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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly October 2024
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Natural hazard disclosure mark-up a ‘junk fee,’ potential RESPA violation?
Posted Date: Friday, August 30, 2024
When discussing RESPA violations and illicit kickbacks, an arrangement between a title agent and a real estate broker is often a go-to example. Peter Masaitis, an attorney in California, brought a different angle to RESPA News’s attention that could be harming homeowners in his state related to natural hazard disclosures.
Masaitis explained the potentially RESPA-violating behavior he’s seen, and what is being done to address it.
Read on for more details.
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NAR to appeal case to Supreme Court
Posted Date: Thursday, September 5, 2024
A status report filed in the National Association of Realtors’ (NAR) challenge to the D.C. Circuit’s holding to allow the Justice Department (DOJ) to reopen an investigation into the trade organization indicated NAR’s intent to take the issue to the U.S. Supreme Court.
This is the latest action in a case that dates back to a complaint filed with the DOJ by an industry participant in 2018.
Read on for more details.
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Judge recuses herself from buyer agent commission cases
Posted Date: Monday, September 9, 2024
U.S. District Judge Andrea Wood recused herself from three of the cases related to real estate agent commission and compensation negotiations.
The decision was made after a potential conflict of interest came to her attention.
Read on for more details.
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UWM moves to dismiss RESPA, RICO class action
Posted Date: Wednesday, September 11, 2024
In its response to a class action accusing United Wholesale Mortgage (UWM) of violating RESPA and the Racketeer Influenced and Corrupt Organizations Act, the wholesale mortgage broker filed a motion to dismiss, calling the complaint “legally meritless” for “dozens” of reasons.
According to the plaintiffs, UWM and its CEO Mat Ishbia “orchestrat[ed] and execut[ed] a deliberate scheme, in coordination with a host of corrupted mortgage brokers, to cheat hundreds of thousands of borrowers out of billions of dollars in excess fees and costs that they paid to finance their homes.”
Read on for more details.
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Servicer caught in discrepancy over document production
Posted Date: Friday, August 30, 2024
A case from the U.S. District Court for the Southern District of Ohio, Eastern Division, involved qualified written requests. The servicer’s argument that it complied with RESPA in its response to the borrower’s inquiry was at issue, since it produced the documents during discovery that the servicer had claimed were not in its possession when the borrower previously asked for them.
The loan at issue was a second mortgage of an 80/20 financing plan executed in 2006 – the borrower had believed her two mortgages had been consolidated, and only to discover the second one had not been discharged when she went to sell the home.
Read on for more details.
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Failure to communicate, wrong address result in RESPA trouble for PNC
Posted Date: Thursday, September 5, 2024
PNC did not fare well in a case where a failure to communicate escrow changes and letters sent to the wrong address resulted in a foreclosure without the owner’s knowledge, sparking claims of a RESPA violation, among other causes of action.
Two defendants filed a counterclaim against the company who foreclosed on the property, as well as the company who bought it.
Read on for more details.
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Alleged federal mortgage insurance scam costs company $2.4M
Posted Date: Thursday, September 26, 2024
A former mortgage lender located in Kansas City, Mo., resolved allegations it violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act via its underwriting activities related to home equity conversion mortgages.
This settlement is the result of a lawsuit filed in 2020 asserting James B. Nutter & Co. knowingly violated certain underwriting requirements set by the Federal Housing Administration.
Read on for more details.
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New Jersey redlining settlement requires more than just $15M redress
Posted Date: Thursday, September 26, 2024
In the consent order proposed to resolve the Justice Department’s allegations of redlining against a New Jersey bank, the terms of the settlement included not just $15 million in redress and penalties, but other requirements to show the bank’s commitment to fair and equitable lending practices.
The complaint alleged the bank failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods.
Read on for more details.
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NAR Clear Cooperation Policy targeted by trade petition
Posted Date: Thursday, September 26, 2024
The American Real Estate Association, a new trade organization founded as an alternative to the National Association of Realtors (NAR), is pushing for an end to NAR’s Clear Cooperation Policy.
The petition on Change.org claimed the policy severely restricts homeowners’ consumer choice and the ethical obligations of real estate professionals.
Read on for more details.
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All mortgage holders to benefit from rate cut, CFPB director says
Posted Date: Thursday, September 26, 2024
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra addressed key issues affecting homeowners with mortgages – including the effects of the Federal Reserve’s recent interest rate cut, the potential for mortgage refinancing, and the looming crisis in homeowners insurance – in prepared remarks delivered at the Center for American Progress Housing Summit.
On the heels of the Federal Reserve’s 0.5 percent cut to the federal funds rate, Chopra discussed how the highly anticipated decision will likely impact mortgage holders.
Read on for more details.
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August market experiences dip in existing home sales
Posted Date: Thursday, September 26, 2024
Existing home sales experienced a dip in August, with sellers “still appear[ing] to hold the upper hand” in some regions, according to the National Association of Realtors.
The organization’s chief economist said while August’s numbers may have been disappointing, recent changes in inventory and interest rates set the stage for a more optimistic future.
Read on for more details.
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Incenter names new Lending-in-a-Box president
Posted Date: Wednesday, September 25, 2024
Ralph Armenta has joined Incenter Lender Services as Lending-in-a-Box president. Incenter is a family of companies that collaborate on solutions to improve the financial and operational performance of both lenders and depositories.
Read on for more details.
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Chopra cites ‘exorbitant closing costs,’ ‘junk fees’ as barriers to homeownership
Posted Date: Wednesday, September 18, 2024
Consumer Financial Protection Bureau Director Rohit Chopra spoke at the Congressional Black Caucus Foundation’s 53rd annual Legislative Conference in Washington, D.C.
During his remarks, Chopra touched on the bureau’s efforts prosecuting redlining, working to ensure home appraisals are fair and accurate, and the rising costs of buying and maintaining a home.
Read on for more details.
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‘Junk fee’ class action alleges servicer violated FDCPA
Posted Date: Wednesday, September 18, 2024
A class action out of U.S. District Court for the Eastern District of New York accused a mortgage loan servicer of violating the Fair Debt Collection Practices Act with its “EZ pay” fees charged to customers who made payments online or over the phone.
Select Portfolio Servicing was accused of charging pay-to-pay fees much higher than what it actually cost to process the mortgage payments.
Read on for more details.
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Pacific Legal Foundation offers perspective into APA cases
Posted Date: Wednesday, September 18, 2024
The Pacific Legal Foundation hosted a webinar titled “Decision Breakdowns: Loper Bright Enterprises v. Raimondo and Securities and Exchange Commission v. Jarkesy” featuring members of the prevailing legal teams to discuss the Supreme Court’s reasoning and the potential impacts of overruling the Chevron Doctrine.
Read on for more details.
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Zillow, HUD to partner on expanding homeownership
Posted Date: Wednesday, September 18, 2024
The U.S. Department of Housing and Urban Development is working with Zillow in an effort to attract the next generation of homebuyers.
The agency also published a final rule related to housing counseling agencies and delivering critical housing counseling services.
Read on for more details.
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Risk analysis tool provides insight into disaster impact
Posted Date: Wednesday, September 18, 2024
The Federal Housing Finance Agency (FHFA) released an online risk analysis tool for property owners, community leaders, financial institutions, policymakers, and other stakeholders to provide insight into which areas are most likely to be negatively impacted by natural hazards.
FHFA’s Mortgage Loan and Natural Disaster Dashboard allows users to combine FHFA’s public use database (PUDB) with data on previous disasters and other analysis from the Federal Emergency Management Agency (FEMA), the agency stated in a release.
Read on for more details.
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NAR accused of discrimination, retaliation by former employee
Posted Date: Monday, September 16, 2024
A former National Association of Realtors employee accused the trade organization of retaliation after she made complaints about discrimination and sexual harassment.
According to the amended complaint, she alleged being continually exposed to “lascivious” and “objectively offensive” comments about women from a coworker and was ultimately fired after speaking up about the issue.
Read on for more details.
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Ninth Circuit considers borrowers’ appeal in RESPA case
Posted Date: Monday, September 16, 2024
Plaintiffs appealed a court’s decision in a case where they had alleged their servicer had violated RESPA when it failed to respond to qualified written requests and improperly reported information to credit reporting agencies.
In this update on the suit, the Ninth Circuit weighed in on the issues.
Read on for more details.
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Safety standards updated to expedite affordable home production
Posted Date: Monday, September 16, 2024
The U.S. Department of Housing and Urban Development updated its manufactured home construction and safety standards for the first time in over 30 years to increase production of what has become an avenue for affordable homeownership.
The agency stated these updates will “expedite the home production process by cutting red tape and eliminating the need for manufacturers to obtain alternative construction approvals for materials that already meet or exceed HUD standards – helping build more manufactured homes that will lower housing costs for American families.”
Read on for more details.
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Loss mitigation option receives facelift
Posted Date: Monday, September 16, 2024
The Federal Housing Administration proposed updates to one of its loss mitigation options.
The agency published a mortgagee letter about the changes on its drafting table for industry participants to review.
Read on for more details.
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Committee chair ‘disappointed’ in FDIC chair
Posted Date: Monday, September 16, 2024
Rep. Patrick McHenry (R-N.C.) said he was disappointed by Federal Deposit Insurance Corp. Chair Martin Gruenberg in a letter to Gruenberg.
The representative’s frustration was because of Gruenberg’s refusal to testify before the House Committee on Financial Services this week.
Read on for more details.
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How CFPB proposed mortgage servicing changes could help borrowers
Posted Date: Wednesday, September 11, 2024
A Garris Horn, LLP senior partner shared his insights into the Consumer Financial Protection Bureau’s proposed revisions to mortgage servicing provisions within Regulation X meant to alleviate some of the technical hurdles consumers face when looking for a loan modification.
Among other observations, the industry expert noted these changes could ease a very technical, albeit not very flexible, loan modification application process that loan servicers must adhere to in supporting homeowners when they struggle in their repayment efforts and face payment delinquency.
Read on for more details.
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RESPA complaint follows unexplained mortgage modification cancellation
Posted Date: Wednesday, September 11, 2024
A U.S. federal court in New York considered the motions to dismiss from Nationstar Mortgage, LLC, dba Mr. Cooper, and Fay Servicing, LLC in a case alleging RESPA violations related to a loan modification allegedly canceled after the borrower made requisite trial payments and returned a signed copy of the agreement.
The plaintiff also brought a breach of contract claim against Nationstar.
Read on for more details.
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CFPB working to remove affordable housing, refinancing obstacles
Posted Date: Wednesday, September 11, 2024
In a speech at the National Housing Conference’s “Revolutionizing Homeownership” event on Sept. 9, Consumer Financial Protection Bureau Director Rohit Chopra focused on challenges such as high interest rates and other obstacles homeowner’s face in today’s market, and how the bureau is addressing them.
Read on for more details.
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Consumers’ optimism over mortgage rates tempered by housing market
Posted Date: Wednesday, September 11, 2024
Fannie Mae’s Home Purchase Sentiment Index increased slightly in August, attributed to consumer optimism over mortgage rates. This hope struggled to offset the persistent pessimism about whether it is a good time to buy a home.
To give context to these results, Fannie Mae’s vice president and deputy chief economist said the difference in construction activity from market to market may be impacting consumer perspective.
Read on for more details.
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Rocket Mortgage accused of ‘abusive servicing’
Posted Date: Monday, September 9, 2024
Rocket Mortgage, LLC attempted to establish federal jurisdiction in a case where it is accused of engaging in abusive servicing practices by two borrowers in relation to the insurance carrier and their deed of trust secured by their Mississippi home.
The court considered Rocket Mortgage’s argument that the borrowers’ invoked RESPA in a later filing, and even if subject matter jurisdiction was not satisfied, then diversity of citizenship required this case to be heard in federal court.
Read on for more details.
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Most sellers willing to cover ‘some’ fees in post NAR settlement market
Posted Date: Monday, September 9, 2024
After changes in how buyer broker compensation is negotiated were implemented last month, Redfin agents are reporting in on what changes they have noticed in the industry, and what trends they are seeing in seller’s willingness to cover transaction fees.
Of note, different parts of the country are seeing different levels of impact – while some areas are experiencing an uptick in fee negotiation, other markets haven’t seen much change at all.
Read on for more details.
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Brokers provide essential services, better value for consumers, study shows
Posted Date: Monday, September 9, 2024
Consumers, on average, save over $10,000 over the life of their mortgage loan when working with an independent mortgage broker, a study found.
The same data also showed the benefits of such arrangements, particularly for veterans and minority borrowers.
Read on for more details.
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Home price relief in sight, mortgage experts predict
Posted Date: Monday, September 9, 2024
After comparing the answers from over 100 experts across the housing and mortgage industries, Fannie Mae announced predictions that home price growth will begin to decelerate in 2025.
Fannie Mae Vice President and Deputy Chief Economist Mark Palim gave insight on the panelist’s forecast, including suggestions on how to address housing affordability and supply concerns.
Read on for more details.
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Waters applauds court’s decision on CFPB’s small-business lending rule
Posted Date: Monday, September 9, 2024
Rep. Maxine Waters (D-Calif.) offered words of support to a federal district court in Texas that held the Consumer Financial Protection Bureau’s final rule related to collecting data points on small businesses was properly promulgated under the Administrative Procedures Act.
Read on for more details.
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Zombie foreclosures hit record low in Q3
Posted Date: Thursday, September 5, 2024
The count of “zombie” homes – those properties ATTOM describes as vacant and “stuck” in the foreclosure process – has decreased to the lowest point seen in years, according to the data curator’s vacant property and zombie foreclosure report for the third quarter.
ATTOM CEO Rob Barber said one of the significant factors in this trend is the high level of home equity, providing strong incentive for borrowers to negotiate new payment plans.
Read on for more details.
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Dip in pending home sales recorded in July
Posted Date: Thursday, September 5, 2024
July’s pending home sales dipped month-over-month.
The National Association of Realtors’ chief economist said the lack of a sales recovery this summer may be related to the upcoming election.
Read on for more details.
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HUD grantees receive additional support in fighting housing discrimination
Posted Date: Thursday, September 5, 2024
The U.S. Department of Housing and Urban Development awarded funds out of its 2024 budget to support 75 fair housing organizations.
The funds, issued through the agency’s Fair Housing Initiatives Program, were directed toward second- and third-year multiyear grantees of the Private Enforcement Initiative.
Read on for more details.
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American credit usage, lack of savings concern ‘Bowtie’ Economist
Posted Date: Friday, August 30, 2024
Acclaimed “Bowtie” Economist Elliot Eisenberg, Ph.D., provided a candid and frank outlook on the economy during the 2024 National Settlement Services Summit (NS3) in Naples, Fla.
“We’re using the crap out of our credit cards. We shouldn’t be doing that,” he said while he explained the concerning more spending, less saving trend that is occurring.
Read on for more details.
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Leaders share how failure can be necessary on road to success
Posted Date: Friday, August 30, 2024
At October Research’s second annual Women’s Leadership Summit, Sheri Olsen, national director of banking services and senior vice president at First American Trust, and Jenny Martin, senior vice president, chief business development officer and national division manager at Futura Title & Escrow, presented “Growing Our Journey Together.”
They discussed some successes and failures they faced within the real estate world and shared lessons learned to aid others in their search for success.
Read on for more details.
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Texas county settles discrimination claims over buyout program
Posted Date: Friday, August 30, 2024
Harris County, Texas, home to Houston, entered into an agreement with the U.S. Department of Housing and Urban Development over allegations of discrimination on the basis of race and national origin.
The allegations came after a complaint was filed alleging the county’s Post Disaster Relocation and Buyout Program offerings impermissibly varied based on the demographics of neighborhoods.
Read on for more details.
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Bill proposes positive rental payments for multifamily borrowers
Posted Date: Friday, August 30, 2024
A bill introduced by Sen. Jon Ossoff (D-Ga.) would require positive rental payments to be considered by certain owners of multifamily buildings, aimed at providing additional avenues of affordable housing to consumers.
Read on for more details.
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