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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly November 2017
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Butler Snow recognized by 2017 LMG Life Sciences awards
Posted Date: Thursday, October 19, 2017
Butler Snow announced the firm has been recognized by the 2017 LMG Life Sciences Awards as “Highly Recommended” for U.S. product liability litigation and shortlisted for “Product Liability Law Firm of the Year” in the U.S.
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RESPA plaintiff pleads damages, survives motion to dismiss
Posted Date: Thursday, October 19, 2017
In a RESPA case concerning a servicer’s compliant response to a qualified written request the borrower alleged the servicer’s failure to adequately respond to the QWR led to actual damages.
A federal district court in Ohio examined first whether the response was sufficient. Once it determined that the servicer had not complied with RESPA in its response, the court addressed the claim of actual damages.
In doing so, the court upheld the borrower’s claims of actual damages and allowed the RESPA complaint to survive a motion to dismiss from the servicer. What did the borrower choose for actual damages to survive the motion? Read on for the answer.
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CFPB’s next frontier: Reverse mortgages?
Posted Date: Thursday, October 19, 2017
With its long-awaited payday lending rule and arbitration rule now finalized, many industry observers are wondering what the next area the Consumer Financial Protection Bureau will focus its rulemaking work toward.
In a recent announcement, the CFPB might have tipped its hand on what that next step could be.
Could the CFPB be working on a new regulatory framework for reverse mortgages? Read on for more details that could be gleaned from the bureau’s latest announcement.
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CFPB finds value in student loan complaints
Posted Date: Thursday, October 19, 2017
In a new report from the Consumer Financial Protection Bureau, the agency says it received more than 20,000 complaints from student loan borrowers regarding loan servicing problems, and that actions the CFPB has taken have provided more than $750 million in relief for borrowers.
The details come in the wake of the Department of Education ending a memoranda of understanding with the CFPB, in part because the bureau did not refer complaints to the Education Department.
Read on for more details of the CFPB’s report.
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NAMB elevates new president
Posted Date: Thursday, October 19, 2017
NAMB announced that its former president-elect has been appointed to the role of president.
The trade association, which represents the interests of individual mortgage loan originators and small to mid-size mortgage businesses, said the president will spearhead NAMB’s overall strategies to grow the organization’s reach by expanding its membership and enhancing the opportunities it makes available to members, homeowners and the mortgage industry’s community of individual loan originators and small to mid-size businesses.
Read on for more information about the new appointment.
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Servicing materials updated
Posted Date: Thursday, October 19, 2017
The Consumer Financial Protection Bureau announced that it updated compliance tools for the industry to support implementation of the recently issued interim final rule for mortgage servicing.
Read on for more about the updates.
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Treliant expands with addition of Chandler
Posted Date: Thursday, October 19, 2017
Treliant Risk Advisors announced that Cassandra “Cassi” M. Chandler has joined the firm as a Senior Advisor, bringing experience as a risk executive at a major bank and as a financial crimes enforcement leader at the Federal Bureau of Investigation (FBI).
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Intent to proceed, financial emergency among TRID troubles
Posted Date: Monday, October 16, 2017
In the latest edition of the Consumer Financial Protection Bureau’s (CFPB) Supervisory Highlights, the bureau for the first time addressed lessons learned from examinations done under the new TILA-RESPA Integrated Disclosure (TRID) rule.
In this report, RESPA News details two more sections pointed out in the report, one involving the consumer’s intent to proceed with a transaction, and the expected difficulties with knowing what constitutes a “bona fide personal financial emergency.”
Read on for more insight on the CFPB’s citations.
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Carson committed to resolving ‘ridiculous’ False Claims Act use
Posted Date: Monday, October 16, 2017
In a recent hearing before the House Financial Services Committee, Department of Housing and Urban Development (HUD) Secretary Ben Carson was asked about his view on HUD’s use of the False Claims Act in enforcement actions against Federal Housing Administration lenders.
The questioning came from Rep. David Trott (R-Mich.), the former title agent owner who recently announced he would not run for a third term in Congress.
Read on for details of the conversation, and Carson’s belief in the “ridiculous” False Claims Act use.
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Borrower sues over non-response to QWRs
Posted Date: Monday, October 16, 2017
A borrower who entered into a trial loan modification was approved for a permanent modification by his servicer. However, upon reviewing the permanent modification, the borrower objected to the inclusion of a lump sum payment.
After twice sending a request for information to the servicer that was unanswered, the borrower sued for violations of RESPA, among other complaints.
Read on for details of how the New Jersey district court ruled on the RESPA count.
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Ocwen reaches agreements with 2 new states
Posted Date: Monday, October 16, 2017
Ocwen Financial Corp. announced that it is continuing to reach timely resolutions to regulatory actions taken to the company by mortgage and banking regulatory agencies from 30 states and the District of Columbia.
On Thursday the company said it had reached settlements with two new states.
Read on to find out which states have settled, along with reaction from the company.
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Bipartisan bills headed to full House
Posted Date: Monday, October 16, 2017
The House Financial Services Committee passed 22 bills to the full House this week, many of them bipartisan fixes aimed at community banks, credit unions and emerging companies, the committee stated.
“The vast majority of these bills – 78 percent – already have bipartisan support, and I am hopeful that by the time we are finished debating them, all will have bipartisan support,” Chairman Jeb Hensarling (R-Texas) said in opening remarks.
One bill addressed a change in RESPA. Read on to find out more about that and the rest of the mark-up process.
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MBA behind 1031 exchanges in tax reform
Posted Date: Monday, October 16, 2017
The Mortgage Bankers Association (MBA) has signaled its support for the work being done on comprehensive tax reform, writing to key lawmakers that this was a “once in a generation opportunity” to overhaul the tax code.
The letter from MBA President and CEO David Stevens highlighted MBA’s support of the recently released framework, which keeps the mortgage interest deduction and low-income housing tax credit.
However, Stevens said the potential elimination of 1031 like-kind exchanges raised “significant concerns.” Read on for more about MBA’s support for 1031 exchanges.
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Ocwen engages Christopher Whalen as senior consultant
Posted Date: Friday, October 13, 2017
Ocwen Financial Corp., a leading financial services holding company, announced today that it has engaged Christopher Whalen, Chairman of Whalen Global Advisors LLC, as a senior consultant and advisor to the company.
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Optional TRID compliance now effective
Posted Date: Thursday, October 12, 2017
Lenders and technology providers this week could begin complying with the new amendments to TRID, as part of the Consumer Financial Protection Bureau’s clarifications finalized this summer.
The rule for the TRID amendments took effect Oct. 10, although the mandatory compliance date for the entirety of the rule remains Oct. 1, 2018.
Read on for reasons which the bureau felt the optional compliance period could help the industry.
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Credit unions support black hole proposal
Posted Date: Thursday, October 12, 2017
As the deadline for submitting comments on the Consumer Financial Protection Bureau’s (CFPB) proposal to resolve the black hole issue in TRID came to a close, two credit union trade associations wrote that they supported the CFPB’s efforts.
The proposed amendment would allow creditors to compare charges paid by or imposed on a consumer with amounts disclosed on a Closing Disclosure – rather than a Loan Estimate – to determine if the estimated closing cost was disclosed in good faith. It also would remove the four-business-day limit for providing Closing Disclosures.
Read on to see why the credit union associations are behind the proposal.
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FTC director backs more administrative litigation
Posted Date: Thursday, October 12, 2017
The Federal Trade Commission’s acting director of the Bureau of Consumer Protection, Thomas Pahl, recently spoke to the National Advertising Division annual conference in New York.
In his prepared remarks, Pahl – who first joined the FTC in 1990 and spent two decades with the agency before moving into private practice, then rejoining in his current position in February – discussed the merits of administrative litigation as the FTC works to fight fraud.
Read on to see why Pahl believes the FTC, and consumers, would be best serve by the agency increasing administrative litigation.
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CSBS, Fed release annual bank survey
Posted Date: Thursday, October 12, 2017
The Conference of State Bank Supervisors (CSBS) and the Federal Reserve recently released results of an annual national survey of community bankers.
The results were presented at the fifth annual Community Banking in the 21st Century Research and Policy Conference held at the Federal Reserve Bank of St. Louis.
“I am encouraged by the results in this year’s survey of community bankers, which suggest that the sector, after many years of tumult, might be achieving stability,” CSBS Chairman Albert L. Forkner said in the report. Read on for more.
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Bureau updates small entity guide
Posted Date: Thursday, October 12, 2017
The Consumer Financial Protection Bureau announced that is has published an updated version of the TRID small entity compliance guide.
The updated version incorporates amendments and clarifications that were finalized in rulemaking this summer.
Read on for details about the updates and where to find the small entity compliance guide online.
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Arkansas’ Hill brings new TRID bill to House
Posted Date: Monday, October 9, 2017
The congressional member who led the way for the House to pass a TRID hold-harmless bill in 2015 has introduced a new TRID bill looking to correct the disclosure of simultaneous title insurance.
The TRID Improvement Act of 2017, which was discussed during a meeting of the House Financial Institutions and Consumer Credit Subcommittee in September, modifies requirements related to mortgage disclosures and offers clarification to consumers and regulatory relief to financial institutions.
Read on for more about the bill and reaction from co-sponsor Rep. French Hill (R-Ark.).
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Ocwen reaches settlements with states
Posted Date: Monday, October 9, 2017
Ocwen announced that it has reached settlements with 12 states over actions taken against the company in the spring, following public enforcement actions handed out by the Consumer Financial Protection Bureau, among others.
The settlements contain similar terms, including Ocwen’s need to transition to a new servicing system, and its pledge not to acquire new mortgage servicing rights until 2018.
Read on for more about the settlement and reaction from the company.
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CFPB rule addresses servicing notices
Posted Date: Monday, October 9, 2017
The Consumer Financial Protection Bureau issued an interim final rule and proposed a rule designed to provide mortgage servicers with certainty in communicating with borrowers.
The interim final rule gives servicers more flexibility regarding when to communicate about foreclosure prevention options with borrowers who have requested a cease in communication under federal debt collection law.
Read on for more about the moves and the new window to provide modified notices.
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Borrower sues after no response from QWR
Posted Date: Monday, October 9, 2017
A borrower whose home fell into foreclosure tried to cure the default through bankruptcy, and eventually filed a loan modification application, which was denied.
The borrower sent a qualified written request (QWR) to the servicer for information about his loan, and when the servicer never replied, he sued for violations of RESPA.
Read on to see whether the Wisconsin court agreed that the borrower submitted a QWR to which the servicer did not respond compliantly.
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Maryland, HUD settle complaint
Posted Date: Monday, October 9, 2017
Six years after a complaint was filed by the Baltimore Regional Housing Campaign against the Department of Housing and Urban Development, the sides announced an agreement.
The deal will resolve the discrimination complaint, which challenged the fairness of Maryland’s low-income housing tax credit program.
Read on for more about the settlement and how it is expected to streamline the creation of affordable housing in higher opportunity neighborhoods in the Baltimore region.
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Report: On-time settlements near two-year high
Posted Date: Monday, October 9, 2017
The latest report from the National Association of Realtors shows that Realtors continue to see improvements made on home closings nearly two years after the TILA-RESPA Integrated Disclosure (TRID) rule took effect.
On-time settlements and delayed settlements are down just slightly from post-2015 highs reached this spring, but the termination rate reported is by far the lowest level since the start of 2015.
Read on for more insight from the latest report.
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Ballard Spahr, LSKS announce merger
Posted Date: Thursday, October 5, 2017
Am Law 100 firm Ballard Spahr and Levine Sullivan Koch & Schulz (LSKS) — the preeminent First Amendment and media law boutique in the United States — have merged.
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Experienced business attorney Wardega joins McDonald Hopkins
Posted Date: Tuesday, October 3, 2017
Frank Wardega has joined the Cleveland office of McDonald Hopkins LLC, a business advisory and advocacy law firm, as a member in the Business Department. He comes to McDonald Hopkins from Kohrman Jackson & Krantz LLP.
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Stay compliant in TRID exams
Posted Date: Monday, October 2, 2017
In the latest edition of the Consumer Financial Protection Bureau’s (CFPB) Supervisory Highlights, the bureau for the first time addressed lessons learned from examinations done under the new TILA-RESPA Integrated Disclosure (TRID) rule.
In the report, the CFPB detailed some of the errors which examiners found at one or more institutions related to TRID. It also detailed where in the TRID rule those errors related, and RESPA News is going to walk through findings to provide refreshers for readers to help them remain compliant.
The first areas discussed involve tolerances and record-keeping. Read on for details of what the CFPB noted for the industry.
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Class action overdraft ruling under review
Posted Date: Monday, October 2, 2017
After a district court ruled that a bank must tackle a case surrounding overdraft charges as a class action lawsuit, rather than being able to enforce an arbitration provision in its customer contract, the bank appealed.
The 11th Circuit Court of Appeals reviewed the case to determine whether the district court’s ruling – denying the motion to compel arbitration on grounds of unconscionability – was valid.
To do so, the appellate court had to review state law surrounding the case in Washington, where the customer did banking, and Ohio the state agreed to in the parties’ choice-of-law provision. Read on for the ruling.
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Insight: LOS still need eSignature improvements
Posted Date: Monday, October 2, 2017
In the latest Stratmor Insights report, the company dug into results from its most recent Technology Insight survey to find out how lenders felt about the performance from their loan origination systems (LOS).
More than half of survey respondents said their LOS’ eSignature capabilities did not rank as adequately or highly effective.
The survey also set out to determine how effective an LOS was in delivering compliance functionality. Read on for more insights from the report.
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Lawsuit challenges arbitration rule
Posted Date: Monday, October 2, 2017
The U.S. Chamber of Commerce and a group of financial services trade associations have filed a lawsuit against the Consumer Financial Protection Bureau and Director Richard Cordray to halt implementation of the recently finalized arbitration rule.
The lawsuit claims the rule effectively precludes the use of arbitration agreements in disputes over consumer financial products and services.
Read on for more details about the lawsuit and reaction from one of the associations which are behind the action.
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Bureau points out HMDA highlights
Posted Date: Monday, October 2, 2017
The newest data collected from institutions covered by the Home Mortgage Disclosure Act (HMDA) has been released, covering the 2016 period and more than 6,700 reporting institutions.
The Consumer Financial Protection Bureau (CFPB) set out in a blog post to help ease understanding.
In the CFPB post the bureau urged caution in ways of comparing HMDA data, while looking at the year-over-year changes in number of reporting institutions, total originations and originations made to certain demographics. Read on to find out more about what the latest information says.
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House flood insurance bill stripped by Senate
Posted Date: Monday, October 2, 2017
The House passed a bipartisan flood insurance effort that would lay the groundwork for the creation of private flood insurance markets.
The Flood Insurance Market Parity and Modernization Act, sponsored by Reps. Dennis Ross (R-Fla.) and Kathy Castor (D-Fla.), was included as part of a bill to reauthorize the Federal Aviation Administration. Although that reauthorization would eventually pass both chambers, the Senate struck out the Flood Insurance Market Parity and Modernization Act before passing the bill.
The bill found support on both sides of the aisle in the House, as well as from the Mortgage Bankers Association. Read on for details about the effort.
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Report: TRID not top reason for loan defects
Posted Date: Thursday, September 28, 2017
Lenders have made major improvements in mitigating risks from compliance with the TILA-RESPA Integrated Disclosure over the past year, according to a new report from ARMCO.
In its Q1 Trends Report, ARMCO found that the improvement in compliance with TRID shifted the leading critical defects in loans away from legal, regulatory and compliance issues.
The report found that in the first quarter, the top defect category was borrower and mortgage eligibility, which was 24 percent of all reported critical defects. Read on for more on the top defect categories, and insight behind the reasons for the shift.
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RESPA at heart of title enforcement action
Posted Date: Thursday, September 28, 2017
Citing a failure to properly disclose an affiliated business arrangement to consumers over a three-year period, the Consumer Financial Protection Bureau (CFPB) handed down an enforcement action to one of the largest independent title agents in the country.
The action comes with a $1.25 million penalty for consumer redress to what the CFPB estimates is more than 7,000 affected consumers from 2014-2016.
Read on for details about the arrangement the CFPB found at issue, as well as input from RESPRO.
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OIG finds room for improvement in CFPB examiner training
Posted Date: Thursday, September 28, 2017
A report from the Federal Reserve Office of the Inspector General (OIG) found that there is room for the Consumer Financial Protection Bureau to improve its commissioning and training of supervisory examiners.
The report stated that the bureau’s Supervision, Learning and Development group has worked to enhance its Examiner Commissioning Program since it began in the fall of 2014, but OIG’s report listed six areas in which improvements to efficiency could be made.
Read on for details on the six findings from the inspector general’s report.
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Dispute centered on complete loan modification application
Posted Date: Thursday, September 28, 2017
A borrower who filed a loan modification with their servicer alleged violations of RESPA when the servicer prepared to foreclose on the property.
The servicer alleged that the borrower failed to sufficiently allege that she submitted a complete loss mitigation application and that she failed to allege actual damages.
Read on to find out how the District Court in the Eastern District of Texas ruled and whether the loan modification application was determined to be complete.
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NAR cautions against tax reform proposal
Posted Date: Thursday, September 28, 2017
After the release of the outline for comprehensive tax reform by Congress and the White House, the National Association of Realtors (NAR) said the plan could lead to a tax on homeownership for millions.
Because of proposals for change within the tax code, NAR said that the result of the plans would “all but nullify” the incentive to purchase a home for most potential buyers.
Read on for more about NAR’s reaction, including comment from NAR President William E. Brown.
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AML, third-party oversight hold similarities
Posted Date: Monday, September 25, 2017
Anti-money laundering and third-party risk management are two practice areas where risk officers, attorneys and compliance officers within the settlement services industry need to remain diligent, according to representatives from U.S. audit, tax and advisory firm KPMG LLP.
RESPA News spoke with Teresa Pesce, a principal in KPMG’s Forensic Advisory Services practice and global head of AML Services, and Greg Matthews, a partner who leads KPMG’s Third Party Risk Management services.
Read on to learn more about what they pair thought were similarities in the practice areas.
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Can servicer give more info for QWR receipt than required?
Posted Date: Monday, September 25, 2017
After losing his case in district court, a borrower in Georgia appealed the case to the U.S. Court of Appeals, Eleventh Circuit, saying the qualified written request he sent his servicer was not properly answered and that he was not provided with a compliant address to which he could send the request.
The appellate court looked at the language from the servicer detailing where requests for information should be directed to see whether the district court ruled correctly.
Read on for more about the case to see whether the servicer complied with Regulation X when it directed borrowers to send correspondence about their loans.
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NMLS undergoing major redesign
Posted Date: Monday, September 25, 2017
The Conference of State Bank Supervisors (CSBS) announced that it has launched a major redesign of the Nationwide Multistate Licensing System (NMLS), the core technology platform used by state bank regulators.
The redesign will enable regulators to transform the licensing and supervision of non-bank financial institutions, including fintechs, CSBS said.
Read on for more about what the new technology will mean for regulators and examiners, as well as those non-bank financial institutions who are licensed by NMLS.
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Reg compliance meets in D.C.
Posted Date: Monday, September 25, 2017
The Mortgage Bankers Association announced that more than 800 compliance officers and interested parties gathered for the recent annual Regulatory Compliance Conference at the Grand Hyatt in Washington, D.C.
MBA said attendees had had the opportunity to hear from the regulators and policymakers in D.C., including legislative updates and panels on the Consumer Financial Protection Bureau.
Read on for details of what was addressed and which top bureau official was among the featured speakers during the conference.
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Cordray speech highlights role as protector
Posted Date: Monday, September 25, 2017
In a speech closely watched for its potential as a lead-up to announcing a run for Ohio governor, Consumer Financial Protection Bureau Director (CFPB) Richard Cordray recently spoke before the Ohio Land Bank Conference.
Referencing common themes in previous public speeches, Cordray highlighted the amount of money made available to harmed consumers since the CFPB opened its doors, as well as the way the agency has shifted the landscape in the mortgage market.
Among the highlights he mentioned was the CFPB’s work helping harmed consumers navigate solutions to their problems. Read on for more from the director’s public appearance in Ohio.
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NAR rep: Protect homeownership during tax reform
Posted Date: Monday, September 25, 2017
As Congress and the White House have looked into potential paths forward on tax reform, one of the areas discussed has been the mortgage interest deduction on homes.
At a recent hearing before the Senate Finance Committee, the chairwoman of the Federal Taxation Committee of the National Association of Realtors (NAR) said history showed that misguided tax reforms could threaten the economy.
Read on to see what cautionary tales NAR brought to the tax reform discussion on the Hill.
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