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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly
September 2024
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CFPB: Contracts-for-deed are subject to TILA, considered mortgage loans
Posted Date: Thursday, August 15, 2024
In concert with its field hearing on the same subject, the Consumer Financial Protection Bureau issued a report and an advisory opinion concerning contracts-for-deed, stating that according to its interpretation, the Truth in Lending Act applies to these agreements, and these products are residential mortgage transactions under Regulation Z.
The documents and the field hearing come after reports of contracts-for-deed being used to harm vulnerable populations looking for an affordable avenue to homeownership, such as immigrants and communities of color.
Read on for more details.
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NAR settlement practice changes go into effect
Posted Date: Monday, August 12, 2024
The changes related to the offering of buyer broker compensation implemented by the National Association of Realtors’ (NAR) settlement in the Sizer-Burnett case will go live soon, the organization reminded its members.
NAR recommended all multiple listing services install these changes by the upcoming deadline to remain in compliance with the organization’s policy.
Read on for more details.
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CFPB files brief addressing ‘junk fees’ in class action against Nationstar
Posted Date: Thursday, August 8, 2024
The Consumer Financial Protection Bureau critiqued Nationstar Mortgage’s response to a class action alleging the mortgage servicer violated the Fair Debt Collection Practices Act and provisions of contract law.
Notably, the bureau stated Nationstar violated the act by collecting payoff statement fees not expressly authorized by the agreement that created the debt, nor was the fee permitted by law.
This is the latest in the bureau’s fight against what it labels “junk fees.”
Read on for more details.
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Liquidated home insurance company leads to RESPA claim
Posted Date: Thursday, August 15, 2024
In the Southern District of Alabama, a U.S. district court considered the motion for summary judgment filed by the mortgage lender and servicer in a case where the servicer purchased insurance for a property after the original home insurance company that issued the policy liquidated.
According to the complaint, potential errors in the servicing of the escrow account resulted in inaccurate balances, causing default and a notice of foreclosure.
Read on for more details.
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Ownership restriction results in Realtor group bringing FHA claims
Posted Date: Monday, August 5, 2024
New Jersey Realtors brought a Fair Housing Act claim against a township over a change in land use ordinance dictating the ownership of age-restricted units by persons aged 55 years or older.
Specifically, the Appellate Division for the Superior Court of New Jersey considered the township’s requirement that the qualifying person who occupies an age-restricted unit also has an ownership interest in the unit.
Read on for more details.
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Cenlar response to QWR sparks RESPA, TILA action
Posted Date: Monday, August 12, 2024
In a case against Cenlar and CitiMortgage, a borrower brought actions under RESPA and the Truth in Lending Act after Cenlar failed to correct several issues on his account, did not adequately respond to his inquiries, and reported his account as delinquent to credit reporting agencies.
The court considered whether CitiMortgage could be liable under TILA, as it was not the original creditor that executed the loan, or if a vicarious liability theory applied, making CitiMortgage responsible for Cenlar’s alleged failures.
Read on for more details.
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New rule changes communication requirements with borrowers in default
Posted Date: Monday, August 5, 2024
The U.S. Department of Housing and Urban Development (HUD) issued a final rule updating communication requirements between mortgagors and mortgagees with loans insured by the Federal Housing Administration.
The rule incorporates changes to agency regulations “to better align” with modern electronic communication technology and mortgagor engagement preferences, HUD stated.
Read on for more details.
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New Jersey bank to pay $15M in redlining settlement
Posted Date: Wednesday, September 18, 2024
The U.S. Department of Housing and Urban Development announced the approval of a conciliation agreement with New Jersey-based OceanFirst Bank, resolving allegations the bank engaged in redlining.
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KVS Title to pay $1M penalty, dissolve 5 JVs in settlement
Posted Date: Thursday, August 29, 2024
KVS Title, LLC agreed to pay a $1 million penalty and wind down its five Washington, D.C., joint ventures with real estate agents, as part of a settlement with the D.C. Office of the Attorney General.
Read on for more details.
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Union Settlements to pay $325,000, close JV in settlement
Posted Date: Thursday, August 29, 2024
Union Settlements, LLC, agreed to pay $325,000 and dissolve its joint venture in Washington, D.C., as part of a settlement with the D.C. Office of the Attorney General.
Read on for more details.
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Modern Settlements to pay $65,000 in D.C. AG settlement
Posted Date: Thursday, August 29, 2024
Modern Settlements, LLC, agreed to pay $65,000 in penalties and divest real estate agents of their ownership interests in the business as part of a settlement with the D.C. Office of the Attorney General.
Read on for more details.
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Experts react to D.C. AG’s JV settlements
Posted Date: Thursday, August 29, 2024
RESPA News reached out to experts in the title industry and real estate compliance to hear their thoughts on the Office of the Attorney General (AG) for the District of Columbia’s settlements with four title insurance companies after the office’s investigation into the joint ventures indicated “the widespread use of illegal kickback schemes.”
Sources criticized some of the statements made in the AG’s press release, and another said this new interpretation could spell trouble for all affiliated business arrangements in the District.
Read on for more details.
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UPDATED: 4 JVs hit with $3.2M penalty for alleged kickbacks
Posted Date: Thursday, August 29, 2024
The Office of the Attorney General (AG) for the District of Columbia (D.C.) settled with four title insurance companies after an investigation into the joint ventures indicated “the widespread use of illegal kickback schemes” that limited D.C. homebuyers ability to shop for the best price and quality of work from settlement services providers.
Read on for more details.
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CFPB hits servicer with $5M fine for ‘illegal’ foreclosure practices
Posted Date: Monday, August 26, 2024
The Consumer Financial Protection Bureau (CFPB) ordered Fay Servicing to pay $5 million as a penalty for violating mortgage servicing laws and violating an agency order dating back eight years.
According to the CFPB’s release, Fay failed to implement the requirements listed in a June 2017 order to resolve illegal foreclosure practices.
Read on for more details.
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How to build a lucrative AfBA, from the experts
Posted Date: Monday, August 26, 2024
Florida Agency Network and Closingsuite.com CEO Aaron Davis and Chief Operating Officer Mike LaRosa, as well as The Duncan Duo Team at LPT Realty CEO Andrew Duncan, shared their insights into how to build a lucrative and compliant affiliated business arrangement at the National Settlement Services Summit (NS3) in Naples, Fla.
Read on for more details.
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Chase, Fannie Mae at heart of RESPA, TILA, RICO claim
Posted Date: Monday, August 26, 2024
Potentially misapplied additional mortgage payments led to plaintiffs making several requests for information about their mortgage loan, as well as a flurry of federal claims against JP Morgan Chase Bank as the loan’s servicer.
Issues with the loan went back as far as 2009, according to the complaint. The plaintiffs argued both the mortgagee and the servicer were benefiting from additional interest payments.
Read on for more details.
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AREA opens its membership
Posted Date: Monday, August 26, 2024
The American Real Estate Association, an alternative to the National Association of Realtors (NAR), has opened its doors to members.
Mauricio Umansky and Jason Haber founded the organization earlier this year after NAR faced allegations of sexual harassment and its leadership faced attempted blackmail.
Read on for more details.
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Existing home sales experience July bump up
Posted Date: Monday, August 26, 2024
Existing home sales experienced an increase in July, marking the end of a months-long decline. According to the National Association of Realtors’ data, home prices saw another uptick as well.
The organization’s senior economist said consumers are seeing more choices, and the chokehold on affordability is experiencing some relief with lower interest rates.
Read on for more details.
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Bill addresses affordable homes in rural America
Posted Date: Monday, August 26, 2024
Sen. Peter Welch (D-Vt.) introduced legislation that would provide more financing options for homeowners in rural America.
The bill amends the Housing Act of 1949 and the U.S. Department of Agriculture’s Section 502 mortgage assistance program.
Read on for more details.
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NCRC welcomes new team members
Posted Date: Wednesday, August 21, 2024
The National Community Reinvestment Coalition (NCRC) hired Devin Mack as director of fair and equitable opportunity, Simon McNeil as executive director of NCRC Community Development Fund, and Rosemary Ramirez as corporate counsel and director of compliance.
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Fourth Circuit determines whether RESPA, TILA apply to HELOCs
Posted Date: Monday, August 19, 2024
The U.S. Court of Appeals for the Fourth Circuit considered an appeal that asked whether RESPA and the Truth in Lending Act apply to home equity lines of credit.
The Consumer Financial Protection Bureau and the American Bankers Association both appeared as friendly parties to the case, with the latter supporting the defendant-appellee.
Read on for more details.
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NAR appoints new CEO as settlement changes take effect
Posted Date: Monday, August 19, 2024
The new CEO said she is “clear eyed” about the National Association of Realtors’ (NAR) past and present, and is “hyper-focused” on building trust with NAR’s many stakeholders.
Read on for more details.
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CFPB report highlights ongoing improvements to consumer financial literacy
Posted Date: Monday, August 19, 2024
The Consumer Financial Protection Bureau (CFPB) released its Financial Literacy Annual Report, breaking down the bureau’s strategies to promote financial self-efficacy and to disseminate financial information to a diverse audience.
The CFPB develops programs and offers resources to address gaps in the information about financial services, products and practices provided by consumer financial service providers, the report stated.
Read on for more details.
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FHFA considers additional support for affordable housing initiatives via FHLBank system
Posted Date: Monday, August 19, 2024
The Federal Housing Finance Agency is considering whether to increase the share of net income from the Federal Home Loan Banks (FHLBanks) set aside for affordable housing program initiatives.
The agency explained its reasoning in its FHLBank System at 100: Focusing on the Future report and received support from the Treasury Department despite concerns expressed by state banking advocates.
Read on for more details.
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Foreclosure activity on the rise
Posted Date: Monday, August 19, 2024
According to the July foreclosure market report issued by ATTOM, a real estate data curating firm, there was an increase in foreclosures both month-over-month and year-over-year year, indicating a potential shift in the housing market as 2024 continues.
The report indicated there were 31,929 properties in various stages of foreclosure in July, up 15 percent compared with June’s numbers and up 0.2 percent compared with July 2023. These filings included default notices, scheduled auctions or bank repossessions.
Read on for more details.
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Aid available for homeowners recovering from Hurricane Debby
Posted Date: Monday, August 19, 2024
To address the damages wrought by Hurricane Debby, the U.S. Department of Housing and Urban Development is offering support to homeowners as they recover from what the White House designated a major disaster on Aug. 10.
Read on for more details.
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Largest U.S. MLS implements compensation requirements early
Posted Date: Thursday, August 15, 2024
The California Regional Multiple Listing Service (CRMLS) rolled out changes to its platform and policy ahead of the required implementation date for the new compensation rules. In its resource center, it warned users of its citation policy and the potential fines for violating the new requirements.
“It remains our highest priority to ensure CRMLS users adapt to thrive in our rapidly evolving environment,” the organization stated. “With a forward-thinking approach, CRMLS has been preparing for the upcoming changes resulting from the proposed NAR [National Association of Realtors] settlement for quite some time.”
Read on for more details.
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Nearly all metro areas register home price gains in Q2
Posted Date: Thursday, August 15, 2024
Almost 90 percent of metro markets (199 out of 223, or 89 percent) recorded home price gains in the second quarter (Q2), as the 30-year fixed mortgage rate ranged from 6.82 percent to 7.22 percent, according to the National Association of Realtors’ (NAR) latest quarterly report.
Thirteen percent of the 223 tracked metro areas experienced double-digit price gains over the same period, down from 30 percent in the first quarter (Q1).
Read on for more details.
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$100M in grants made available for housing availability efforts
Posted Date: Thursday, August 15, 2024
The U.S. Department of Housing and Urban Development (HUD) announced the availability of $100 million in competitive grant funding to cut red tape, build more homes and lower the costs of renting and buying a home.
HUD also stated it is launching a $250 million “Legacy Challenge” to enable communities to take on legacy projects that will transform and revitalize neighborhoods.
Read on for more details.
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Brown pushes for information on rising home insurance prices
Posted Date: Monday, August 12, 2024
Sen. Sherrod Brown (D-Ohio), chairman of the Senate Committee on Banking, Housing, Urban Affairs, sent missives to the federal insurance office director and the comptroller general of the United States about the rising costs of coverage and what the housing insurance market can do to help ensure homeowners have the coverage they need.
Brown listed out the challenges consumers have been facing in recent years: long-time insurance customers now find their policies dropped, coverages capped, premiums dramatically increased, or limited liability or even no availability of coverage because insurers have left the state.
Read on for more details.
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Fannie: Consumer frustration evident as only 17 percent say ‘good time’ to buy home
Posted Date: Monday, August 12, 2024
Fannie Mae’s Home Purchase Sentiment Index decreased in July, receding from the improved score observed in June. Despite surveys showing consumers’ desire to own a home, only 17 percent answered that right now was a “good time” for it.
Affordability seemed to be the most prevalent factor in consumers’ responses, the enterprise stated.
Read on for more details.
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Support made available for families struggling after Hawaii wildfires
Posted Date: Monday, August 12, 2024
The U.S. Department of Housing and Urban Affairs has taken new actions to support homeowners and borrowers in Maui County, Hawaii, who are still struggling after wildfires destroyed their homes last year.
Support included new flexibilities, such as a waiver lifting the requirement that effected borrowers apply for 203(h) financing by the one-year anniversary of the disaster, the agency stated.
Read on for more details.
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White House initiative references CFPB rulemakings, AI
Posted Date: Monday, August 12, 2024
The Biden-Harris administration released a plan for a renewed multi-agency regulatory effort to address corporate practices that officials claim unnecessarily waste consumers’ time.
Of note, the plan referenced the Consumer Financial Protection Bureau and potential rulemakings related to artificial intelligence.
Read on for more details.
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House looks to streamline homebuilding regulations to improve affordability
Posted Date: Thursday, August 8, 2024
The House Financial Services Committee Subcommittee on Housing and Insurance met to discuss “Housing Solutions: Cutting Through Government Red Tape.”
They aimed to address the housing inventory shortage by making it easier for new homes to be built, thereby making homes more affordable.
Read on for more details.
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Majority of potential homebuyers cite November election as a significant factor
Posted Date: Thursday, August 8, 2024
A survey conducted by Veterans United Home Loans found a majority of respondents who planned to buy a home in the next three years cited the 2024 election as a factor in their purchasing timeline.
Veterans and civilians had differing opinions on whether it was better to wait until after Election Day.
Read on for more details.
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Recent homebuyers have ‘immense interest’ in digital mortgage process
Posted Date: Thursday, August 8, 2024
Those who recently purchased a home reported using a hybrid in-person/digital approach more often than not, and a majority of this demographic expressed an “immense interest” in having a more or fully digital mortgage process.
Fannie Mae surveyed homebuyers who purchased a home with a mortgage acquired by the enterprise between January 2023 and November 2023 to gain a better understanding of the adoption rates of digital technology in mortgage originations as well as consumers’ overall experience.
Read on for more details.
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Experts talk strategies in a post-NAR settlement market
Posted Date: Monday, August 5, 2024
Saul Ewing Partner Francis “Trip” Riley and Florida Agency Network CEO Aaron Davis were featured in October Research LLC’s “Strategies for a post-NAR settlement market” webinar, moderated by RESPA News Editor Elizabeth Childers.
They answered questions about the impact of the National Association of Realtors’ settlement in the Sitzer-Burnett case on real estate agents, title agents, and current marketing strategies.
Read on for more details.
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Research shows initial impact of NAR settlement on buyer agent compensation
Posted Date: Monday, August 5, 2024
Redfin’s analysis of multiple listing service data indicated a drop in commission earnings for buyers’ agents, especially since the announcement of the settlement agreed to by the National Association of Realtors to resolve class action lawsuits claiming the organization and national brokers violated antitrust laws.
The report showed while the actual dollar amounts earned are slightly higher than they were at the beginning of the year, it was not because of commission percentages, but due to the increase in home prices.
Read on for more details.
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Pending home sales in June indicate brighter market
Posted Date: Monday, August 5, 2024
June’s pending home sales experienced an uptick month-over-month, indicating the increase in inventory is leading to additional contract signings.
The National Association of Realtors’ chief economist said the current trends show buyers in a more favorable position than previous months, and while multiple offers are still being made, the process is “less intense.”
Read on for more details.
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Bill reintroduced to ‘tackle’ housing crisis
Posted Date: Monday, August 5, 2024
Rep. Emanuel Cleaver (D-Mo.), ranking member of the Housing and Insurance Subcommittee of the House Committee on Financial Services, and Sens. Elizabeth Warren (D-Mass.) and Raphael Warnock (D-Georgia) reintroduced a bill that aims to provide millions of housing units over the next decade and save low- and moderate-income families an average of $140 per month.
Read on for more details.
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