|
|
News By Edition
|
RESPA News Monthly Edition
RESPA News Monthly
September 2023
|
|
Arguments made in Townstone ECOA case
Posted Date: Thursday, August 17, 2023
The legal team defending Townstone Financial, a small non-bank mortgage lender in Chicago, filed its brief in the U.S. Court of Appeals for the Seventh Circuit, responding to the Consumer Financial Protection Bureau’s (CFPB) appeal filed earlier this year.
The filing is the most recent in the saga that began in 2017, when the CFPB sent Townstone’s owner Barry Sturner a civil investigative demand under suspicion of violating the Equal Credit Opportunity Act.
Read on to learn the arguments.
|
|
|
Joint venture, AfBA 101: Setting up a RESPA compliant model
Posted Date: Monday, October 16, 2023
RESPA’s Section 8(c) exemption created three basic requirements for affiliated business arrangements (AfBAs): disclosure at the time of referral, the consumer must be aware of their right to shop around for the service, and involved parties can only receive returns based on their ownership interest as a thing of value.
This explanation is similar to School of Rock’s “I’m just a Bill” – while not wrong, there is a bit more to it than just what the text says. While Section 8(c)(4) is all that is required by the statute, the agencies who have regulated RESPA through the decades also have put out their own opinions and interpretations of what an AfBA needs to do – or avoid – to stay compliant.
Click for more articles from The ABCs of RESPA: Getting Back to Basics report.
|
|
|
NAR announces 2024 Leadership Academy class
Posted Date: Thursday, August 31, 2023
The NAR today announced its 2024 Leadership Academy class.
Twenty Realtors from across the country have been chosen to participate in the year-long program, which prepares emerging state and local volunteers for future leadership positions at NAR.
|
|
|
Scammed borrower brings RESPA case against Federal Savings, PHH Mortgage
Posted Date: Thursday, August 24, 2023
The U.S. District Court for the District of Idaho ruled on a motion to dismiss a RESPA complaint from Federal Savings Bank, the master servicer on a loan where the borrower was scammed into sending her mortgage payment to a false entity.
After failed modification attempts, the borrower filed the present suit. Federal Savings argued it could not be vicariously liable as the master servicer.
Read on for more details.
|
|
|
Bank of America wins appeal in Illinois case alleging predatory lending
Posted Date: Thursday, August 24, 2023
In the most recent decision in the series of decisions related to Cook County, Ill., the county’s argument that large banks operating there made credit too readily available to some borrowers, resulting in default and foreclosure that hurt the county, did not fare well in the U.S. Court of Appeals for the Seventh Circuit.
The county filed its suit in 2014 under the Fair Housing Act, alleging Bank of America, among other large banking institutions, targeted potential minority borrowers for “unchecked or improper credit approval decisions, which allowed [them] to receive home loans they could not afford….”
Read on for more details.
|
|
|
Homelessness surge avoided during pandemic, despite historic ‘worst-case needs’ numbers
Posted Date: Thursday, August 24, 2023
Two reports from the U.S. Department of Housing and Urban Development showed how pandemic relief offered through federal programs prevented a rise in evictions and homelessness despite historic housing needs during the national emergency and the highest number of consumers experiencing “worst-case housing needs” ever recorded.
According to the data, 8.53 million households had worst-case housing needs, surpassing 2011’s record high of 8.48 million and 70 percent greater than the 5.01 million households with worst-case housing needs in 2001.
Read on for more details.
|
|
|
Refinance activity low, housing market sees rebound in home prices
Posted Date: Thursday, August 24, 2023
Freddie Mac’s Economic, Housing, and Mortgage Outlook, prepared by its Economic and Housing Research Group, found home sales have slowed because the 30-year fixed-rate mortgage rate has stayed above 6.5 percent since May.
“Existing home sales declined 19 percent from a year ago, while new home sales were up 23.8 percent over the year,” the outlook stated. “Monthly new home sales numbers are volatile and fell for the first time since February, down 2.5 percent over the month. And yet the market remains undersupplied given the current demand, partially due to the mortgage rate lock-in effect.”
Read on for more details.
|
|
|
Prospective homebuyers continue to face affordability issues
Posted Date: Thursday, August 24, 2023
The Mortgage Bankers Association’s Purchase Applications Payment Index (PAPI) showed mortgage application payments were flat in July compared with the month before. This index measures how new monthly mortgage payments vary across time.
While an increase is indicative of declining borrower affordability conditions, a decrease in the PAPI is indicative of improving borrower affordability.
Read on for more details.
|
|
|
|
AP RESPA: Keeping your AfBAs compliant in an uncertain market
Posted Date: Wednesday, August 23, 2023
Marx Sterbcow, managing attorney at The Sterbcow Law Group, LLC and Mike LaRosa, Florida Agency Network chief operating officer, spoke with attendees at the Spring RESPRO session to share their views on the evolving affiliated business arrangement (AfBAs) model.
RESPA News took a field trip to hear the speakers provide insight on how to remain compliant while transforming fixed costs into variable expenses in an uncertain market.
Sterbcow kicked off the session by giving an overview of the current regulatory environment. The federal agencies aren’t the only ones enforcing RESPA and looking at AfBAs with a critical eye, he reminded the audience.
Click for more articles from The ABCs of RESPA: Getting Back to Basics report.
|
|
|
|
Section 8 – The heart of RESPA’s referral prohibition
Posted Date: Wednesday, August 23, 2023
RESPA Section 8(a) (housed in 12 U.S. Code §2607) states:
“No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”
While it is on the short side for a statute, like any law, the devil is in the definitions. What do they mean by “refer,” what’s the value of a “thing” and how do they define “settlement service”?
Holly Bunting, partner at Mayer Brown, is the RESPert we asked to give the breakdown of each element of the statute and detail what you need to know to stay compliant.
Click for more articles from The ABCs of RESPA: Getting Back to Basics report.
|
|
|
Introduction to 'ABCs of RESPA' report
Posted Date: Wednesday, August 23, 2023
Welcome to RESPA 101. Whether you’re a seasoned professional looking for a review session, or a freshman knocking out those required courses, The ABCs of RESPA: Getting Back to Basics is for you.
Over the next five articles (one for each of those sections in that Five Star spiral bound notebook), we provide a crash course in RESPA compliance that’s easy to read and will help you ace that exam (or more importantly, better advise clients on RESPA risk).
Click for more features from The ABCs of RESPA: Getting Back to Basics report.
|
|
|
National Association of Realtors’ CLO named American Bar Foundation fellow
Posted Date: Wednesday, August 23, 2023
National Association of Realtors (NAR) Chief Legal Officer and Chief Member Experience Officer, Katie Johnson, has been selected as a 2023 fellow by the American Bar Foundation (ABF).
ABF is the independent, nonprofit arm of the American Bar Association dedicated to expanding knowledge and advancing justice through innovative, interdisciplinary, and rigorous empirical research on law, legal processes, and legal institutions.
|
|
|
Freedom Mortgage receives first RESPA consent order by CFPB
Posted Date: Monday, August 21, 2023
The Consumer Financial Protection Bureau (CFPB) showed renewed interest in RESPA, as it announced its first RESPA-related consent order in at least two years against Freedom Mortgage Co., a nonbank residential mortgage loan originator and servicer.
The bureau also issued an order against Realty Connect USA Long Island, Inc., which the CFPB accused of accepting numerous illegal kickbacks from Freedom.
Read on for more details.
|
|
|
Class action suit filed against KeyCorp.
Posted Date: Monday, August 21, 2023
A stockholder rights law firm has filed a class action suit against KeyCorp, alleging the holding company for KeyBank downplayed concerns regarding its liquidity.
The president and CEO of the National Community Reinvestment Coalition said this recent action makes him wonder, what else is KeyBank hiding?
Read on for more details.
|
|
|
Report offers insight into evolving compliance concerns
Posted Date: Monday, August 21, 2023
Struggling to keep a pulse on the changes happening in the mortgage and real estate industry? October Research, LLC has a report for that.
In the Real Estate Compliance Outlook report, all five of the October Research publications came together to bring you expert analysis of the current regulatory and compliance landscape in the title insurance, settlement services, mortgage lending, and real estate valuation industries.
Read on for more details.
|
|
|
Summer buying season may have peaked
Posted Date: Monday, August 21, 2023
A report on home sales for July curated by RE/MAX, LLC indicated the summer homebuying season for this year may have peaked, as July marked the first month-over-month decline since April.
RE/MAX reported July home sales declined 14.7 percent when compared with the prior month and declined 16.1 percent year-over-year.
To learn what this means going forward, read on.
|
|
|
Fixed-rate mortgage average rate hits 20-year high
Posted Date: Monday, August 21, 2023
Freddie Mac’s primary mortgage market survey found the 30-year, fixed-rate mortgage average reached its highest level in over 20 years.
This time last year, the rate was 5.13 percent.
Read on to learn how much it has increased.
|
|
|
FHA, HUD, FHFA, USDA, Ginnie Mae announce ongoing support for Maui wildfires
Posted Date: Monday, August 21, 2023
Several federal housing agencies and the Government National Mortgage Association (Ginnie Mae) came together to announce ongoing support for those struggling in the aftermath of the Maui County, Hawaii, wildfires.
“We stand in solidarity with the people of Maui and offer our deepest condolences and sympathies to those who have lost loved ones, homes, businesses, and communities to these devastating fires,” the agencies stated.
Read on for more details.
|
|
|
October Research welcomes Mary Schuster as Chief Knowledge Officer
Posted Date: Thursday, August 17, 2023
October Research announces that 25-year title and settlement services industry veteran Mary Schuster has joined the company as Chief Knowledge Officer.
“Stay tuned for some exciting new developments we will be rolling out to assist our partners in the real estate transaction,” CEO and Publisher Erica Meyer said in the announcement.
Read on for more.
|
|
|
Black homebuyers denied mortgages more often, but less than previous years
Posted Date: Thursday, August 17, 2023
In the wake of lawsuits questioning the Consumer Financial Protection Bureau’s use of the Equal Credit Opportunity Act and the issue of appraisal bias appearing on the bureau’s radar, an analysis done by LendingTree showed Black homebuyers were significantly more likely to be denied a mortgage in 2022 compared with the denial rates among the overall population.
Despite this continuing difference, the results did note the deviation was smaller than in previous years.
Read on for more details.
|
|
|
Guidance issued for FHA mortgagees, servicers on handling issues in wake of Hawaii disaster
Posted Date: Thursday, August 17, 2023
In an ongoing effort to provide support to Maui County, Hawaii, and those residents who have lost their homes in the wildfires, the Federal Housing Administration (FHA) issued reminder guidance for all FHA-approved mortgagees and servicers about how to handle originations and servicing for those impacted by the natural disaster.
“Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster, and FHA encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief,” the agency stated.
Read on for details.
|
|
|
Servicer partners with social fintech platform to provide support for homeowners
Posted Date: Thursday, August 17, 2023
Fay Servicing, a nationwide, diversified mortgage servicer, and its partner SpringFour, a social fintech platform, work to provide financial resources for struggling homeowners.
The two have been working together over the last year to support new homeowners facing challenges exacerbated by inflation, student debt, and other expenses.
Read on for more details.
|
|
|
HUD receives an ‘A+’ Grade on SBA’s Annual Small Business Procurement Scorecard
Posted Date: Thursday, August 17, 2023
For Fiscal Year 2022, the U.S. Department of Housing and Urban Development (HUD) is honored to receive an annual procurement scorecard rating of “A+,” the highest grade available from the Small Business Administration (SBA).
The annual scorecard is an assessment tool that measures how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals and reports agency-specific progress.
|
|
|
Borrower denied loss mitigation brings RESPA suit
Posted Date: Monday, August 14, 2023
A borrower’s loss mitigation application denial sparked a RESPA suit in the U.S. District Court in the District of New Jersey.
Nationstar Mortgage LLC, dba Mr. Cooper, moved to dismiss the complaint, claiming the plaintiff’s claims were conclusory and did not give rise to a cause of action.
In addition to the RESPA claim, the plaintiff also brought a Truth in Lending Act claim.
Read on for more details.
|
|
|
Hawaii to receive assistance in wake of wildfires
Posted Date: Monday, August 14, 2023
In the aftermath of the wildfires that have caused catastrophic damage to neighborhoods and homes in Maui County, Hawaii, the U.S. Department of Housing and Urban Development (HUD) announced federal disaster relief will be available for those affected.
The recovery support was announced shortly after HUD also granted over $21 million to the Department of Hawaiian Home Land in effort to meet the housing needs of low-income Native Hawaiian families.
Read on for more details.
|
|
|
Home price gains posted in almost 60 percent of metro areas
Posted Date: Monday, August 14, 2023
The second quarter of 2023 saw almost 60 percent of metro areas realizing home price gains, the National Association of Realtors said in its recent report.
Of the top 10 areas, six were in the Midwest.
While existing-home sales prices climbed, the national median single-family existing-home price declined 2.4 percent over the last year.
Read on for more details.
|
|
|
Q2 sees mortgage delinquencies decrease
Posted Date: Monday, August 14, 2023
The Mortgage Bankers Association (MBA) National Delinquency Survey reported a decrease in delinquencies in the second quarter of 2023.
The fall spanned all mortgage types, and MBA noted foreclosure starts and foreclosure inventory also declined quarter-to-quarter.
Read on to see how the delinquency rate stacked up in comparison to prior quarters.
|
|
|
Charge, fee guide released by MISMO
Posted Date: Monday, August 14, 2023
A Consumer-facing Charge and Fee Guide has received “candidate recommendation” status, meaning it is now available for use, according to MISMO.
The guide provides a standard set of expected fee names and descriptions for commonly used fees, to be included in loan estimate and closing disclosure forms.
Read on for more details.
|
|
|
Over 130 lawmakers join amicus brief challenging CFPB funding structure
Posted Date: Monday, August 14, 2023
Over 130 lawmakers from the House and Senate signed an amici brief criticizing the funding structure of the Consumer Financial Protection Bureau, stating its enacting legislation overstepped Congress’ appropriations power.
Sens. Katie Britt (R-Ala.) and Tim Scott (R-S.C.), as well as Reps. Patrick McHenry (R-N.C.) and Andy Barr (R-Ky.) were among the signors.
Read on for more details.
|
|
|
CFPB issues trend report on HECMs
Posted Date: Thursday, August 10, 2023
The Consumer Financial Protection Bureau reported its observations about the advertising of home equity conversion mortgages, or reverse mortgages, and how it may impact those consumers being targeted.
The report stems from the substantial increase in reverse mortgage advertising, often geared toward older Americans. While it can be a boon for some, the offering does run the risk of jeopardizing their financial security.
Read on for more details.
|
|
|
Housing discrimination complaints on the rise
Posted Date: Thursday, August 10, 2023
In its fair housing trends report, the National Fair Housing Alliance found housing discrimination complaints have hit an all-time high.
More than 33,000 complaints were filed in 2022, and the organization noted domestic violence and source of income complaints also were on the rise.
Read on for more details.
|
|
|
Foreclosure filings remain low
Posted Date: Thursday, August 10, 2023
A July 2023 foreclosure market report supplied by ATTOM revealed foreclosure filings remaining fairly low, with a 9 percent decrease compared with June.
However, the company also noted the number of foreclosure filings, which include default notices, scheduled actions or bank repossessions, did increase 5 percent year-over-year.
Read on to learn which states and metropolitan statistical areas led the pack in foreclosure filings.
|
|
|
FHA improves FHAC for mortgagees
Posted Date: Thursday, August 10, 2023
The Federal Housing Administration (FHA) made changes to its FHA Connection System to make it more efficient for mortgagees.
The change affects the processing of case cancellations and reinstatements, eliminating a requirement and streamlining the experience for lenders.
Read on for more details.
|
|
|
|
Injunctive relief granted in RESPA case
Posted Date: Monday, August 7, 2023
The U.S. District Court for the District of New Hampshire ruled on a defendant’s motion to dismiss and emergency motion to dissolve injunction, as well as the plaintiff’s motion for a preliminary injunction.
The plaintiff asserted the defendant servicer’s mishandling of the mortgage loan prevented her and her husband from acquiring a refinance with better terms.
Read on for more details.
|
|
|
CFPB report highlights fair lending, servicing violations
Posted Date: Monday, August 7, 2023
The Consumer Financial Protection Bureau’s summer Supervisory Highlights report found several unfair, deceptive, and abusive acts and practices across many consumer financial products, including mortgage servicing and loss mitigation products.
The report also highlighted fair lending violations, including price discrimination and discriminatory lending restrictions.
Read on for more details.
|
|
|
Freddie Mac sees 40 percent increase in families housed in Q2
Posted Date: Monday, August 7, 2023
Freddie Mac CEO Michael DeVito and Chief Financial Officer/ Executive Vice President Christian Lown shared how the agency performed during the second quarter, as well as what the Enterprise is doing to address the ongoing challenges in the housing market.
“By remaining focused on our commitment to help families find an affordable place to call home, we earned $2.9 billion in net income, and we grew Freddie Mac’s net worth to $42 billion,” DeVito said on the call. “The nearly $8 billion we have added via retained earnings since second quarter 2022 contributes to Freddie Mac’s financial stability and our ability to serve our mission.”
Read on for more details.
|
|
|
New protections requested for GSE-backed properties
Posted Date: Monday, August 7, 2023
Sen. Sherrod Brown (D-Ohio) sent a letter to the Federal Housing Finance Agency (FHFA) about protecting residents in properties with financial backing through Fannie Mae and Freddie Mac.
This missive is in response to the FHFA’s request for input on multifamily tenant protections.
Read on for more details.
|
|
|
Former CFPB attorney forms new law firm
Posted Date: Monday, August 7, 2023
Two attorneys, each with more than two decades-worth of experience – including time as senior counsel in the Consumer Financial Protection Bureau’s Office of Regulations – formed a new law firm with offices in Washington, D.C., and Orange County, Calif.
“Our combination of legal, regulatory, risk and operational experience will enable SeldenLindeke to provide strategic and pragmatic advice more cost effectively than large, legacy firms,” one of the attorneys said. “Our firm will not operate under the intense billing pressures and higher profit per partner metrics common in larger law firms today.”
Read on for more details.
|
|
|
HUD updates guidance to conform to Biden’s ‘Investing in America’ plan
Posted Date: Monday, August 7, 2023
Updates to its guidance on the treatment of financial benefits from participation in community solar energy programs should make it easier for public housing authorities and owners of properties participating in the agency’s multifamily assisted housing programs to understand and implement solar program policies, the U.S Department of Housing and Urban Development stated.
Read on for more details.
|
|
|
Manufactured home loan sparks TILA case
Posted Date: Thursday, August 3, 2023
When attempting to purchase a manufactured home for her elderly parents, a homebuyer alleged the financial group handling the purchase violated the Truth in Lending Act. Part of her claim stated the closing documents she signed contained errors from a previous draft that were never corrected, but she was forced to sign them to secure lodging for her parents.
The U.S. District Court for the District of Arizona ruled on the defendants’ motions to dismiss.
Read on for more details.
|
|
|
Federal judge blocks CFPB Section 1071 data collection rule
Posted Date: Thursday, August 3, 2023
The Consumer Financial Protection Bureau’s (CFPB) new rule requiring lenders to collect demographic data – one it was required to issue under the Dodd-Frank Act as well as a court order – has been blocked by a federal judge in Texas while the bureau waits to make its funding structure argument before the Supreme Court.
The injunction in the Southern District of Texas barred the CFPB from requiring Rio Bank of McAllen, Texas, and members of the Texas Bankers Association and American Bankers Association to comply with the Section 1071 small-business lending rule until the Supreme Court rules on the bureau’s funding.
Read on for more details.
|
|
|
HUD, NAREB to partner on addressing appraisal bias
Posted Date: Thursday, August 3, 2023
Starting in October, the U.S. Department of Housing and Urban Development and the National Association of Real Estate Brokers are joining efforts to address issues of bias and discrimination in appraisals.
With the goal to promote fairness in the housing market, the plan includes training and discussions on best practices.
Read on for more details.
|
|
|
May mortgage delinquency rates match all-time low
Posted Date: Thursday, August 3, 2023
May mortgage delinquency rates matched the all-time recorded low, according to CoreLogic’s loan performance insight for July 2023. Serious delinquencies followed the same trend, said Molly Boesel, CoreLogic principal economist.
“Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020,” Boesel added.
Read on for more details.
|
|
|
Rural mortgage agency adds USDA loans to product line
Posted Date: Thursday, August 3, 2023
CBC Mortgage Agency (CBCMA), a Native American wholly owned housing finance agency that provides down payment assistance and 100 percent rural financing, has added the U.S. Department of Agriculture’s (USDA) 30-year mortgage loan to its product offerings.
These USDA loans are designed for borrowers outside of urban and suburban areas and offer 100 percent financing, making homeownership an achievable dream for low- and moderate- income borrowers in rural areas and often in minority neighborhoods.
Read on for more details.
|
|
|
Pro se plaintiff attempts TILA right of rescission argument
Posted Date: Monday, July 31, 2023
A pro se couple accused their servicer of violating the Truth in Lending Act, the Fair Debt Collection Practices Act, and other state and contract-related claims.
The servicer, Newrez, LLC, responded by filing a motion to dismiss, asserting the couple failed to state a claim upon which relief can be granted. The U.S. District Court for the District of Colorado ruled on the matter.
Read on for more details.
|
|
|
Lenders cite cost cutting as top business priority
Posted Date: Monday, July 31, 2023
Doug Duncan, Fannie Mae’s senior vice president and chief economist, stated the company’s Mortgage Lender Sentiment Survey revealed lenders’ top business priority is cutting costs, a trend that has continued since the third quarter of 2021.
Other priorities for respondents included business process streamlining, talent management and leadership, and consumer-facing technology.
Read on for more details.
|
|
|
NFHA pens letter to HUD, requesting improvements to Section 504
Posted Date: Monday, July 31, 2023
The National Fair Housing Alliance and other housing organizations submitted a comment to the U.S. Department of Housing and Urban Development requesting it modernize Section 504 of the Rehabilitation Act.
The section has not been meaningfully updated since 1988. HUD’s advanced notice of proposed rulemaking on the matter was applauded by the commenters, who urged the agency to work with fair housing organizations, disability rights advocates, and other stakeholders to ensure the updates accurately reflect the needs of the current environments.
Read on for more details.
|
|
|
Pending home sales see first increase in four months
Posted Date: Monday, July 31, 2023
For the first time in four months, the National Association of Realtors (NAR) Pending Home Sales Index recorded a month-over-month increase.
June’s pending home sales saw a modest increase of 0.3 percent, with sales in the Northeast and Midwest offsetting declines in the South and West. All regions saw lower numbers year-over-year.
Read on for more details.
|
|
|
Stratyfy partnership announced to combat discrimination in lending
Posted Date: Monday, July 31, 2023
Stratyfy, a fintech company offering artificial intelligence and machine learning solutions to help financial institutions make quick and accurate credit decisions while minimizing risk and bias, has partnered with the Beneficial State Foundation on an underwriting program designed to minimize racial disparities in lending.
“By combining Stratyfy’s technology with URJ’s [Underwriting for Racial Justice] mission-driven approach, lenders will have the resources to instigate industry-wide change, remove antiquated racially-inequitable practices, and make new, equitable lending into standard practice,” the company stated.
Read on for more details.
|
|
|
HUD acts to remove building barriers
Posted Date: Monday, July 31, 2023
The U.S. Department of Housing and Urban Development (HUD) is making efforts to address the housing inventory shortage with two separate actions – one to promote new builds, and the other to support the preservation of existing properties.
HUD’s efforts to remove barriers from new housing construction is a first-of-its-kind funding opportunity.
Read on for more details.
|
|
|
| Monthly Newsletter |
|
Cover Story:
|
|