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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly
February 2023
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Look back on 20 years of RESPA News with Shulman, Arouh and Andreano
Posted Date: Monday, January 30, 2023
RESPA News spoke to former editor Robin Wardzala and RESPerts Phil Schulman, Jeff Arouh, and Rich Andreano for a lookback at where RESPA News came from, what big moments we’ve seen in RESPA history, and what issues we have seen stand the test of time.
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CFSA files opposition to CFPB cert, cross petition with SCOTUS
Posted Date: Thursday, January 19, 2023
Community Financial Services Association of America Ltd., the named plaintiff from the Fifth Circuit decision holding the Consumer Financial Protection Bureau’s (CFPB) funding structure as unconstitutional, filed a motion in opposition to the bureau’s petition for writ of certiorari and filed its own cross petition.
Instead of focusing on the question related to whether Congress unconstitutionally abdicated its appropriations power to the CFPB, the interest group requested the Supreme Court address different reasons why the Payday Lending rule should be vacated.
Read on for more details.
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Court considers servicer’s plea to reinstate property lien
Posted Date: Thursday, January 19, 2023
In a bankruptcy proceeding out of the middle district of Alabama, the U.S. Court of Appeals for the 11th Circuit heard the argument of a mortgage servicer whose property lien was extinguished despite the total amount owed not being paid.
The debtor’s bankruptcy plan purportedly eradicated all remaining outstanding payments on her mortgage beyond the servicer’s claims for past-due arrearages, calling to question whether the bankruptcy code’s anti-modification provision superseded one on finality.
Read on for more details.
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Court considers whether landlord was on notice about tenant’s disability
Posted Date: Monday, January 16, 2023
In a case out of the Ninth Circuit’s Court of Appeals, the court heard the appeal of a partial summary judgment in favor of a landlord who denied the plaintiff’s rental application because of a “no dog” policy.
The plaintiff alleged the denial was discriminatory in nature and a violation of the Fair Housing Act.
Read on for more details.
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Court considers whether delay in granting a reasonable accommodation violated FHA
Posted Date: Thursday, January 12, 2023
In a lawsuit heard by the U.S. District Court, District of Oregon, the court considered whether a landlord’s delay in granting a resident’s reasonable accommodation request for a parking spot, and later for signage designating the spot as hers, was a violation of the Fair Housing Act.
The court also opined on a second request the plaintiff made, where she requested property management to assign her a second space that was already designated to another tenant to make her assigned spot accessible.
Read on to learn about the court’s holding.
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Court hears agency law, standing argument in RESPA kickback case
Posted Date: Monday, January 30, 2023
A bank argued in front of the U.S. District Court, District of Maryland it could not be held liable for kickbacks made to one of its employees, claiming it was outside the scope of his position to receive payment for referrals to a specific title company.
The class action suit also was challenged by the assertion the plaintiffs lacked standing because they failed to establish they suffered concrete injury.
Read on for more details.
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Industry reacts to White House’s blueprint for tenant bill of rights
Posted Date: Monday, January 30, 2023
The White House’s Domestic Policy Council and National Economic Counsel published a white paper titled the Blueprint for a Renters Bill of Rights meant to support the development of practices promoting fairness for Americans who rent their homes.
Goals in this blueprint include safe, quality, accessible, and affordable housing, clear and fair leases, and the right for renters to organize.
To learn how agencies and organizations are reacting to the guidelines, read on.
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Court considers whether six chickens too many for an reasonable accommodation
Posted Date: Monday, January 30, 2023
U.S. District Court for the Eastern District of Michigan, Southern Division, considered the city of Southgate’s motion for summary judgment in a matter where the plaintiff filed a complaint alleging violations of the Fair Housing Act and Michigan’s Persons with Disabilities Civil Rights Act for failing to accommodate his disability.
The accommodation request was related to six chickens the plaintiff kept as emotional support animals.
Read on for more details.
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FHLBank welcomes new member to affordable housing council
Posted Date: Monday, January 30, 2023
The Federal Home Loan Bank of Dallas reappointed four of its Affordable Housing Advisory Council members and welcomed a new face to the table.
The newest addition has 25 years of affordable housing finance experience and has worked to develop initiatives and policies to maximize the impact of state affordable housing programs.
Read on for more details.
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HUD awards Cleveland funds for affordable housing
Posted Date: Monday, January 30, 2023
The U.S. Department of Housing and Urban Development awarded a loan guarantee to Cleveland to finance the construction of affordable housing in the downtown area.
“Prioritizing affordable housing units with historic preservation isn’t just good for our economy,” Marion McFadden, principal deputy assistant secretary for the agency’s Office of Community Planning and Development, said. “It gives families a new opportunity to strive for more, once they have rent they can afford.”
Read on for more details.
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Court grants debtors’ motion on escrow deficiency
Posted Date: Monday, January 23, 2023
In a bankruptcy case out of Kansas, a bank-mortgagee did not file a response to debtors’ notice of final cure payment at the end of their Chapter 13 plan. Instead, it sent a letter to them seeking increased monthly payments because of an escrow deficiency.
The court considers which party should be responsible for the escrow account shortage.
Read on for more details.
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HUD issues NPR to address affordable housing crisis
Posted Date: Monday, January 23, 2023
U.S. Department of Housing and Urban Development Secretary Marcia Fudge said an imminent notice of proposed rulemaking will remedy the effects of discrimination in housing and help to foster affordable housing opportunities.
The proposed rule will simplify required fair housing analysis, emphasize goal-setting, increase transparency for public review and comment, and provide mechanisms for regular program evaluations and greater accountability.
Read on for reactions to the news.
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Wells Fargo to shift gears on home lending
Posted Date: Monday, January 23, 2023
Wells Fargo announced it will be exiting the correspondent lending business and it will be reducing the size of its servicing portfolio.
This is part of its plan to focus its home lending business on serving bank customers as well as individuals and families in minority communities.
Read on for more details.
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Income discrimination has racial implications in Memphis
Posted Date: Monday, January 23, 2023
The National Fair Housing Alliance examined economic and racial discrimination in housing and how it impacted accessibility to affordable housing in Memphis, Tenn.
The report was issued in collaboration with the NAACP Legal Defense Fund. Conducted over three years, it found issues such as “no Section 8” policies, voucher tenant quotas, and steering.
Read on for more details.
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Sourcepoint named ‘leader’ in market segment
Posted Date: Monday, January 23, 2023
Sourcepoint, a fintech company that provides products and services for the mortgage industry, was recognized as a leader by NelsonHall’s assessment of mortgage services providers.
“All credit goes to our incredible team for this recognition, which highlights our expertise across the mortgage origination and servicing lifecycle,” Sameer Ahluwalia, Sourcepoint president and global head of its BFS vertical, said.
Read on for more details.
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Enterprise reduction in fees sparks reactions from officials, interest groups
Posted Date: Monday, January 23, 2023
The Federal Housing Finance Agency announced Fannie Mae and Freddie Mac (the Enterprises) would be making changes to their single-family pricing framework by redesigning and recalibrating upfront fee matrices for purchase, rate-term finance, and cash-out refinance loans.
Of note, it was announced the upfront fee for commingled securities would be reduced starting May 1.
Read on for industry reaction.
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Contracts awarded to orgs to advance racial equity in housing
Posted Date: Thursday, January 19, 2023
Five organizations received delivery-based contracts from Fannie Mae as part of its Sustainable Communities Innovation Challenge, a competition to help advance racial equity in housing.
The challenge is part of Fannie Mae’s initiative to develop collaborative, cross-sector approaches to advance sustainable communities and generate solutions for housing issues.
Read on for more details.
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Black real estate agents, brokers discuss discrimination
Posted Date: Thursday, January 19, 2023
While racial equity is frequently discussed in terms of borrowers and homeowners, Black real estate agents and brokers share the challenges they face “selling houses while Black.”
Their stories include police arriving when showing a home, being snubbed at open houses by potential buyers, and how they combat prejudice in their industry.
Read on for more details.
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CFPB updates servicer examination procedures
Posted Date: Thursday, January 19, 2023
The Consumer Financial Protection Bureau’s mortgage servicing examination procedures were updated for the first time since 2016.
These updates cover forbearance, streamlined loss mitigations options, and integrate focus areas from the bureau’s supervisory highlights findings.
Read on for more details on the updates.
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CFPB provides insight to newly supervised entities
Posted Date: Monday, January 16, 2023
The Consumer Financial Protection Bureau provided a bird’s eye view of its examination process for entities being supervised by the agency for the first time.
In this communication, the bureau discussed the reasons for supervision, the benefits, and a general description of the process.
Read on for more details.
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Record-breaking settlement reached in redlining case
Posted Date: Monday, January 16, 2023
The Department of Justice reached an agreement with one of the 50 largest banks in the U.S. related to alleged redlining practices in Los Angeles County.
In addition to $31 million to compensate impacted individuals and communities, the settlement also requires investing in advertising and targeted outreach and the opening of a new branch.
Read on for more details.
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Landlord to pay over $140K for FHA violation
Posted Date: Monday, January 16, 2023
A landlord in Plano, Texas, will pay damages, civil penalties, and attorney’s fees totaling over $140,000 for violating the Fair Housing Act by refusing to rent to a Black woman because of race.
The respondents attempted to argue they fell under the “Mrs. Murphy” exemption, which generally applies to dwellings with four or fewer residential units and the owner occupies one of those units.
Read on for more details.
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Sagent appoints new COO
Posted Date: Monday, January 16, 2023
Sagent appointed one of their own to chief operations officer (COO), tasking her with accelerating the company’s development of its cloud-native software.
The new COO joined the company’s board of directions in 2020 and will remain on the board as she steps into her new role.
Read on for more details.
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Financial Services subcommittee leadership, jurisdiction announced
Posted Date: Monday, January 16, 2023
As leadership switches parties in the House of Representatives, the new chair of the House Committee on Financial Services Patrick McHenry (R-NC) also announced the subcommittees, their chairs, and their jurisdiction for the 118th Congress.
“This slate of subcommittee chairs will be the drivers of our policy agenda centered around economic prosperity for all Americans,” McHenry said.
Read on for more details.
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Mortgage performance improved in Q3
Posted Date: Thursday, January 12, 2023
The Office of the Comptroller of the Currency found an overall improvement in mortgage performance during the third quarter of 2022.
Notably, the metrics report showed 97.2 percent of mortgages were current and performing at the end of the quarter, compared with 95.6 percent a year earlier.
Read on for more details.
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DOJ, Meta reach advertising agreement
Posted Date: Thursday, January 12, 2023
The Department of Justice and Meta Platforms Inc., formally known as Facebook, Inc., reached an agreement related to its advertisement delivery system.
The agreement is the culmination of a lawsuit alleging the technology and social media conglomerate violated the Fair Housing Act via algorithmic bias and discriminatory ad delivery.
Read on for details about the groundbreaking agreement.
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Pandemic homebuying boosted by financial benefits
Posted Date: Thursday, January 12, 2023
It is no secret the real estate industry experienced record-breaking highs during the COVID-19 pandemic.
That, combined with the sharp drop in home sales this past year, prompted Fannie Mae to look into what actually drove purchase demand in 2020 and 2021 and what has changed. While many considered the change in social behavior brought on by the pandemic as a primary influencer for homebuyers, this study found that was not necessarily the case.
Read on for more details.
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RAD conversion to facilitate affordable housing
Posted Date: Thursday, January 12, 2023
The Office of Multifamily Housing at the U.S. Department of Housing and Urban Development closed a rental assistance demonstration (RAD) transaction with the Albany Housing Authority in Albany, NY.
The demonstration facilitates the long-term of affordability by supporting existing options and creating new opportunities for rental housing.
For more details about the RAD conversion, read on.
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Court considers whether servicer’s failure to consider modification violated RESPA
Posted Date: Monday, January 9, 2023
Whether a foreclosure action was proper was determined by the Appellate Court of Maryland. The case arose from a foreclosure proceeding initiated in June 2019.
The plaintiff argues the defendants repeatedly failed to provide the pre-mediation documentation as required by law; all loss-mitigation options had not been exhausted; the appellees provided affidavits containing false information; and the court failed to recognize the “unclean hands” of the substitute trustees.
Read on for more details.
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Court allows case related to FHA, zoning laws to go to trial
Posted Date: Monday, January 9, 2023
In a case brought by the president of a non-profit against the city of Howell, Mich., over its zoning laws, the court considered whether claims the municipality violated the Fair Housing Act could continue to trial.
In the first part of the series, RESPA News shared the facts that led to causes of action under the Fair Housing Act, the Americans with Disabilities Act, and the local civil rights provision. It now discusses the court’s decision.
Read on for more details.
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Study considers how mortgage shopping, education impacts borrowers’ costs
Posted Date: Monday, January 9, 2023
Fannie Mae’s white paper on borrower attributes and mortgage shopping behavior showed while borrower race is an abiding issue in mortgage lending, costs for borrowers also can vary based on lender type, shopping approach, or education.
The study considered 1.1 million mortgages acquired by Fannie Mae with closing data submitted from September 2017 to September 2019, making this one of the largest studies of detailed mortgage costs.
Read on for more details.
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Fewer people buying homes, despite rent inflation
Posted Date: Monday, January 9, 2023
The Consumer Financial Protection Bureau’s Office of Research shared how inflation has impacted the price of rent, how renters have been dealing with this increase, and while homeownership can mitigate some risks, it is not without its own.
Results from a Zillow Observed Rent Index showed rent price growth was about 26 percent from October 2020 to October 2022. Despite this, fewer renters have been transitioning to homeownership, as rising interest rates and elevated home prices are more likely to keep them out of the market.
Read on for more details.
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Gruenberg sworn in as FDIC Chair
Posted Date: Monday, January 9, 2023
Martin Gruenberg, a member of the Federal Deposit Insurance Corp.’s board since August 2005, was sworn in as the agency’s 22nd chairman.
He is joined by the new vice chairman and a new director.
Read on for more details.
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Court asks, ‘What is a borrower?’ in RESPA case
Posted Date: Thursday, January 5, 2023
Whether the plaintiff has standing turned on how the U.S. District Court, Southern Division of Florida interpreted the definition of “borrower” as used in RESPA.
The plaintiffs sued because their mortgage servicer allegedly failed to provide a timely and proper response to the loan modification application they submitted. The defendant asserted the plaintiffs lacked standing because their names were not on the executed promissory note.
Read on for more details.
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Zoning laws heart of FHA lawsuit
Posted Date: Thursday, January 5, 2023
The president of a non-profit with the mission to provide affordable transitional housing for women battling addiction, along with the Fair Housing Center of Southeast and Mid Michigan, Inc., brought a suit against the city of Howell, Mich., over its zoning laws.
The complaint alleged the city failed to reasonably accommodate requests for exemption from a moratorium on applications for special land use permits and from restrictive zoning laws preventing the creation of transitional housing for women recovering from opioid abuse.
Read on for more details.
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Tennessee landlord found liable for sexual harassment
Posted Date: Thursday, January 5, 2023
After the trial was postponed for two years because of the pandemic, a federal jury found a Tennessee landlord guilty of sexually harassing women at his rental properties in violation of the Fair Housing Act.
“No one should have to endure sexual harassment in order to have a safe and secure living situation,” U.S. Attorney Kevin Ritz for the Western District of Tennessee said.
Read on for more details.
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HMDA filing period open
Posted Date: Thursday, January 5, 2023
The filing period for data required by the Home Mortgage Disclosure Act (HMDA) is open as of Jan. 1.
Those required to report will have until March 1 to submit their data and be considered timely.
To read more about HMDA filing requirements, read on.
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Waters says farewell with committee review
Posted Date: Monday, January 2, 2023
Rep. Maxine Waters (D-Calif.) said farewell as chair of the House Committee on Financial Services with a report of what was achieved during her four years of leadership.
Among the highlights are the creation of the Diversity and Inclusion Subcommittee, hearings related to the housing crisis, and bill provisions ensuring assistance for consumers during the COVID-19 pandemic.
Read on for more details.
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Court grants Wells Fargo summary judgment in Cook County case
Posted Date: Monday, January 2, 2023
In a recent opinion, the U.S. District Court of the Northern District of Illinois reviewed three motions filed by Wells Fargo in a case where Cook County, Ill., is alleging the bank discriminated against minority borrowers in its mortgage servicing practices, causing the county to incur increased costs associated with foreclosure proceedings.
Wells Fargo filed two motions requesting the county’s expert witness testimony be thrown out, and a third for summary judgment.
Read on for more details.
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Realty company sued by Florida for ‘loan alternative’ plan
Posted Date: Monday, January 2, 2023
Florida Attorney General Ashley Moody filed a lawsuit against a real estate company for its “loan alternative” program, which offers consumers small dollar amounts in exchange for entering into an agreement designating the real estate company to be the exclusive listing broker for a period of 40 years.
Moody’s complaint alleges the contract is “unfair and unconscionable” and members of Congress are calling for review of the program by the Federal Trade Commission and the Consumer Financial Protection Bureau.
Read on for more details.
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Household financial health on decline, survey says
Posted Date: Monday, January 2, 2023
The most recent Making Ends Meet consumer survey by the Consumer Financial Protection Bureau showed household financial health is on the decline for the first time since 2019.
The data showed most consumers are not financially prepared for a disruption to their main source of income. The bureau found more people were struggling to pay their bills in 2022 than they were in 2021.
Read on for more details from the report.
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DOJ, Alabama housing authority agree to anti-discrimination settlement
Posted Date: Monday, January 2, 2023
The Department of Justice (DOJ), the Housing Authority of Ashland, Ala., and two local property owners have received approval for their consent order by the U.S. District Court for the Northern District of Alabama.
The DOJ had brought charges against the group after an investigation revealed alleged discrimination on the basis of race.
Read on for more details.
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CFPB makes Reg Z threshold adjustments
Posted Date: Monday, January 2, 2023
The Consumer Financial Protection Bureau issued a final rule amending the official interpretations for Regulation Z, the implementing regulation for the Truth-in-Lending Act.
As required annually by statute, the rule revises the dollar amounts for certain provisions impacting credit cards, Home Ownership and Equity Protection Act loans, and qualified mortgages.
Read on for more details.
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