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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly
July 2024
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CFPB RFI on mortgage closing costs asks questions, raises more
Posted Date: Thursday, June 6, 2024
The Consumer Financial Protection Bureau is asking the mortgage and settlement services industries for information on closing costs in an effort to address the rising expense of buying a home.
RESPA News followed up with compliance experts for their take on the request and what it could mean for the industry.
Read on for more details.
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CFPB final rule adds new requirement for some nonbank supervised entities
Posted Date: Thursday, June 6, 2024
The Consumer Financial Protection Bureau (CFPB) issued a final rule requiring certain nonbank covered persons to report the existence of certain final public orders obtained or issued by a government agency in connection with the offering or provision of a consumer financial product or service.
“Too often, financial firms treat penalties for illegal activity as the cost of doing business,” CFPB Director Rohit Chopra said. “The CFPB’s new rule will help law enforcement across the country detect and stop repeat offenders.”
Read on for more details.
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CFPB, Freedom Mortgage resolve HMDA allegations with proposed order
Posted Date: Thursday, June 20, 2024
Two weeks after launching its registry for nonbank repeat offenders, the Consumer Financial Protection Bureau and Freedom Mortgage filed a stipulated final judgment and order to resolve a complaint the bureau filed in October.
The joint proposal includes a $3.95 million penalty against Freedom Mortgage for allegedly violating the Home Mortgage Disclosure Act (HMDA) in violation of a 2019 consent order.
Read on for more details.
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DOJ responds to NAR petition to appeal D.C. holding
Posted Date: Thursday, June 20, 2024
The Justice Department (DOJ) asserted “rehearing is not warranted” in its response to the National Association of Realtors’ (NAR) petition filed with the Court of Appeals for the District of Columbia Circuit to rehear the decision to allow the DOJ to reopen its antitrust investigation against the organization.
“The panel’s fact-bound decision is correct and does not conflict with any decision of the Supreme Court or any court of appeals – indeed, NAR itself suggests no conflict with any other circuit’s precedents,” the DOJ’s response stated.
Read on for more details.
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Court adjusts damages in forced-place insurance case against Freedom Mortgage
Posted Date: Thursday, May 30, 2024
Freedom Mortgage Corp. made a motion in the U.S. District Court for the District of New Jersey for judgment as a matter of law, requesting the judge throw out the damages determined by the jury in a case where the lender was found liable for breach of contract as well as violations of RESPA and state consumer protection law.
The servicer had initially attempted to dismiss the RESPA claim against it for force-placing insurance on a borrower’s home in 2017, despite the fact that the residence had been lost in a fire in 2014 and had yet to be rebuilt.
Read on for more details.
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RESPA, TILA plaintiff moves to strike lender’s motion to dismiss
Posted Date: Thursday, May 30, 2024
In the latest holding in a case out of the Eastern District of Louisiana, a court considered a plaintiff’s motion to strike the defending credit union’s motion to dismiss, as well as its response to her amended complaint asserting violations of RESPA, TILA and other consumer protection laws.
This plaintiff initially brought this case on behalf of her child, who the lender was attempting to hold responsible for the loan taken out by the child’s deceased father.
Read on for more details.
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RESPA complaint brought after family loses home in fire
Posted Date: Thursday, June 6, 2024
Plaintiffs in the U.S. District Court for the District of Maryland sued PennyMac Loan Services after the servicer failed to renew their homeowner’s insurance, then retroactively force-placed insurance that was insufficient to cover all of the plaintiffs’ losses from a house fire.
PennyMac filed a partial motion to dismiss the suit, which the court granted in part and denied in part.
Read on for more details.
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Cenlar attempts to dismiss RESPA claims yield mixed results
Posted Date: Monday, June 10, 2024
Cenlar’s attempt to dismiss two RESPA claims against it yielded mixed results in a U.S. District Court for the District of New Jersey, where the plaintiff accused the servicer of failing to properly process her loss mitigation application after a state court canceled the sheriff’s sale on her property.
The state court that canceled the sale had ordered the servicer to process her application and provide the borrower the opportunity to appeal any denial.
Read on for more details.
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Program launched to support manufactured homes
Posted Date: Thursday, June 6, 2024
The Federal Housing Administration (FHA) launched a new product, the U.S. Department of Housing and Urban Development stated.
The new offering will provide an FHA-insured financing option for the purchase, refinance, and revitalization of manufactured home communities.
Read on for more details.
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National Fair Housing Alliance names COO
Posted Date: Thursday, July 11, 2024
The National Fair Housing Alliances welcomed Timothy Guinan as its new chief operating officer to lead financial management. He will also assist the board of directors and serve on the executive leadership team.
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CFPB issues CFPA, RESPA enforcement action for reverse mortgage servicing failures
Posted Date: Monday, June 24, 2024
The Consumer Financial Protection Bureau issued an enforcement action against two companies for systemic failures that caused financial harm to borrowers, causing them to lose out on home sales and pay unnecessary costs. The bureau stated the joint operation violated the Consumer Financial Protection Act and RESPA.
The penalty included $11.5 million in redress and a permanent ban from the reverse mortgage market.
Read on for more details.
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Adaptability, resilience, growth in business emphasized in NS3 keynote
Posted Date: Monday, June 24, 2024
Taylor Morrison Executive Vice President and President of the company’s financial services arm Tawn Kelley delivered the keynote address at the 2024 National Settlement Services Summit (NS3).
In her address to the crowd, Kelley highlighted the importance of adaptability, resilience and the power of personal and professional growth in the face of industry challenges.
Read on for more details.
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Iowa introduces legislation enacting NAR settlement changes
Posted Date: Monday, June 24, 2024
The Iowa legislature passed the bipartisan Iowa Real Estate Transparency Act, along with some changes to administrative rules, as a result of the settlement reached by plaintiffs and the National Association of Realtors in Sitzer-Burnett, the case where a jury found the organization and other real estate companies in violation of antitrust laws.
Read on for more details.
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May’s existing home sales decrease as home sales price hits record high
Posted Date: Monday, June 24, 2024
Existing home sales saw a slight dip month-over-month in May, a trend continuing from the month before, while the median existing-home sales price hit a record high, according to the National Association of Realtors’ report.
News of increased housing supply was marked as “good news” for consumers looking to see more properties before making purchasing decisions.
Read on for more details.
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HUD issues funds to combat homeownership gap
Posted Date: Monday, June 24, 2024
The U.S. Department of Housing and Urban Development issued $10 million to help address the homeownership gap between white communities and communities of color and bolster generational wealth building.
Read on for more details.
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Waters urges DOJ to hold City National to consent order
Posted Date: Monday, June 24, 2024
In a letter to Justice Department leadership, Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, both commended the department for the enforcement actions against City National Bank and urged it to ensure the bank is fully satisfying its obligations.
The missive came after reports that City National’s new branch is to open in an area with few Black residents.
Read on for more details.
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Former FHFA Director Calabria shares views on regulation, economics
Posted Date: Thursday, June 20, 2024
The 2024 National Settlement Services Summit (NS3) featured an exclusive interview with former Federal Housing Finance Agency Director Dr. Mark Calabria, now a senior advisor at the CATO Institute, with October Research Chief Knowledge Officer Mary Schuster.
The interview is available as the fifth installment of the Keys to Real Estate Podcast – the first to be recorded in front of a live audience.
Read on for more details.
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Plaintiffs attempt to bring RESPA claim over error on mortgage satisfaction
Posted Date: Thursday, June 20, 2024
In a case out of the U.S. Court of Appeals for the 10th Circuit, two plaintiffs brought claims under RESPA and the Kansas Consumer Protection Act in connection to an error on the mortgage satisfaction filed in relation to their loan.
The court considered whether the district court’s decision in favor of PHH Mortgage Corp.’s motion for summary judgment was an abuse of judicial discretion.
Read on for more details.
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Fraudster pleads guilty in mortgage conspiracy
Posted Date: Thursday, June 20, 2024
A man pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution after the Justice Department brought charges against him and co-conspirators related to a multi-year scheme to fraudulently obtain over $54.7 million in loans and to fraudulently acquire multifamily and commercial properties.
Read on for more details.
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Cleveland Fed names new president
Posted Date: Wednesday, June 19, 2024
The presidential search of Federal Reserve Bank of Cleveland concluded with the appointment of Beth Hammack. She will take office as the 12th president of the Cleveland Fed on Aug. 21.
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Chopra assures senator CFPB not trying to call all closing costs 'junk fees'
Posted Date: Monday, June 17, 2024
Consumer Financial Protection Bureau Director Rohit Chopra’s semi-annual report to Congress provided an opportunity for the director to defend the bureau’s recent controversial rulemakings and actions against major concerns presented by lawmakers.
Chopra’s testimony included banking, mortgage, and redlining topics before bother the Senate Committee on Banking, Housing, and Urban Affairs and the House Financial Services Committee.
Read on for more details.
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ECOA, TILA claims brought over appraisal decision
Posted Date: Monday, June 17, 2024
Two plaintiffs who sought to purchase a home in Tennessee objected when the appraisal done in connection with their potential loan was identical to one done a month before, despite the completion of several renovations.
Instead of requesting a new appraisal, the lender requested the duplicate appraisal be backdated to the original inspection, resulting in the denial of the plaintiffs’ home loan. Plaintiff alleged losses under the Truth in Lending Act and the Equal Credit Opportunity Act.
Read on for more details.
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FHFA RFI requests feedback on Enterprise plans
Posted Date: Monday, June 17, 2024
The Federal Housing Finance Agency issued a request for input on Fannie Mae’s and Freddie Mac’s (the Enterprises) proposed underserved markets plans for 2025-2027.
These proposals were submitted by the Enterprises in accordance with their Duty to Serve programs.
Read on for more details.
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Record number of consumers say ‘bad time to buy’ home
Posted Date: Monday, June 17, 2024
Fannie Mae’s Home Purchase Sentiment Index set a new record when it decreased to 69.4 in May, as consumers’ responses to whether it was a good time to buy a home dropped to the lowest recorded in the survey’s history. Affordability was the most cited reason consumers stated it was a “bad time to buy.”
“While many respondents expressed optimism at the beginning of the year that mortgage rates would decline, that simply hasn’t happened, and current sentiment reflects pent-up frustration with the overall lack of purchase affordability,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said.
Read on for more details.
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Texas proposes changes to home equity lending rule, mortgage regs
Posted Date: Monday, June 17, 2024
Texas Department of Savings and Mortgage Lending (SML) stated it is considering changes to some sections of the Texas Administrative Code related to mortgage loans, loan servicers, companies, and bankers.
The first was a joint effort with the Texas Department of Banking, Office of Consumer Credit Commissioner, and Texas Credit Union Department and amended 7 Tex. Admin Code (TAC) Section 151.1, the section related to home equity lending review.
Read on for more details.
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New FDIC chair nominated
Posted Date: Monday, June 17, 2024
President Joe Biden nominated a financial regulation veteran, with 20 years’ experience as a federal attorney and leader under four different presidents, to succeed Martin Gruenberg as the chair of the Federal Deposit Insurance Corp.
Leaders of the House Financial Services Committee and the Senate Committee on Banking, Housing, and Urban Affairs reacted to the news.
Read on for more details.
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Adversary proceeding in bankruptcy case alleges RICO, RESPA violations
Posted Date: Thursday, June 13, 2024
Debtors who had filed Chapter 13 bankruptcy cases brought an adversary proceeding against PHH Mortgage Corp., Ocwen Financial Corp., and Altisource Solutions, Inc., accusing them of a scheme that ultimately denied them and other borrowers the “fresh start” they had worked for by adhering to strict bankruptcy requirements.
The court opined on claims under the Racketeer Influenced and Corrupt Organizations Act, the Fair Debt Collection Practices Act, RESPA, and various state laws.
Read on for more details.
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Zoning moratorium ordinance sparks racial, disability discrimination suit
Posted Date: Thursday, June 13, 2024
The U.S. District Court for the Eastern District of Louisiana considered developers’ claim that a parish’s moratorium ordinance preventing them from constructing affordable housing was fueled by discrimination in violation of the Fair Housing Act, the Americans with Disabilities Act, and other federal and state statutes.
The plaintiffs alleged it had spent $2 million in preparations to develop the land, and was deprived of “the right to develop affordable housing for individuals free from discrimination on the basis of race or disability.”
Read on for more details.
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NCRC report digs in to redlining impact on mortgage lending in underserved areas
Posted Date: Thursday, June 13, 2024
In an effort to more precisely and definitively explain why mortgage lending in formerly redlined neighborhoods continues to lag behind predominantly white areas, the National Community Reinvestment Coalition (NCRC) compiled an evidence-based report examining the obstacles to homeownership that still exist for people of color.
The NCRC report attempted to reconcile flaws present in existing redlining data, such as inconsistent reporting categories and mismatched demographic designations, and present it with proper context and clear explanations.
Read on for more details.
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New Jersey settles four cases alleging income discrimination against Coldwell Banker Realty
Posted Date: Thursday, June 13, 2024
On behalf of the New Jersey Division on Civil Rights, the state’s attorney general entered into a settlement to resolve four cases alleging discrimination based on source of lawful income against Coldwell Banker Realty.
The allegations were brought by the Housing Rights Initiative, a non-profit housing watchdog group.
Read on for more details.
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Flex modification enhancements approved for struggling borrowers
Posted Date: Thursday, June 13, 2024
Fannie Mae and Freddie Mac made changes to enhance their flex modification policies, the Federal Housing Finance Agency announced, expanding assistance for borrowers facing longer-term financial hardships.
Read on for more details.
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Zombie foreclosure spread remains minimal, despite forecasted increase
Posted Date: Monday, June 10, 2024
According to ATTOM’s vacant property and zombie foreclosure report for the second quarter, the count of “zombie” homes – those the data curator describes as properties deemed vacant and “stuck” in the foreclosure process – has decreased both quarter-over-quarter and year-over-year.
According to the report, this dip in zombie properties may be because the housing market “remains buoyed” by 12 years of price increases.
Read on for more details.
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HUD, VA work to help veterans with housing issues
Posted Date: Monday, June 10, 2024
The U.S. Department of Housing and Urban Development (HUD) and Department of Veterans Affairs (VA) have been making moves to better support veterans in finding and maintaining permanent housing, including providing additional funds for housing vouchers and requesting foreclosure moratorium extensions.
First, HUD and VA are making $78 million available in HUD-VA Supportive Housing (HUD-VASH) vouchers to public housing agencies, funding over 7,000 vouchers in an effort to end homelessness by assisting veterans and their families acquire permanent and sustainable housing, as well as access to high-quality health care and supportive services.
Read on for more details.
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Republic Bank, Snapdocs partner to accelerate bank’s eClosing strategy
Posted Date: Monday, June 10, 2024
Republic Bank and Trust Co. and Snapdocs announced they are partnering in an effort to accelerate the bank’s eClosing adoption, with plans to increase productivity and efficiency across Republic’s entire loan portfolio.
Republic stated it selected Snapdocs as its partner because of the digital closing provider’s “proven expertise” in driving eClosing adoption.
Read on for more details.
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CFPB warns against deceptive fine print in consumer contracts
Posted Date: Monday, June 10, 2024
Warning against the use of fine print claiming to limit certain consumer rights and protections, the Consumer Financial Protection Bureau issued a circular advising financial institutions that including such terms and conditions in consumer contracts, including mortgage agreements, may violate the Consumer Financial Protection Act.
Read on for more details.
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April pending home sales drop
Posted Date: Thursday, June 6, 2024
April’s pending home sales dropped in all four major regions month-over-month and year-over-year, the National Association of Realtors’ numbers indicated.
The trade organization’s chief economist said rising interest rates in April were the cause of “dampened” homebuying, even though there was more inventory for buyers to peruse.
Read on for more details.
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FSOC report highlights nonbank mortgage activity, AI compliance
Posted Date: Thursday, May 30, 2024
Nonbank mortgage activity and the use of automated tools in lending decisions are the main focal points in the Financial Stability Oversight Council’s (FSOC) annual report summarizing key vulnerabilities in the financial system and recommendations for mitigating risks, as well as the council’s activities in 2023.
Regulators commented on the need for FSOC to have more tools to help stem emerging financial stability risks.
Read on for more details.
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Members of Congress to FHFA director: Freddie Mac proposal increases taxpayer risk
Posted Date: Thursday, May 30, 2024
In response to the Federal Housing Finance Agency’s request for comment on Freddie Mac’s proposal to begin purchasing certain single-family closed-end second mortgages as a new product, members of Congress such as Sen. Bill Hagerty (R-Tenn.) and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs Tim Scott (R-S.C.) sent a letter to the agency’s director, warning the offering could drive up inflation and increase taxpayer risk.
Read on for more details.
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ICE whitepaper discusses minimizing preventable expenses for mortgage lenders
Posted Date: Thursday, May 30, 2024
Intercontinental Exchange, Inc.’s (ICE) report on fee cures and their impact on profitability revealed these expenses are “exceedingly common” and add a considerable amount to the cost of loan production.
In addition to identifying the problem, the whitepaper also offered suggestions to mortgage lenders on how to mitigate these expenses.
Read on to learn how lenders could recover more than $1.2 million for every 1,000 loans produced.
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Grant provides $150M in affordable housing for tribal communities
Posted Date: Thursday, May 30, 2024
By issuing $150 million in grants, the U.S. Department of Housing and Urban Development is looking to prioritize new housing construction, housing rehabilitation, and necessary affordable housing-related infrastructure projects in Native American and Alaska Native communities.
Read on for more details.
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