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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly
June 2024
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UPDATED: Industry reacts to Supreme Court finding CFPB funding structure constitutional
Posted Date: Thursday, May 16, 2024
In a 7-2 vote, the Supreme Court of the United States sided with the Consumer Financial Protection Bureau (CFPB) in the yearslong battle with Consumer Financial Services of America, ending uncertainty as to whether the CFPB’s funding structure was constitutional.
RESPA News reached out to industry experts on what this means.
Read on for more details.
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Expert urges industry to respond to CFPB RFI on settlement services costs
Posted Date: Thursday, May 30, 2024
The Consumer Financial Protection Bureau has issued a request for information (RFI) on mortgage closing costs, seeking input on how closing costs “may be inflated and constraining” the mortgage lending market. Richard Horn of Garris Horn LLP and former senior counsel at the bureau shared his initial reaction with RESPA News, as did Marx Sterbcow of the Sterbcow Law Group.
As this story develops, we’ll bring you additional comments from industry experts on what this RFI means, and how the industry can prepare.
Read on for more details.
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Arkansas bank settles RESPA kickback, FCRA allegations with FDIC
Posted Date: Thursday, May 30, 2024
An Arkansas bank and the Federal Deposit Insurance Corp. entered into a settlement related to allegations the bank violated RESPA, the Fair Credit Reporting Act and other consumer protection laws.
Bank of England of England, Ark., agreed to pay $1.5 million to resolve the charges, and nine of the lender’s former employees were also issued individual enforcement actions.
Read on for more details.
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FTC report to CFPB outlines agency efforts to enforce consumer protection laws
Posted Date: Thursday, May 30, 2024
To supplement the Consumer Financial Protection Bureau’s (CFPB) annual report to Congress on its consumer protection activities, the Federal Trade Commission (FTC) provided its own to the bureau and the Federal Reserve Board, highlighting the activities it took in 2023 to further and enforce certain consumer protection laws.
In addition to enforcement actions under the Truth in Lending Act, the FTC also made efforts to educate consumers about mortgage products and promulgate a rule directed toward mitigating costs that the CFPB and other agencies have referred to as junk fees.
Read on for more details.
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Plaintiffs allege inadequate disclosure form in RESPA, RICO case
Posted Date: Thursday, May 23, 2024
“We can only play the cards we are dealt, and the plaintiffs in this case were dealt a $2,000 breach-of-contract action,” U.S. District Judge Gene Pratter of the Eastern District of Pennsylvania wrote at the beginning of his court’s holding where the plaintiffs attempted to bring RESPA and Racketeer Influenced and Corrupt Organizations Act claims, along with several state and common law causes of actions, in relation to the affiliated business arrangement between a broker and a title company.
Prater added that despite it being a “straightforward case concerning a relatively modest sum,” the plaintiffs provided 104 pages alleging over $75,000 in damages across 12 counts.
Read on for more details.
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NAR petitions for rehearing of DOJ decision
Posted Date: Thursday, May 23, 2024
The National Association of Realtors (NAR) filed a petition for rehearing with the Court of Appeals for the District of Columbia Circuit, arguing the decision to allow the Department of Justice (DOJ) to reopen its antitrust investigation against the title organization conflicts with precedence established by the D.C. Circuit and the U.S. Supreme Court.
While NAR was filing this week, a DOJ attorney made an argument in another commission case out of Massachusetts, stating the DOJ believed offers of compensation between buyers’ and sellers’ agents should not be made “at all,” according to media reports.
Read on for more details.
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April continues retreating trend in existing home sales
Posted Date: Thursday, May 23, 2024
Existing home sales saw another retreat month-over-month as well as year-over-year in April, according to the National Association of Realtors’ monthly report.
The trade organization’s chief economist noted the upper-end market is experiencing “a sizable gain” because of an increase in inventory.
Read on for more details.
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FHA updates Single-Family Housing Policy Handbook
Posted Date: Thursday, May 23, 2024
The Federal Housing Administration updated its Single-Family Housing Policy Handbook to clarify instructions, add guidance and incorporate previously published mortgage letters.
Updates were made to eligibility requirements for borrowers and to administrative policies and procedures such as the registration and management of branch offices.
Read on for more details.
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Need a RESPA refresh? Industry experts shed light on compliance challenges
Posted Date: Monday, May 20, 2024
A powerhouse of compliance experts from Foley and Lardner, LLP, Franzén and Salzano, Mayer Brown, Katten & Temple, LLP, and MLinc Solutions shared their insights into RESPA compliance challenges and what the industry can glean from lessons learned.
Read on for more details.
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Industry leaders take to the NS3 stage in Naples
Posted Date: Monday, May 20, 2024
More than 45 speakers will take the stage over three days this week at the 20th National Settlement Services Summit (NS3) at Naples Grande Beach Resort in Naples, Fla.
Over 600 attendees will hear from them during 18 sessions, beginning Tuesday, May 21.
Read on for more details.
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MBA, NAMB, Freedom Mortgage leaders discuss NAR settlement impacts
Posted Date: Monday, May 20, 2024
Freedom Mortgage Corp.’s wholesale division hosted a webinar on the settlement reached between the National Association of Realtors (NAR) and the plaintiffs in the Sitzer-Burnett class action accusing the trade organization and national mortgage brokers of violating antitrust laws through the adherence to NAR’s cooperative compensation rule.
The speakers shared how this settlement will impact mortgage brokers.
Read on for more details.
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Mortgage trouble in Maine results in RESPA questions
Posted Date: Monday, May 20, 2024
The U.S. District Court for the District of Maine heard a case against New Residential Mortgage, LLC, NewRez, LLC, and PHH Mortgage Corp. involving a RESPA complaint and an 80/20 mortgage loan.
Read on for more details.
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Flagstar parent company sells $5B in mortgage warehouse loans to JPMorgan Chase
Posted Date: Monday, May 20, 2024
New York Community Bancorp. (NYCB), the parent company of Flagstar Bank, is selling approximately $5 billion in mortgage warehouse loans to JPMorgan Chase Bank.
“[W]e are moving forward quickly to implement our strategic plan, which focuses on improving our capital, liquidity and loan-to-deposit metrics,” NYCB President and CEO Joseph Otting said about the sale.
Read on for more details.
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HUD Office of Housing Counseling receives almost $40M
Posted Date: Monday, May 20, 2024
The U.S. Department of Housing and Urban Development’s (HUD) Office of Housing Counseling will receive almost $40 million in funds to expand counseling services into underserved communities, according to Vice President Kamala Harris and HUD acting Director Adrianne Todman.
The two leaders announced the funding during Harris’ nationwide Economic Opportunity Tour on its stop in Milwaukee.
Read on for more details.
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Taylor Morrison exec to share keys to success as NS3 keynote
Posted Date: Thursday, May 16, 2024
Companies that embrace change and stay adaptable during market shifts are the ones that will succeed and grow.
That’s the message Taylor Morrison Executive Vice President and President of Financial Services Tawn Kelley plans to deliver in her keynote address at the National Settlement Services Summit (NS3) May 21-23 in Naples, Fla.
Read on for more details.
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October Research launches ‘Keys to Real Estate’ podcast
Posted Date: Thursday, May 16, 2024
October Research, LLC debuted its new “Keys to Real Estate” podcast, hosted by Chief Knowledge Officer Mary Schuster, on May 16.
Industry professionals can now hear from some of the most knowledgeable thought leaders on topics impacting the real estate transaction while on the go delivered weekly via various podcast platforms and YouTube.
Read on for more details.
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Rocket Mortgage settles fair lending complaint with HUD
Posted Date: Thursday, May 16, 2024
Rocket Mortgage LLC and the U.S. Department of Housing and Urban Development have entered into a conciliation agreement to resolve fair lending complaints against the mortgage provider accusing it of denying mortgage loan applications on tribal lands in a pattern of discrimination based on race.
The original complaint was filed by a couple who applied for a mortgage to purchase a single-family home within the boundaries of a Montana reservation.
Read on for more details.
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Top Tennessee brokerage joins Compass
Posted Date: Thursday, May 16, 2024
Tennessee’s number one real estate firm by sales volume has joined Compass, Inc., adding over 1,500 agents to the largest residential real estate brokerage in the country.
Compass stated its position in Nashville and overall presence in the southeastern U.S. was strengthened by the addition, as it continues to attract top talent nationwide.
Read on for more details.
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Salzano, Davis share perspectives on what makes a compliant AfBA
Posted Date: Monday, May 13, 2024
Franzén and Salzano President Loretta Salzano and Florida Agency Network and Closingsuite.com CEO Aaron Davis discussed maximizing compliance in affiliated business arrangements (AfBAs) and business operations.
This conversation was well-timed, with experts predicting an increase in AfBAs and other partnerships as the real estate industry adjusts to changes related to settlements in the antitrust cases against brokers and the National Association of Realtors.
Read on for more details.
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Batton plaintiffs request Sitzer-Burnett court enjoin proposed settlements; court approves anyway
Posted Date: Monday, May 13, 2024
The plaintiffs in the largest homebuyer class action related to real estate agent commissions cases filed against the National Association of Realtors and major real estate and mortgage brokers sought the delay of the approval of settlements proposed by Realogy Holdings Corp. (now operating as Anywhere Real Estate), RE/MAX LLC, and Keller Williams Realty, Inc. in Sitzer-Burnett.
Despite their request, the judge approved the proposed terms.
Read on for more details.
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Homebuying progress amongst low-income consumers stalls
Posted Date: Monday, May 13, 2024
Approximately 20 percent of new mortgages went to low-income consumers, the lowest percentage since 2018, according to a Redfin analysis of Home Mortgage Disclosure Act data covering the purchase of primary homes.
The broker also provided what it believes is the cause of this concerning trend.
Read on for more details.
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$5.5B distributed to boost affordable housing, community development, homeless assistance
Posted Date: Monday, May 13, 2024
More than 2,400 grants will be distributed to 1,200 communities to provide critical funding to support homeowners and renters, address homelessness, and improve public facilities and local economies.
States, urban counties, Puerto Rico, and localities across the country will receive $5.5 billion to fuel the Biden-Harris administration’s goals to bolster affordable housing and drive economic growth.
Read on for more details.
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Higher interest rates keep consumer sentiment restrained
Posted Date: Monday, May 13, 2024
Consumer sentiment about the housing market is threatening to stall once again, according to Fannie Mae’s Home Purchase Sentiment Index (HPSI) for April.
“The HPSI, unchanged this month, may have hit another plateau as consumers maintain their ‘wait and see’ approach to the housing market,” Fannie Mae Senior President and Chief Economist Doug Duncan said about the survey.
Read on for more details.
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Top FSC rep calls on agencies to address homelessness crisis
Posted Date: Monday, May 13, 2024
Ranking Member of the House Financial Services Committee Rep. Maxine Waters (D-Calif.) wrote letters to the leadership of the House Committee on Appropriations.
In them, she requested the committee fund certain initiatives to address the housing and homelessness crisis.
Read on for more details.
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Latest broker announcing commission compensation settlement to pay $9.25M
Posted Date: Thursday, May 9, 2024
In a filing with the Securities and Exchange Commission, Redfin Corp. stated it had entered into a proposed settlement to resolve pending class actions brought by homebuyers in the wake of the antitrust commission suits related to alleged violations of antitrust laws and the compensation of real estate agents.
This makes Redfin the 10th brokerage to reach a settlement with plaintiffs. The company agreed to pay $9.25 million to resolve allegations.
Read on for more details.
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The Bowtie Economist offers laughter as ‘spoonful of sugar’ to economic forecast
Posted Date: Thursday, May 9, 2024
Elliot Eisenberg, Ph.D., chief economist at GraphsandLaughs, LLC, has been repeatedly asked the same question quite a bit this year: when will the Fed cut interest rates?
The economist will answer that question and more as he shares his passion and knowledge of the housing market and economy at the National Settlement Services Summit (NS3) in Naples, Fla., providing laughs as he gives insight into what the industry can expect in the coming months.
Read on for more details.
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FHFA codifies UDAP compliance in fair lending final rule
Posted Date: Thursday, May 9, 2024
The Federal Housing Finance Agency’s fair lending final rule codified the fair lending oversight requirements for the secondary mortgage market.
The rule was commended by several organizations, including the National Fair Housing Alliance and the National Consumer Law Center.
Read on for more details.
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USAA, Nationstar defends against RESPA, state claims over modification confusion
Posted Date: Thursday, May 9, 2024
Defendants’ motions for judgment on the pleadings and to dismiss a complaint brought under RESPA and state consumer protection laws was considered by a U.S. district judge in the Western Division of the Northern District of Ohio.
The facts of the case involved a loss mitigation application and multiple notices of error to both the servicer and the subservicer of the loan.
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Charging a higher interest rate for credits prohibited for HECMs
Posted Date: Thursday, May 9, 2024
In a notice filed in the Federal Register, the U.S. Department of Housing and Urban Development announced a decision that the National Consumer Law Center’s co-director of advocacy said would remove the risk of older homeowners being charged in ways that would cost them more and reduce their home equity faster.
The announcement was related to a 2023 notice seeking public comment on proposed changes to the Federal Housing Administration’s Home Equity Conversion Mortgage for Purchase program.
Read on for more details.
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NAR-MLS settlement likely to fuel demand for AfBAs
Posted Date: Monday, May 6, 2024
Managing Attorney Marx Sterbcow of the Sterbcow Law Group addressed the audience at the Williston Financial Group’s Executive Summit on the future of affiliated business arrangements (AfBAs), with major industry shifts in motion and a rise in regulatory scrutiny.
RESPA News was able to get the highlights from two sessions to keep you in the compliance loop.
Read on for more details.
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NAR announces effective date for MLS settlement changes
Posted Date: Monday, May 6, 2024
The National Association of Realtors announced the effective date of changes required by the settlement reached earlier this year related to the offering of buyer broker commissions on multiple listing services.
The trade organization also shared the finalized details of what those policy changes look like.
Read on for more details.
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Couple brings ECOA, FHA claims over denied mortgage application in Maryland
Posted Date: Monday, May 6, 2024
The U.S. District Court for the District of Maryland considered a couple’s argument that the bank from which they attempted to procure a mortgage loan violated the Fair Housing Act and the Equal Credit Opportunity Act when it denied their application.
The property in question was owned by the U.S. Department of Housing and Urban Development, and a third-party appraisal was required before financing could be approved.
Read on for more details.
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Orgs challenge Florida law preventing certain countries’ citizens from buying real estate
Posted Date: Monday, May 6, 2024
The National Fair Housing Alliance, the Asian Real Estate Association of America, and other fair housing organizations have filed a fair housing discrimination suit challenging Florida’s law that essentially prevents people from certain countries from purchasing real property in the state.
According to Florida SB 264, the sale of any real property to Chinese nationals is prohibited, and sales to citizens from other countries are restricted from owning property within a certain distance of a military installation or critical infrastructure, largely barring them from most of the residential areas of the state.
Read on for more details.
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HUD issues guidance on the use of AI in fair housing
Posted Date: Monday, May 6, 2024
The U.S. Department of Housing and Urban Development voiced its concerns about the use of artificial intelligence in housing decisions and advertising and its potential impact on fair housing efforts.
To address potential discrimination issues and offer recommendations on best practices, the agency issued two guidance documents on the matter.
Read on for more details.
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NAR, MBA react to bipartisan real estate caucus
Posted Date: Monday, May 6, 2024
Reps. Mark Alford (R-Mo.), J. Luis Correa (D-Calif.), Tracey Mann (R-Kan.) and Brittany Pettersen (D-Colo.) are being credited with the creations of the Bipartisan Congressional Real Estate Caucus. The group is tasked with addressing the lack of housing affordability and inventory across the country.
The National Association of Realtors and the Mortgage Bankers Association were amongst the trade organizations reacting to the news.
Read on for more details.
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‘Algorithmic fairness’ techniques may eliminate bias in mortgage underwriting
Posted Date: Thursday, May 2, 2024
In a report issued by the National Fair Housing Alliance and FairPlay AI, a new algorithmic fairness methodology known as distribution matching was tested as a possible way eliminate bias in mortgage underwriting and pricing outcomes.
FairPlay AI CEO and founder Kareem Saleh said the report strongly indicated distribution matching could improve mortgage approval rates for Black and Hispanic homebuyers by 5-13 percent with no corresponding increase in risk.
Read on for more details.
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Pandemic redlining suit against Wells Fargo seeks class certification
Posted Date: Thursday, May 2, 2024
The plaintiffs in a lawsuit filed in 2022 accusing Wells Fargo of discriminatory lending practices during the pandemic, when interest rates were at record lows, have moved for class certification.
Plaintiffs’ interim lead counsel told RESPA News: “[T]he plaintiffs in our case took an important step in holding Wells Fargo accountable for its intentional and willful discriminatory policies, which remain in effect today.”
Read on for more details.
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California law related to housing density questioned by appellate court
Posted Date: Thursday, May 2, 2024
A case before the court of appeals in California asked the judges to determine whether a state bill granting cities and counties discretion to supersede local housing density caps violated the state’s constitution.
The judge who authored the opinion referred to the statewide housing shortage as a factor in the outcome.
Read on for more details.
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Pending home sales experience March perk-up
Posted Date: Thursday, May 2, 2024
March’s pending home sales experienced an uptick in three of the four major regions month-over-month, the National Association of Realtors’ numbers indicated.
The trade organization’s chief economist said the pending sales index for March marked the best pending sales performance in a year.
Read on for more details.
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