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QRM to align with QM under rule?
Posted Date: Wednesday, August 28, 2013
Regulators are proposing to harmonize the definitions of qualified residential mortgage and qualified mortgage. In the 505-page reproposed risk retention rule, the Federal Deposit Insurance Corp. seeks to base the QRM definition on the Consumer Financial Protection Bureau’s QM framework. The reproposal also requests public comment on whether regulators should narrow the QRM definition by imposing loan-to-value ratio and other standards that do not appear in the QM rule.
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CFPB announces more leadership hires
Posted Date: Wednesday, August 28, 2013
The Consumer Financial Protection Bureau announced the addition of several new members to leadership positions within the bureau, including a deputy assistant director for the Office of Regulations.
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CFPB collects more than $61 million in civil penalties
Posted Date: Wednesday, August 28, 2013
Under the Dodd-Frank Act, the Consumer Financial Protection Bureau is authorized to collect significant civil penalties for violations of consumer protection laws. A report released by the bureau indicates that the agency has no qualms about using its enforcement powers to collect extensive penalties. According to the report, the CFPB collected $61.5 million in civil money penalties from July 2011 to June 2013.
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Borrower alleges lender violated RESPA each time it collected a mortgage payment
Posted Date: Wednesday, August 28, 2013
A borrower sued his lender, alleging that the bank violated RESPA by paying kickbacks to its agents. He filed his suit well beyond RESPA’s one-year statute of limitations, but argued that his claims should be tolled. In support of his argument, he claimed that each mortgage payment the lender collected from him was a continuous violation. Read on to find out more.
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Force-placed insurance still being scrutinized by New York
Posted Date: Wednesday, August 28, 2013
The New York State Department of Financial Services sent an Aug. 21 letter to all licensed insurance producers warning them that force-placed insurance tracking services violate New York insurance law.
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Social media strategies for title professionals - Webinar
Posted Date: Monday, August 26, 2013
The Title Report and sponsor North American Title Insurance Co. are offering a 90-minute webinar on Sept. 12 to train title professionals on how to take their social marketing to the next level. This webinar will provide instruction on which social media sites to utilize, their practical applications and how to build trust among clients.
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How are your record retention procedures?
Posted Date: Monday, August 26, 2013
If you regularly work with RESPA disclosures like the Good Faith Estimate and HUD-1 Settlement Statement, then you know that you have to retain the forms in your records for a certain period of time. In the future, when the Consumer Financial Protection Bureau releases the final RESPA/Truth in Lending Act integrated disclosure rule, those time-periods are likely to change, and with the bureau cracking down on regulatory compliance, it’s a good idea to know how long records must be retained and what your company’s record retention procedures are.
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8th Circuit finds rescission right ended at foreclosure sale
Posted Date: Monday, August 26, 2013
When a group of borrowers filed a lawsuit, alleging that they notified their lender in writing that they were rescinding their loan under the Truth in Lending Act, the 8th U.S. Circuit Court of Appeals determined that right of rescission terminated when the home was sold through foreclosure.
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Morgan Drexen asks court for restraining order against CFPB
Posted Date: Monday, August 26, 2013
Morgan Drexen Inc. filed a lawsuit against the Consumer Financial Protection Bureau on July 22, alleging that the CFPB’s structure is unconstitutional. At the time the suit was filed, the CFPB was investigating the company for its alleged debt settlement services and considering an enforcement action. According to the company, the District Court for the District of Columbia told the bureau that it should hold any enforcement action until it determined whether the CFPB is unconstitutional. However, the bureau filed a lawsuit against Morgan Drexen on Aug. 20 in California federal court. Now, the company is asking the D.C. district court to stop the bureau’s enforcement action.
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Title agencies lose registration for alleged RESPA violations, sue regulator
Posted Date: Thursday, August 22, 2013
Two Illinois title agencies who had their registrations permanently revoked for alleged RESPA violations sued the state’s Department of Professional Regulation. After a trial court affirmed the actions of the department, the agencies appealed, arguing that their due process rights were violated in the administrative proceedings. Read on for the opinion of the Appellate Court of Illinois, First District, Second Division.
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Morgan Drexen sued for allegedly deceiving consumers
Posted Date: Thursday, August 22, 2013
The Consumer Financial Protection Bureau filed a lawsuit in federal district court on August 20 against a Nevada corporation, Morgan Drexen Inc., and its president and chief executive officer, Walter Ledda, alleging the company charged illegal upfront fees and deceived consumers. The CFPB says the company falsely claims that it does not charge consumers upfront fees for debt-relief services and falsely represents to consumers that they will become debt free in months if they work with Morgan Drexen.
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Mortgage servicing risks highlighted in CFPB report
Posted Date: Thursday, August 22, 2013
When the Consumer Financial Protection Bureau assumed authority to regulate RESPA, it also began supervising entities that are subject to RESPA’s requirements. Those entities include mortgage servicers. Servicers collect payments and handle customer service, escrow accounts, loan modifications and foreclosures. RESPA sets forth a number of mandates that servicers must follow. In a report the CFPB released on August 21, the bureau indicated that it found several RESPA violations when conducting reviews of mortgage servicers.
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Have an AfBA? Don’t forget the disclosure
Posted Date: Thursday, August 22, 2013
Although RESPA Sections 8(a) and (b) prohibit business referrals and fee splitting, affiliated business arrangements are allowed through an exception in Section 8(c). Under Section 8(c)(4), AfBAs are permitted as long as certain conditions are met. One of those conditions is that a disclosure must be provided that notifies the borrower of the arrangement. Providing the disclosure is important for a couple of reasons. First, the Consumer Financial Protection Bureau can penalize a company for failing to provide the AfBA disclosure. Second, under a recent 8th U.S. Circuit Court of Appeals decision, a lack of notice could provide a consumer with standing to sue when alleging an informational injury.
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Servicer argues attorney used QWR as litigation tactic
Posted Date: Monday, August 19, 2013
In a lawsuit against Wells Fargo Bank NA, the plaintiff claimed that the bank failed to respond to his qualified written request. Wells Fargo argued that the plaintiff defaulted on his loan in July 2011 and that his attorney sent the QWR in February 2013 as a litigation tactic. The court determined that the plaintiff did not show that damages he sustained were a result of Wells Fargo’s alleged RESPA violation, and gave the plaintiff additional time to amend his complaint.
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Mortgage personnel must understand RESPA
Posted Date: Monday, August 19, 2013
The Consumer Financial Protection Bureau released, on Aug. 15, a second update to its exam procedures for the new mortgage regulations it issued in January 2013. According to the list of procedures, examiners will be assessing whether mortgage personnel within financial institutions are knowledgeable about RESPA and Regulation X requirements.
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SoftPro announces new sales and marketing leadership
Posted Date: Monday, August 19, 2013
SoftPro, a provider of closing and title software, announced the hiring of Patrick Hempen as its Senior Vice President of Sales and Marketing. Hempen will lead a team of sales, marketing and support professionals throughout the United States.
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Standing case could affect RESPA actions
Posted Date: Monday, August 19, 2013
The 8th U.S. Circuit Court of Appeals held in an Aug. 2 decision that an informational injury is sufficient to confer standing. Under this holding, plaintiffs do not have to prove an economic injury in order to have standing to sue for statutory damages.
“It will make it much easier for consumers to prove they have standing because an informational injury merely means that a consumer was not provided some sort of disclosure that was required under federal law, and if that disclosure provides for statutory damages then it takes out the actual damages or losses that some courts might claim a consumer must show under injury in fact,” Marx Sterbcow, managing partner of Sterbcow Law Group LLC, told RESPA News.
Although the 8th Circuit’s decision in Charvat v. Mutual First Federal Credit Union does not expressly reference RESPA, it could still have an effect on lawsuits alleging RESPA violations.
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When gifts and entertaining can get you into trouble
Posted Date: Wednesday, August 14, 2013
When it comes to RESPA, you need to be aware that giving gifts or providing entertainment in exchange for a referral of business can lead to trouble. During a session about joint ventures at October Research LLC’s National Settlement Services Summit, some of the audience had questions about what kind of entertainment is allowed under RESPA. Attorneys Jeffrey Arouh and Marx Sterbcow provided some information regarding RESPA’s prohibition against providing compensation for referrals of business.
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Senator questions CFPB’s data collection efforts
Posted Date: Wednesday, August 14, 2013
Sen. Mike Crapo, R-Idaho, held a news conference at the Idaho Statehouse in Boise seeking to increase public awareness regarding the Consumer Financial Protection Bureau’s data collection activities. Crapo voiced concern over the bureau’s effort to collect and secure massive amounts of consumer data.
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HUD and Treasury release July housing scorecard
Posted Date: Wednesday, August 14, 2013
The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury released the July edition of the Obama administration’s housing scorecard. The latest data show progress across many key indicators — as home prices, purchases of new homes and sales of existing homes continue to show strong annual gains — although officials caution that the overall recovery remains fragile.
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New Jersey paralegal admits to participating in $2M fraud
Posted Date: Wednesday, August 14, 2013
A New Jersey paralegal admitted participating in a long-running, large-scale mortgage fraud scheme that defrauded financial institutions of at least $2 million. The fraud involved preparing inaccurate HUD-1 Settlement Statements. Read on for more details.
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Beware the markup
Posted Date: Monday, August 12, 2013
If you are at all familiar with RESPA, then you know that the splitting of unearned fees is a no-no under Section 8(b). You probably also know that the U.S. Supreme Court made it clear that unearned, undivided fees are not a violation of RESPA. What hasn’t been made clear is how fee markups will be treated. The U.S. Circuit Courts of Appeals are currently split on if markups violate RESPA. If you are in an area where markups are considered a violation, you may want to be cautious when setting fees for services provided by third-party vendors.
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NMLS 2013 mortgage industry reports released
Posted Date: Monday, August 12, 2013
The Conference of State Bank Supervisors released its 2013 first quarter reports on state-licensed and federally registered mortgage entities in the Nationwide Mortgage Licensing System & Registry.
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CFPB investigating PNC over loan pricing
Posted Date: Monday, August 12, 2013
PNC Financial Services Group announced that it is under investigation by the Consumer Financial Protection Bureau and the Department of Justice for its mortgage loan services.
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State worried about CFPB mortgage servicing rules
Posted Date: Monday, August 12, 2013
In a comment letter to the Consumer Financial Protection Bureau regarding the bureau’s 2013 mortgage servicing rules, the New York State Department of Financial Services said the 120-day pre-foreclosure review period mandated in Section 1024.41(f) is of concern.
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False HUD-1 forms used in $3.5M mortgage fraud conspiracy
Posted Date: Thursday, August 8, 2013
A Connecticut attorney pleaded guilty to conspiracy charges stemming from his role in an extensive mortgage fraud scheme that involved the use of false mortgage applications, false HUD-1 forms and fraudulent down payments. His actions cost an estimated $3.5 million in losses. Read on for more details.
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Couple tells court that numerous GFEs are confusing
Posted Date: Thursday, August 8, 2013
When a lender filed for bankruptcy, a couple petitioned the court, alleging violations of RESPA. The couple said the lender received unreasonable fees and sent numerous Good Faith Estimates, which the couple found confusing. They also claimed the lender forged their signatures on the HUD-1 Settlement Statement. The bankruptcy court found no valid RESPA violations existed. Read on to find out why.
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Are affiliated business arrangements still a viable option?
Posted Date: Thursday, August 8, 2013
If you currently have an affiliated business arrangement or are considering one, you know how important it is to make sure the AfBA is compliant with federal and state law. You also know that laws can be long, complicated and technical. The Consumer Financial Protection Bureau took over the regulation of the settlement services and mortgage lending industries, and has made some significant changes. Not only is the bureau promulgating new regulations left and right, it is also taking its enforcement authority very seriously. The agency is on the lookout for joint ventures that violate federal consumer laws. With this regulatory crack-down, are joint ventures and AfBAs still a viable option? The answer is yes, but it may not be simple.
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Are you vulnerable to the latest fraud schemes? - Webinar
Posted Date: Monday, August 5, 2013
Staying ahead of the many nefarious acts fraudsters use to steal funds and damage systems is tough for any title insurance and settlement services company. Are you up to date on the latest fraud schemes threatening your business and the best strategies for prevention? The Title Report and sponsor Rynoh Live have teamed up to provide the industry with a 90-minute in-depth, instructional webinar on Aug. 22 to teach title insurance professionals about the types of fraud schemes attacking the industry, as well as how to protect your accounts and transactions.
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Wells Fargo withdraws from the mortgage joint venture business
Posted Date: Monday, August 5, 2013
Wells Fargo Ventures LLC plans to withdraw from its eight joint ventures in mortgage lending. The decision was effective July 25 and is expected to be completed over the next 12 to 18 months. No impact on customer service or loan processing is expected.
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Lawmakers question actions by past CFPB leadership
Posted Date: Monday, August 5, 2013
Four lawmakers who chair various congressional committees and subcommittees told Consumer Financial Protection Bureau Director, Richard Cordray, that they continue to be concerned about the bureau’s lack of transparency and news that several of the CFPB’s senior leaders have left to form a company that profits from the rules created by the agency.
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Lawsuit challenging CFPB dismissed
Posted Date: Monday, August 5, 2013
A lawsuit challenging the constitutionality of certain sections of the Dodd-Frank Act and Richard Cordray’s appointment as director of the Consumer Financial Protection Bureau has been dismissed by the U.S. District Court for the District of Columbia. The court found that the group of plaintiffs, which included 11 U.S. states, did not have standing to bring their case. The plaintiffs’ attorneys say the court’s ruling is severely flawed, and they plan to appeal.
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Court determines contract incorporated RESPA escrow requirements
Posted Date: Monday, August 5, 2013
Two borrowers argued that their deed of trust incorporated RESPA and that their mortgage loan servicers breached the contract by failing to adhere to the RESPA requirements pertaining to the management of escrow funds. The court agreed with the borrowers that the contract incorporated certain RESPA sections and the corresponding regulations. The court determined, however, that the plaintiffs’ breach of contract claim was not valid. Read on to find out why.
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Assignee lenders not held liable for missing disclosures
Posted Date: Thursday, August 1, 2013
A couple sued their lender, claiming that they wanted to rescind their mortgage loan because they did not receive the required Truth in Lending disclosures. The court found that because the lenders were assignees of the loan, they were not liable for defects in the disclosures unless the defects were apparent on the face of the documents. In this case, the loan file contained acknowledgments that both borrowers received the necessary disclosures, which the court said the assignee lenders could rely on as proof that the borrower actually received the disclosures.
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Federal appeals court finds servicer exempt from TILA disclosure requirements
Posted Date: Thursday, August 1, 2013
A couple filed a class action suit against Chase Home Finance, alleging the bank violated the Truth in Lending Act by not informing them that their mortgage had been assigned to it. Chase argued that it is exempt from TILA’s disclosure requirements. The 11th Circuit Court of Appeals agreed. Read on to find out why.
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Committee approves FHA Solvency bill
Posted Date: Thursday, August 1, 2013
The Senate Banking Committee approved the FHA Solvency Act on July 31. The bill is supposed to promote long-term solvency, stabilize the reverse mortgage program and improve lender liability.
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Voters split on marketing agreement use
Posted Date: Thursday, August 1, 2013
RESPA News asked readers in a June/July poll if their company uses a marketing service agreement. There have been indications that the Consumer Financial Protection Bureau is currently investigating the use of certain marketing agreements and could come out with guidance or an enforcement action soon. It’s always a good idea to be aware of the terms of your marketing agreement and understand state and federal law, including RESPA.
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