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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly
November 2023
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RESPA News goes to Washington: SCOTUS hears oral arguments on CFPB funding structure
Posted Date: Thursday, October 5, 2023
RESPA News took a seat in the alcoves of the U.S. Supreme Court as the justices heard arguments about the constitutionality of the Consumer Financial Protection Bureau’s funding structure.
We then checked in with Marx Sterbcow, of the Sterbcow Law Group, Richard Horn of Garris Horn, and Richard Andreano of Ballard Spahr for their insights on how it went.
Read on for more details.
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Nightmare on RESPA Street – experts share their ‘horror’ stories
Posted Date: Monday, October 30, 2023
RESPA News asked Ken Trepeta of RESPRO, Francis “Trip” Riley, III of Saul Ewing, Loretta Salzano of Franzén and Salzano, and Marx Sterbcow of the Sterbcow Group to share their RESPA “horror” stories and how to avoid repeating them.
Their stories might not have you sleeping with the lights on, but they may have you calling your compliance department to double check on things.
Read on for more details.
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Court revisits standing question in RESPA kickback case
Posted Date: Monday, October 30, 2023
After an initial complaint lacked sufficient fact to allege an injury-in-fact under RESPA, the court gave the plaintiffs an opportunity to amend their complaint. Plaintiffs also brought claims under North Carolina’s unfair and deceptive trade practices and civil conspiracy laws.
CrossCountry Mortgage and Raleigh Realty moved to dismiss the amended complaint, arguing the additions still were insufficient to establish standing to bring the RESPA kickback claim.
Read on for more details.
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Housing orgs react to agencies issuing rule updating CRA
Posted Date: Monday, October 30, 2023
The Office of the Comptroller of the Currency (OCC), the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corp. (FDIC) jointly issued a final rule to update the Community Reinvestment Act (CRA). Fair housing groups reacted to these changes, which will go into effect April 1, 2024.
“This update is both long overdue and essential,” National Community Reinvestment Coalition President and CEO Jesse Van Tol said. “Marginalized communities still suffer from a variety of inequities in mortgage and small business lending, and from the enduring effects of historic financial discrimination. CRA is one of the most powerful and important tools the government has to ensure that banks meet the credit needs of all Americans and in all communities.”
Read on for more details.
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CFPB, DOJ clarifies the use of immigration status in credit decisions
Posted Date: Monday, October 30, 2023
While the Equal Credit Opportunity Act (ECOA) does not explicitly prohibit consideration of immigration status, the Consumer Financial Protection Bureau and the Department of Justice clarified the situations when using this element in credit decisions is appropriate.
“[C]reditors should be aware that unnecessary or overbroad reliance on immigration status in the credit decisioning process, including when that reliance is based on bias, may run afoul of ECOA’s antidiscrimination provisions and could also violate other laws,” the agencies stated in a joint release.
Read on for more details.
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Pending home sales see recoup
Posted Date: Monday, October 30, 2023
After a decrease in the number of pending home sales in August, September’s numbers saw a slight uptick, according to the National Association of Realtors’ most recent index results.
The index, which is a forward-looking indication of home sales based on contract signings, increased by 1.1 percent in September to an index of 72.6.
Read on for more details.
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FinCEN GTO renewed, expanded
Posted Date: Monday, October 30, 2023
The Financial Crimes Enforcement Network has renewed and expanded geographic targeting orders requiring title insurance companies to identify the natural persons behind companies purchasing real estate without financing.
Read on for more details.
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Escrow account dispute leads to RESPA case
Posted Date: Monday, October 23, 2023
Specialized Loan Servicing (SLS) moved to dismiss a RESPA claim where a pro se plaintiff alleged the servicer “deliberately” miscalculated her escrow amount, resulting in a higher payment than what she was “entitled” to.
The plaintiff further alleged SLS refused to correct the mistake once it was brought to its attention.
Read on for more details.
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Judge strikes Tulsa Massacre reference from DOJ redlining settlement
Posted Date: Monday, October 23, 2023
Months after the Department of Justice and the American Bank of Oklahoma entered into a settlement related to the bank’s alleged redlining activities, a federal judge in the Northern District of Oklahoma struck portions of the agreement referencing the Tulsa Massacre.
The court did so under a rule of federal procedure which allows it to strike redundant, impertinent, or scandalous matters.
Read on to learn the reason behind the decision.
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Over $100M relief secured by DOJ’s Combatting Redlining Initiative
Posted Date: Monday, October 23, 2023
The Department of Justice (DOJ) has secured over $107 million in relief for communities of color as part of its Combating Redlining Initiative.
The announcement came on the heels of the DOJ’s settlement with Ameris Bank over redlining allegations.
Read on for more details.
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Existing-home sales slow, while prices stay elevated
Posted Date: Monday, October 23, 2023
September’s existing-home sales report by the National Association of Realtors showed a decrease in sales month-over-month in three of the four major regions and year-over-year decreases across all of them.
The rate of total existing-home sales in September was 2 percent less than August’s rate.
Read on for more details.
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Senators introduce bill to help veterans in the housing market
Posted Date: Monday, October 23, 2023
Sens. Sherrod Brown (D-Ohio) and Mike Braun (R-Ind.) introduced a new bill that will assist veteran homebuyers and promote the use of the VA Home Loan Program.
The VA Home Loan Awareness Act would add a disclosure to the standard mortgage prequalification application to inform veterans of their potential to qualify for a home loan through the U.S. Department of Veteran Affairs (VA).
Read on for more details.
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Home Point Financial faces RESPA kickback claims involving All Star Title
Posted Date: Thursday, October 19, 2023
Home Point Financial joins other companies facing RESPA kickback claims involving All Star Title. The district court judge considered the plaintiffs’ motion to certify the suit as a class action.
According to the complaint, Home Point allegedly participated in a scheme where its loan officers, agents, and other employees received and accepted payments in exchange for referrals to All Star’s services.
Read on for more details.
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Lender defendant moves to dismiss Michigan reverse redlining case
Posted Date: Thursday, October 19, 2023
A U.S. district judge considered a defendant’s motion for summary judgment in a case where plaintiffs alleged a “reverse redlining” scheme, bringing claims under RESPA, the Fair Housing Act, the Equal Credit Opportunity Act, and the Truth in Lending Act.
According to the complaint, defendants were selling real estate owned properties to borrowers who could not qualify for a traditional mortgage and utilized leases with option to purchase to do so.
Read on for more details.
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Enterprise tackles increased loan defects in a new market
Posted Date: Thursday, October 19, 2023
As the mortgage space shifted into a purchase market, the number of loan defects rose to levels “not seen in years.”
Freddie Mac Senior Vice President Sonu Mittal, also head of the Single-Family Acquisitions Division shared how the Enterprise worked to bring non-acceptable quality rates down.
Read on for more details.
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Senators implore FHFA to abandon new credit scoring reqs
Posted Date: Thursday, October 19, 2023
In a letter to the Federal Housing Finance Agency, Ranking Member of the Senate Committee on Banking, Housing and Urban Development Tim Scott (R-S.C.), along with several other Republican senators, urge the agency to implement reforms to credit scoring models and abandon proposed changes to credit reporting requirements.
The missive is the latest in the discussion amid the affordable housing crisis.
Read on for more details.
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FHA expands mortgage financing access
Posted Date: Thursday, October 19, 2023
Mortgage financing for homes that have, or will have, accessory dwelling units (ADUs) has been expanded by the Federal Housing Administration (FHA) in an effort to address housing supply issues.
The expansion will allow more borrowers to qualify for FHA financing for properties with ADUs, enabling more first-time homebuyers, seniors, and intergenerational families to achieve homeownership.
Read on for more details.
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Court revisits RESPA claim against Bank of America
Posted Date: Monday, October 16, 2023
In a follow-up opinion, a federal district court in Missouri ruled on the merits of the RESPA claim, along with claims under the CARES Act and state law.
The plaintiffs, representing themselves, filed an action to quiet title on their home and alleging the servicer manipulated them into a forbearance they did not want.
Read on for more details.
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Do your updated marketing tactics comply with established regs? – webinar recording available
Posted Date: Monday, October 16, 2023
John Levonick, senior partner at Garris Horn PLLC, and Nanci Weissgold, partner at Alston & Bird, along with moderator, Leslie Wyatt, director of regulatory compliance at SoftPro, spoke in sister publication Dodd Frank Update’s Compliant Marketing Tactics webinar about a host of topics that should be top-of-mind for any financial institution when marketing their products and services.
The group spoke about social media marketing and other digital platforms.
Read on for more details.
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GAO report shows market impact on housing grant program
Posted Date: Monday, October 16, 2023
The Government Accountability Office’s (GAO) report on the U.S. Department of Housing and Urban Development’s Self-Help Homeownership Opportunity Program (SHOP) emphasized how rising costs in the homebuilding market are impacting one of the agency’s programs designed to make homeownership more affordable.
The GAO recommended the use of relevant data to implement changes in spending limits for SHOP participants.
Read on for more details.
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Home prices continue to rise
Posted Date: Monday, October 16, 2023
Fannie Mae’s Home Price Index showed quarter-over-quarter and year-over-year increases.
Doug Duncan, the company’s vice president and chief economist, said it’s reasonable to expect some additional slowing in price appreciation as the year closes.
Read on for more details.
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Housing funding opportunity to help persons with disabilities
Posted Date: Monday, October 16, 2023
To expand the housing supply and support services for low-income persons with disabilities, the U.S. Department of Housing and Urban Development is providing $212 million through its Section 811 program.
Read on for more details.
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CEOs talk ‘Evolving Realtor Relationships’ – webinar recording available
Posted Date: Thursday, October 12, 2023
Jamie Kump, Qualia director of enterprise sales, moderated a discussion between Amanda Brumbelow, vice president of operations for Allegiance Title of Arkansas and founder, CEO, and business coach for ARDU Business Advisors, and Jessica Hochhalter, owner of Realty Group and CEO of RG Title, on how the current market trends have changed Realtor relationships.
Brumbelow offered advice on the steps to take when a company is looking to evolve its relationships with its real estate agent partners. Her first suggestion: talk to them.
Read on for more details about the webinar.
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Cenlar names five new directors and promotes three execs
Posted Date: Thursday, October 12, 2023
Mortgage loan subservicer Cenlar FSB has announced the appointment of five directors and the promotion of two leaders.
“I welcome the new directors to Cenlar, and congratulate our promoted employees,” Cenlar Chief Talent Officer Glen Vilim said. “This group of directors have outstanding track records in their respective fields. I am confident in their abilities to deliver the highest quality of service to all of our stakeholders, and look forward to their continued success and contributions to the company.”
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Minimum income policy sparks FHA claim
Posted Date: Wednesday, October 11, 2023
The owners of property in New York City face claims under the Fair Housing Act after implementing an income requirement for residents. The policy required all prospective renters to have an annual income 43 times their monthly rent.
The plaintiff, a fair housing group, stated this policy excluded virtually all renters who received rental subsidies, specifically impacting people with disabilities.
Read on for more details.
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Fair housing advocates watching SCOTUS case on testers closely
Posted Date: Wednesday, October 11, 2023
The U.S. Supreme Court heard arguments this term related to a case where a civil rights tester brought an action against a hotel who failed to provide information about its accessibility features on its website. The hotel argued the tester in question does not have standing to bring the complaint, because she never intended to stay at the hotel.
While the court may avoid the question and find the case is moot (the tester dismissed the case in a lower court), the question of standing has fair housing organizations paying close attention, as many use testers to investigate accusations of discrimination in housing and home lending.
Read on for more details.
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High mortgage rates considered primary barrier to homeownership
Posted Date: Wednesday, October 11, 2023
With Freddie Mac reporting some of the highest mortgage rates this side of the millennium, it is no wonder that consumer sentiment indicates mortgage rates as the primary barrier to affordable housing – a first in the survey’s history.
Fannie Mae’s Doug Duncan shed light on what can be learned from the most recent Home Purchase Sentiment Index.
Read on for more details.
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Affordability, inventory, and technology cited as top Realtor challenges
Posted Date: Wednesday, October 11, 2023
The National Association of Realtors identified housing affordability, maintaining sufficient housing inventory, and keeping up with technology as the biggest challenges for real estate firms over the next two years.
The company’s deputy chief economist and vice president of research said with interest rates as high as they are, it is no surprise affordability surpassed inventory as the biggest concern.
Read on for more details from the report.
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Flood insurance snafu leads to RESPA complaint
Posted Date: Monday, October 9, 2023
A mortgagee’s failure to pay a borrower’s flood insurance premium resulted in a RESPA complaint in a U.S. District Court in Florida.
The issue came to a head after the homeowners suffered damage from Hurricane Ian.
Read on for more details.
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What you need to know about digital marketing compliance
Posted Date: Monday, October 9, 2023
Franzén & Salzano President Loretta Salzano and Firstline Compliance, LLC Vice President Jerra Ryan offered insight into the Consumer Financial Protection Bureau’s renewed interest in marketing service arrangements, plus recent guidance about digital marketing and lead generation.
At this year’s NS3 (National Settlement Services Summit), the pair highlighted the most relevant parts of the opinion and how industry participants can remain compliant while still fulfilling their marketing needs.
Read on for more details.
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Anywhere, RE/MAX settlement includes NAR stipulation
Posted Date: Monday, October 9, 2023
The settlements proposed by Anywhere Real Estate Inc., formerly known as Realogy Holdings Corp., and RE/MAX to resolve two antitrust class actions included not just millions of dollars in monetary relief, but changes in how the two do business with the National Association of Realtors (NAR).
The two cases, known as Burnett and Moehrl, accuse Anywhere, RE/MAX, and NAR of conspiring to “impose and enforce an anticompetitive restraint that requires home sellers to pay the broker representing the buyer of their homes, and to pay an inflated amount,” in violation of federal antitrust law and their state counterparts.
Read on for more details.
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Washington Trust, DOJ reach agreement over redlining allegations
Posted Date: Monday, October 9, 2023
Washington Trust, the oldest community bank in the nation, and the Department of Justice reached a settlement related to allegations the bank was engaging in redlining practices in Rhode Island.
While the settlement did not include any civil money penalties, Washington Trust will invest in a loan subsidy fund to help borrowers of color access credit.
Read on for more details.
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Race discrimination class action faces motion to dismiss
Posted Date: Monday, October 9, 2023
The plaintiffs in a race discrimination class action suit against the Wintrust Financial Corp. and Barrington Bank & Trust Co. in the U.S. District Court in the Northern District of Illinois alleged the lender has policies and practices that impose higher costs and fees on Black and/or African American borrowers and provides these borrowers with fewer credits to lower closing costs.
The lender filed a motion to dismiss, stating the plaintiffs failed to state a claim upon which relief can be granted.
Read on for more details.
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HUD awards funds to address economic development, housing to 4 cities
Posted Date: Monday, October 9, 2023
The U.S. Department of Housing and Urban Development awarded over $75 million in loan guarantee commitments to four cities.
The infusion of cash will go toward building stronger communities and providing inclusive, robust opportunities for low- and moderate- income individuals.
Read on for more details.
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Redfin withdraws from NAR
Posted Date: Thursday, October 5, 2023
Redfin, who joined the National Association of Realtors (NAR) in 2017, announced it would be cutting ties with the trade organization.
The company’s CEO cited concerns about commissions and buyer’s agent fees, as well as recent allegations of sexual harassment against NAR’s president, fueled the decision.
To learn more about Redfin’s reasons and NAR’s reaction, read on.
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New JV to offer services in Southeast
Posted Date: Thursday, October 5, 2023
Newrez and Onward Home Mortgage are partnering up in a joint venture to serve the Southeast.
The joint venture was possible through the Newrez Ventures platform and in partnership with Keller Williams Georgia Legacy Group.
Read on for more details.
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Race discrimination impacts about one-third of borrowers of color, study reports
Posted Date: Thursday, October 5, 2023
About one-third of Black and Hispanic respondents to Redfin’s survey on discrimination reported they believed they were discriminated against during their home search based on their ethnicity or race.
Over 5,000 residents who either moved in the last year or plan to move in the next year, or who rent their home, were polled.
Read on for more details.
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NAR Celebrates 2023 Good Neighbor Awards Finalists for Community Dedication
Posted Date: Wednesday, October 4, 2023
The National Association of Realtors (NAR) today announced the 10 finalists for its 2023 Good Neighbor Awards, which honor NAR members who make an extraordinary difference in their communities through volunteer work.
Now in its 24th year, the Good Neighbor Awards recognize volunteers who donate time, money and passion to enrich the lives of people in their communities.
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The case for (and against) Chevron
Posted Date: Monday, October 2, 2023
Chevron deference, the doctrine used by courts in matters involving government agencies, is being challenged by a case involving fishery management. The Supreme Court’s ruling could alter agency authority as we know it and how the executive branch operates – including the Consumer Financial Protection Bureau.
RESPA News listened in as Alan Kaplinsky, Ballard Spahr LLP senior counsel, consumer financial services, moderated a discussion between Jonathan Masur, University of Chicago law school professor and director of the Wachtell, Lipton, Rosen & Katz program in behavioral law, finance and economics, and Lauren Campisi, Hinshaw & Culbertson LLP partner, consumer financial services, on the potential impact of the decision.
Read on for more details.
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Deferral disagreement leads to RESPA claim
Posted Date: Monday, October 2, 2023
Jennifer Watson and her husband James brought different actions against Rushmore Loan Management and other defendants. Specifically, Jennifer alleged Rushmore violated RESPA and breached the contract that was her mortgage servicing agreement.
James sued for alleged violations of the Fair Credit Reporting Act.
The two had differing outcomes when the court considered Rushmore’s motion to dismiss.
Read on for more details.
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Slow market supported by demand-supply imbalance
Posted Date: Monday, October 2, 2023
Higher mortgage rates, mixed inflation signals, and changes in the job market have led to a unique report from Freddie Mac on what to expect on the economic, housing, and mortgage market outlook.
While total homes sales were down and existing home sales continued to decrease, new home sales saw a monthly rise and now account for a larger-than-normal percentage of total home sales than previously recorded.
Read on for more details.
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Upward trend of pending home sales ends
Posted Date: Monday, October 2, 2023
Two months of increases in the number of pending home sales have been followed by a sudden dip in the number of contracts being signed in August, the National Association of Realtors (NAR) stated in its most recent index.
These numbers are further indications that increased inventory and lower interest rates are needed for the housing market to balance itself.
Read on for more details.
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Manufactured housing committee appointments made
Posted Date: Monday, October 2, 2023
The U.S. Department of Housing and Urban Development announced appointments to its Manufactured Housing Consensus Committee.
Three new members will be joining, while three current members have been reappointed.
Read on for more details.
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