Consumer Financial Protection Bureau, recently outlined the key areas the CFPB’s fair lending team will be focusing its efforts in 2017. Find out which three topic areas will receive increased focus.
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One-third of lenders dissatisfied with LOS
Posted Date: Friday, December 23, 2016
STRATMOR Group, a mortgage industry advisor firm, has released its latest STRATMOR Insights report, finding that 30 percent of lenders claimed to be dissatisfied with their loan origination systems. In 2015, 28.7 percent of lenders stated that they were not satisfied with their loan origination system. Find out what percentage of survey respondents reported being satisfied with their systems, and which percentage are actively seeking new systems.
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Michigan court weighs in on foreclosure case
Posted Date: Friday, December 23, 2016
In a wrongful foreclosure claim including alleged TILA and RESPA violations, a pro se plaintiff claimed that U.S. Bank did not have standing to foreclose on his property. The U.S. District Court for the Western District of Michigan dismissed the case with prejudice. Find out why.
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HUD awards record grants to fight homelessness
Posted Date: Friday, December 23, 2016
HUD has awarded a record $1.95 billion in grants to nearly 7,600 homeless assistance programs across the country, as well as in Puerto Rico, Guam and the U.S. Virgin Islands. HUD’s Continuum of Care grants provide support to local programs on the front lines of serving individuals and families experiencing homelessness. Read on to learn more.
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Inaccurate language leads to UDAAP violations
Posted Date: Thursday, December 22, 2016
The Consumer Financial Protection Bureau entered into a consent order with Moneytree, Inc., for alleged deceptive acts and practices relating to its online advertisements and its collection letters. Moneytree’s advertisements contained certain typos for its tax-refund check-cashing services. Find out what else the bureau found regarding the company’s “weak CMS.”
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Wells Fargo avoids breach of contract claims
Posted Date: Thursday, December 22, 2016
The Third Circuit Court of Appeals recently considered the U.S. District Court for the Middle District of Pennsylvania’s dismissal of plaintiffs Richard and Alice Angino’s breach of contract claims against Wells Fargo. Find out why the court determined that no contract terms existed that obligated the bank to grant a loan modification.
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CFPB unveils where its data collections are going
Posted Date: Thursday, December 22, 2016
While appearing at the Consumer Financial Protection Bureau Research Conference, Director Richard Cordray unveiled the bureau’s new Consumer Credit Trends tool. The tool is built on a sample of credit records from one of the top three nationwide credit repositories and allows the bureau to monitor market trends and identify risks to consumers.
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Flex Modification set to replace HAMP
Posted Date: Thursday, December 22, 2016
Fannie Mae and Freddie Mac have unveiled their Flex Modification foreclosure prevention program, which is designed to help America’s families by offering reductions to their monthly mortgage payments. The program is set to leverage components of the Home Affordable Modification Program (HAMP), which expires at the end of this year.
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Plaintiff raises federal consent orders in lawsuit
Posted Date: Wednesday, December 21, 2016
The U.S. District Court for the District of Maryland recently considered the TILA and RESPA claims of a pro se plaintiff who claimed defendants Bank of America and Countrywide had a history of “violations of unfair and deceptive trade practices” supported by the fact that they had “agreed to consent judgments requiring them to comply with certain servicing standards.” Read on for more details.
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CFPB concerned over university, bank agreements
Posted Date: Monday, December 19, 2016
The Consumer Financial Protection Bureau has found that marketing agreements between large banks and universities may be steering students to less beneficial products and causing them to incur thousands of dollars in fees. The bureau noted that many of these agreements contained extensive details about how the school and the bank would profit. “We urge schools to put students’ financial interest first,” Director Richard Cordray said. Find out what laws and requirements regarding transparency the bureau recently highlighted.
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New housing counseling certification requirements announced
Posted Date: Monday, December 19, 2016
HUD will be requiring housing counselors who participate in HUD programs to meet new certifications requirements. Find out what topics areas counselors will need to demonstrate competency in, as well as the available information for counselors to prepare for the upcoming exams.
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FHFA issues rule on underserved markets
Posted Date: Monday, December 19, 2016
The Federal Housing Finance Agency (FHFA) has issued a final rule to implement the Duty to Serve provisions mandated by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. Under this rule, Fannie Mae and Freddie Mac will be required to serve three specified underserved markets: manufactured housing, affordable housing preservation and rural housing.
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Ex parte communications a special focus of CFPB Ombudsman report
Posted Date: Monday, December 19, 2016
In its annual report, the CFPB Ombudsman’s Office included two broader issues within its analysis on systemic issues – the memorialization of ex parte communications and consumers’ options to identify concerns with their companies, as provided in the CFPB’s public Consumer Complaint Database. Find out what recommendations were made to improve these processes.
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D.C. Circuit sets deadline for PHH Corp. responses
Posted Date: Thursday, December 15, 2016
The D.C. Circuit Court of Appeals has entered an order establishing a deadline for PHH Corp. and the Solicitor General to respond to the Consumer Financial Protection Bureau’s petition for rehearing en banc. Meanwhile, amici curiae have been submitted by several members of Congress and consumer groups. Find out what arguments have been proffered.
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FINRA seeks info from former Wells Fargo employees
Posted Date: Wednesday, December 14, 2016
Amid the legal fallout of the enforcement actions against Wells Fargo, after it was determined that thousands of unauthorized accounts had been open to meet stringent cross-selling target, the Financial Industry Regulatory Authority (FINRA) has issued a request for information from former Wells Fargo employees concerned about their terminations. Read on to learn more.
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NMLS renewals off to a strong start
Posted Date: Wednesday, December 14, 2016
The 2017 renewal period for the Nationwide Multistate Licensing System (NMLS) is off to a strong start, with the number of renewal approvals up from 2015, according to an announcement from the State Regulatory Registry LLC, owner and operator of the NMLS and a subsidiary of the Conference of State Bank Supervisors. The “Your License is Your Business” renewal campaign is seeking to educate businesses and individuals that, by submitting renewal requests in early, they greatly reduce the likelihood of their license being terminated Jan. 1, 2017.
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HUD launches community investment tool
Posted Date: Wednesday, December 14, 2016
HUD has launched an innovative reference and mapping tool called the Community Assessment Reporting Tool (CART). The purpose of the tool is to answer the following question: “How is HUD investing in my community?” Read on for more details.
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FHFA seeks comments on FHLB programs
Posted Date: Wednesday, December 14, 2016
The comment period for a Federal Housing Finance Agency request for comment on its “Affordable Housing Program” information collection will end Dec. 29. According to the notice published in the Federal Register, Section 10(j) of the Bank Act requires the FHFA to promulgate regulations under which each of the 11 Federal Home Loan Banks establishes an Affordable Housing Program.
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Court: CFPB’s deceptiveness claims subject to heightened standard
Posted Date: Monday, December 12, 2016
The U.S. District Court for the Central District of California has determined that the Consumer Financial Protection Bureau’s claims against Prime Marketing Holdings, LLC for alleged violations of UDAAP and the Telemarketing Sales Rule must meet Rule 9(b)’s heightened pleading requirement for fraud. Find out how the court came to this conclusion.
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CRA may lead to repeal of mortgage servicing rules
Posted Date: Monday, December 12, 2016
In 2015, an “administrative error” under the Congressional Review Act (CRA) caused a delay in the effective of TRID. Now, the same law may cause certain mortgage servicing rules issued by the Consumer Financial Protection Bureau to be repealed under the direction of the 115th Congress. Read on to find out why and how.
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Comment period on complaint database fast approaching
Posted Date: Monday, December 12, 2016
On Nov. 29, the Consumer Financial Protection Bureau published a request for comments for a new information collection titled, “Consumer Response Customer Response Survey.” The proposal aims to incorporate a survey into the Consumer Complaint Database, where consumers can rate the response of companies’ handling of their complaint.
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Bipartisan bill would require GSEs to increase credit risk transfers
Posted Date: Monday, December 12, 2016
Reps. Ed Royce (R-Calif.) and Gwen Moore (D-Wis.) have introduced the Taxpayer Protections and Market Access for Mortgage Finance Act of 2016 (H.R. 6487), a bill “[t]o require Fannie Mae and Freddie Mac to engage in credit risk transfer transaction, and for other purposes.” Find out what the bill would require the Federal Housing Finance Agency director to do, as well as what “other purposes” the bill would serve.
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How can in-house counsel ensure a smooth CFPB exam?
Posted Date: Thursday, December 8, 2016
Facing an examination from the Consumer Financial Protection Bureau is no easy task. What is the in-house counselor’s role in all of this? At RESPRO’s fall seminar, Brian Levy, of counsel at Katten & Temple, LLP; Lynette Hale-Lee, vice president and regional manager at Wintrust Mortgage; and Philip Italiano, vice president - legal at New Penn Financial, LLC, discussed how to navigate through a bureau examination.
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Bankers, credit unions unite for regulatory request
Posted Date: Thursday, December 8, 2016
Putting aside their rivalry, the presidents and CEOs of the Consumer Bankers Association, Credit Union National Association, Independent Community Bankers of America and the National Association of Federal Credit Unions have sent a letter to Senate leaders Mitch McConnell (R-Ky.) and Chuck Schumer (D-N.Y.), calling for the Consumer Financial Protection Bureau to be converted into a five-member, bipartisan commission. Read on for more details.
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NAR, S&P tackle homeownership challenges, opportunities
Posted Date: Thursday, December 8, 2016
In an event featuring a Nobel Prize winner and other top housing experts, representatives from the National Association of Realtors and S&P Global came together to discuss the challenges and opportunities of today’s housing market. What may be driving housing prices? And what is preventing younger generations from obtaining homeownership? Read on to find out.
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Carson tapped to lead Trump’s HUD
Posted Date: Monday, December 5, 2016
After weeks of speculation, it finally has been announced that Ben Carson, former Republican presidential candidate, has been selected to be the nominee for Secretary of Housing and Urban Development (HUD) for president-elect Donald Trump’s administration. Find out what three major observations Cowen and Company, LLC made about the nomination, as well as how RESPRO and the National Association of Realtors have responded to this important announcement.
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Dems seek to curb Wells Fargo’s reliance on arbitration agreements
Posted Date: Monday, December 5, 2016
As Wells Fargo continued to push enforcement of arbitration agreements contained within the consumer contracts for authorized accounts, Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, and Rep. Brad Sherman (D-Calif.), a member of the House Financial Services Committee, introduced the Justice for Victims of Fraud Act of 2016, a bill that would allow consumers affected by unauthorized accounts to sue in court.
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CFPB updates small entity mortgage servicing guide
Posted Date: Monday, December 5, 2016
The Consumer Financial Protection Bureau has published an updated version of its Mortgage Servicing Small Entity Compliance Guide on its Mortgage Servicing implementation webpage; the updates incorporate amendments made to Regulation X and Regulation Z by the 2016 rule amending the mortgage servicing final rule. Get a detailed look at the changes made.
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