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More indictments in large mortgage fraud scheme
Posted Date: Thursday, April 25, 2013
Five people have been indicted with various crimes stemming from their participation in a mortgage fraud scheme that involved fraudulent documents and inflated purchase prices on loan documents for more than 100 Philadelphia properties. In addition to the five defendants charged in the indictment, seven defendants were charged by information.
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Title attorney sentenced to 20 years in prison for mortgage fraud
Posted Date: Thursday, April 25, 2013
A Florida title attorney was sentenced to 20 years in prison for his role in a mortgage fraud scheme that included false HUD-1 settlement statements. Three others were also sentenced to prison for their involvement in the scheme
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CFPB announces new senior personnel
Posted Date: Thursday, April 25, 2013
The Consumer Financial Protection Bureau announced changes and new additions to its senior leadership including a newly-created office that will connect the bureau with bank and nonbank trade associations, financial institutions and businesses.
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Committee refuses to allow Cordray to testify as CFPB director
Posted Date: Thursday, April 25, 2013
The chairman of the Committee on Financial Services wrote a letter to Richard Cordray, stating that because Cordray does not validly hold the position of Consumer Financial Protection Bureau director, he is not welcome to testify before the committee.
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Changes to the mortgage servicing rules
Posted Date: Wednesday, April 24, 2013
The Consumer Financial Protection Bureau is already proposing changes to the mortgage servicing final rules it released in January. The bureau seeks to clarify the small servicer exemption to certain mortgage servicing requirements and make clear when Regulation X preempts state law.
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New York State continues Force-placed insurance crackdown
Posted Date: Wednesday, April 24, 2013
New York Superintendent of Financial Services Benjamin Lawksy announced that the state is continuing to crack down on force-placed insurance that it believes is detrimental to homeowners and investors. “We’re kicking the kick-backs out of this industry,” Lawsky said before announcing that the state has agreed to a settlement with the nation’s second-largest force-placed insurer. In March, New York State announced a major settlement with the country’s largest force-placed insurer, Assurant.
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Former loan officer convicted in mortgage fraud scheme
Posted Date: Monday, April 22, 2013
A former loan officer was convicted of nine counts of wire fraud and one count of aggravated identify theft for his role in a mortgage fraud scheme. The man faces up to 30 years in prison for each fraud count.
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Attorney convicted in fraud scheme
Posted Date: Monday, April 22, 2013
A lawyer from Louisiana who had worked as a real estate agent was convicted of conspiracy and multiple fraud counts for his involvement in a mortgage fraud scheme involving 220 properties and $50 million in losses.
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CFPB released budget report, plans to add staff in 2014
Posted Date: Monday, April 22, 2013
The Consumer Financial Protection Bureau released its Strategic Plan, Budget and Performance Plan and Report, indicated that it expects to hire more employees in 2014 but spend less than it will in 2013.
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United Guaranty asks court to reconsider captive reinsurance case
Posted Date: Monday, April 22, 2013
In a captive reinsurance case, one of the insurers, United Guaranty Residential Insurance Co., filed a motion to reconsider the court’s decision to deny its motion to dismiss, arguing the plaintiff’s claim was time barred under RESPA’s statute of limitations. The court disagreed, finding that the plaintiff had sufficiently pled facts necessary to invoke equitable tolling.
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What to do if the CFPB comes knocking
Posted Date: Thursday, April 18, 2013
The Consumer Financial Protection Bureau has made no secret of the fact that it is currently conducting investigations to determine whether consumer financial law violations exist. Under the Dodd-Frank Act, the bureau has the authority to conduct investigations, which include sending subpoenas and civil investigative demands, and bring enforcement actions. So, what do you do if the CFPB comes knocking on your door? RESPA News spoke to attorneys Mitchel Kider and Howard Lax about what steps a company can take if it receives a civil investigative demand from the CFPB.
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Captive reinsurance case against BofA survives motion to dismiss
Posted Date: Wednesday, April 17, 2013
A group of borrowers sued Bank of America Corp. and various private mortgage insurers, alleging that the lender had a captive reinsurance arrangement that violated RESPA and caused borrowers to pay hundreds of millions of dollars in inflated premiums. Some of the defendants filed a motion to dismiss, arguing the plaintiffs’ claims were barred by RESPA’s statute of limitations. However, according to the plaintiffs, the claims should be equitably tolled because BofA actively concealed the illegal scheme. Read on to find out why the court denied the motion to dismiss.
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HARP extended for another two years
Posted Date: Wednesday, April 17, 2013
The Federal Housing Finance Agency, on April 11, directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program by two years to Dec. 31, 2015. The program was set to expire Dec. 31, 2013.
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Bureau takes steps to clarify escrow requirements
Posted Date: Wednesday, April 17, 2013
The Consumer Financial Protection Bureau released a proposed rule meant to clarify the 2013 Escrow Requirements under the Truth in Lending Act final rule the bureau published on Jan. 10. The agency indicated that more guidance will be released later this month.
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Webinar to deliver in-depth RESPA training - Webinar
Posted Date: Monday, April 15, 2013
With the constant flux of new regulations and state requirements, a responsible company may find themselves in troubled waters if they haven’t looked at their compliance policies and procedures lately. Join RESPA News April 23 for in-depth training on the crucial sections of one of the most controversial consumer protection statutes impacting mortgage and settlement services. RESPA trainers Phil Schulman and Holly Spencer Bunting, of K&L Gates, will dive deep into RESPA and instruct on anti-kick provisions, unearned fees, penalties, enforcement and more. Read on for webinar details and the registration link.
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Title co. sues lender for alleged RESPA violations
Posted Date: Monday, April 15, 2013
A title company filed suit against a mortgage lender, alleging that the lender used an affiliated business arrangement in order to engage in an illegal referral scheme in violation of RESPA. The lender and its affiliates argued that the title company could not sue under RESPA because it is not a consumer and therefore, has no cause of action under the statute. The defendants also argued that the title company was attempting to transform nonactionable RESPA claims into actionable Racketeer Influenced and Corrupt Organizations Act claims. Read on to find out what the court decided.
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Deadlines for mortgage rules too soon?
Posted Date: Monday, April 15, 2013
A group of industry associations asked the Consumer Financial Protection Bureau to extend the new mortgage rules’ compliance deadlines so that the regulations can be implemented efficiently. The groups said without more time to comply, some lenders may eliminate their mortgage lending activities, which would be detrimental to the mortgage industry.
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Could the CFPB’s rules and enforcement actions be invalidated?
Posted Date: Monday, April 15, 2013
According to a report by the Congressional Research Service, the answer to that question is yes. The agency said that the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Noel Canning v. National Labor Relations Board could have a serious impact on the actions the Consumer Financial Protection Bureau has taken since Richard Cordray was appointed as director. Read on to find out what the agency thinks could happen to the CFPB’s recently issued regulations if Cordray’s appointed is found unconstitutional.
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Borrowers allege mortgage acceleration violated RESPA
Posted Date: Monday, April 15, 2013
Mortgage loan borrowers sued their servicer, alleging that it violated RESPA when it sent the couple a notice of intent to accelerate their loan less than 60 days after the servicing had been transferred to it. The couple also alleged that the servicer failed to respond to their qualified written request. Read on to find out why the court denied the servicer’s motion to dismiss.
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Get the scoop on the LO compensation rule - Webinar
Posted Date: Thursday, April 11, 2013
Are you curious how the CFPB’s new loan originator compensation rule will affect you? Join Dodd Frank Update for an educational webinar, explaining the final rule in detail and identifying impactful changes to how loan originators are paid and how they qualify for their jobs. This webinar will provide training on the elements of the rule and help prepare mortgage professionals for implementation.
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Court finds RESPA applicable in ongoing captive reinsurance case
Posted Date: Thursday, April 11, 2013
In an ongoing class action regarding captive reinsurance, the defendants argued that RESPA was inapplicable because some of the plaintiffs did not pay private mortgage insurance at the time of closing and that a settlement service under RESPA only exists when the costs are payable at or before the closing. The court disagreed.
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Federal support necessary to preserve financial stability, NAHB says
Posted Date: Thursday, April 11, 2013
During testimony before the House Financial Services Subcommittee on Housing and Insurance, the National Association of Home Builders expressed support for congressional efforts to reform the Federal Housing Administration but urged lawmakers to proceed in a cautious manner to avoid any disruptions to the nation’s housing finance system.
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CFPB releases its first compliance guide
Posted Date: Thursday, April 11, 2013
The Consumer Financial Protection Bureau released a 45-page ability-to-repay and qualified mortgage rule compliance guide for small business entities on April 10. The purpose of the guide was to provide a summary of the rule that also highlights issues that small creditors may have when implementing the rule.
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Servicer argues force-placed insurance did not violate Florida law
Posted Date: Monday, April 8, 2013
A mortgage loan borrower filed a class action suit against her lender and servicer, alleging that the defendants violated state law by charging her for force-placed insurance when she already had hazard insurance coverage. She claimed the premiums for the force-placed insurance were excessive, unreasonable and were not proportionate to the insurable risk. The defendants filed a motion to dismiss, which the court denied.
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Bureau prepares to release new guidance
Posted Date: Monday, April 8, 2013
The Consumer Financial Protection Bureau said it plans to begin releasing plain language compliance guides this week to help the mortgage industry comply with new regulations.
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RESPA case could bring back familiar standing issue
Posted Date: Monday, April 8, 2013
A new complaint filed in the U.S. District Court for the District of Maryland contains some facts that look very familiar. The purported RESPA class action has a striking resemblance to First American v. Edwards. The injury alleged is not an overcharge; rather, the plaintiffs claim that they were injured simply because the defendants violated RESPA. This is the same injury pled in Edwards, and the question born from that claim was whether an individual has standing to sue under RESPA even if the individual fails to assert an injury. Three U.S. Circuit Courts have already conferred standing, and the Supreme Court has yet to decide the issue. Is it possible we have another Edwards case on our hands? Two attorneys from Saul Ewing LLP say there could be a problem.
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Captive reinsurance investigation leads to enforcement actions against mortgage insurers
Posted Date: Thursday, April 4, 2013
The Consumer Financial Protection Bureau announced it is taking action against four mortgage insurance companies it believes used captive reinsurance arrangements to pay illegal kickbacks to mortgage lenders in exchange for business, in violation of RESPA. The CFPB’s enforcement actions against the insurers does not appear to be the end of the investigation. Cordray announced that the bureau is continuing to look into the lenders’ involvement in the captive reinsurance arrangements.
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Data privacy, security top concerns with national mortgage database proposal
Posted Date: Thursday, April 4, 2013
Data privacy and information security are among the top issues both industry and consumer groups have raised following the announcement by the Consumer Financial Protection Bureau and the Federal Housing Finance Agency that they will be collaborating on a national mortgage database. How to gather useful and usable information without getting so granular as to link an identifiable individual with the data is a primary challenge in creating the data points that will be in the system. But more critical is securing a system that houses the data in the wake of a Government Accountability Office report that was highly critical of the CFPB’s current protocols. Read on for an assessment of the challenges ahead in this third and final installment of our analysis of the issues surrounding the creation of a national mortgage database.
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Mortgage brokers classified wrong in CFPB database?
Posted Date: Thursday, April 4, 2013
The National Association of Mortgage Brokers has come out in support of the Consumer Financial Protection Bureau’s new Consumer Complaint Database. The organization, however, says that mortgage brokers have been incorrectly classified in the database, causing the data to be misleading.
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Qualified mortgage points and fees definition needs amending, legislators say
Posted Date: Thursday, April 4, 2013
Under the Dodd-Frank Act, the Consumer Financial Protection Bureau was required to draft an ability-to-repay rule that obligates lenders to make good faith determinations that borrows have a reasonable ability to repay the loan they receive. One of the rule's requirements, the points and fees definition and threshold, has been troubling to the proponents of affiliated business in the real estate mortgage markets. A new bill seeks to amend the definition of points and fees in a way proponents of the bill believe will ensure that consumers continue to be able to access affordable housing credit.
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Cordray’s appointment was unconstitutional, voters say
Posted Date: Monday, April 1, 2013
In a February/March poll, RESPA News asked readers if they thought that Richard Cordray’s appointment as director of the Consumer Financial Protection Bureau was unconstitutional. A majority of the respondents said yes and that the bureau’s actions while he was in office should be invalidated.
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CFPB considers the cost of compliance
Posted Date: Monday, April 1, 2013
The Consumer Financial Protection bureau announced it is going to study the costs related to complying with the rules the bureau inherited from other regulators under the Dodd-Frank Act.
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Borrower says unanswered QWR resulted in additional fees
Posted Date: Monday, April 1, 2013
A borrower sued his mortgage loan servicer, alleging the servicer’s failure to respond to his qualified written request, in violation of RESPA, resulted in additional late fees and interest on his account. The servicer argued the borrower’s default on the loan caused the damages. Read on to find out why the court agreed with the borrower.
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Mortgage complaint database open to the public
Posted Date: Monday, April 1, 2013
The Consumer Financial Protection Bureau announced the launch of its consumer complaint database that includes more than 50,000 searchable mortgage complaints. Overall, the database contains 90,000 complaints regarding a variety of financial products and services. According to CFPB Director, Richard Cordray, the bureau does not verify each complaint in the database. It does verify if the consumer has a relationship with the company. Cordray indicated that the database offers a more complete and sophisticated view of the consumer financial marketplace.
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