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RESPA News Monthly  <Br>May 2023

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RESPA News Monthly
May 2023
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RESPerts provide guidance on CFPB digital comparison shopping opinion
Posted Date: Monday, April 24, 2023
Mayer Brown partner Holly Bunting and associate Kerri Webb shared with RESPA News how the Consumer Financial Protection Bureau’s advisory opinion on dealings with digital comparison shopping platforms has impacted how the industry is approaching their relationships with these entities.

The two members of Mayer Brown’s Financial Services Regulatory and Enforcement practice said the industry found the guidance useful, though it did raise some questions the bureau left unanswered.

Read on for more details.

 
HUD Secretary Fudge testifies before appropriations subcommittee
Posted Date: Thursday, April 20, 2023
U.S. Department of Housing and Urban Development Secretary Marcia Fudge testified before the House Appropriations Committee’s Subcommittee on Transportation, Housing and Urban Development and related agencies about the proposed 2024 budget for the agency.

From details from her statement, read on.

 
McGuireWoods partners offer advice on JVs for real estate agents
Posted Date: Thursday, April 13, 2023
In a white paper on joint ventures (JV), partners from McGuireWoods LLP shared how what appears to be a JV can actually be a cover for real estate agents receiving payment for referring work to a specific title agency, a RESPA violation.

The two also shared how these arrangements can violate the Consumer Financial Protection Act.

Read on for more details.

 
Court hears Georgia counties’ fair lending case against Wells Fargo
Posted Date: Thursday, April 20, 2023
A U.S. district judge in the Northern District of Georgia, Atlanta Division considered Wells Fargo’s motion to dismiss and motion for partial summary judgment in a case where multiple counties alleged the bank engaged in a broad, predatory lending scheme targeting their minority citizens.

Fulton, DeKalb and Cobb counties filed the suit.

Read on for more details.

 
Appellate court references Chevron in ECOA case
Posted Date: Thursday, February 22, 2024
The Tenth Circuit Court of Appeals heard a case brought under the Equal Credit Opportunity Act and the Fair Housing Act. The plaintiffs alleged First United Bank violated these anti-discrimination laws when it denied their loan application for funds to purchase an apartment complex.

The three circuit judges referenced Chevron deference in its opinion, calling it a “disfavored canon of statutory construction.”

Read on for more details.

 
Mutual mistake gives rise to reverse mortgage property dispute
Posted Date: Monday, April 17, 2023
The U.S. District Court for the Middle District of Alabama, Northern Division, considered Reverse Mortgage Solutions’ (RMS) motion for summary judgment in a case where a portion of the property description was left off a reverse mortgage agreement.

The plaintiff asserted she was the fee simple owner of the excluded property and was entitled to a declaration of ownership and an injunction prohibiting RMS from interfering.

Read on for more details.

 
Zillow denies all wrongdoing in $15M settlement over kickback allegations
Posted Date: Thursday, April 13, 2023
Two lawsuits filed in 2017 resulted in a settlement where Zillow will pay $15 million to shareholders.

The real estate marketplace maintained it did nothing wrong when it delayed disclosing to shareholders its co-marketing program was being investigated by the Consumer Financial Protection Bureau for potential RESPA violations. Shareholders claimed the omission resulted in inflated stock prices.

Read on for more details.

 
Kickback allegations warrant amended complaint
Posted Date: Monday, April 24, 2023
In a case out of the Eastern District of North Carolina, plaintiffs alleged CrossCountry Mortgage, LLC and Raleigh Realty, Inc. violated RESPA’s kickback provision when closing out their home purchase in 2021.

They stated Raleigh Realty improperly influenced their selection of a mortgage lender, and one or more of Raleigh Realty’s branches received money from CrossCountry for doing so.

Read on for more details.

 
DOJ, CFPB talk redlining at New Jersey forum
Posted Date: Monday, April 24, 2023
Leaders from the Department of Justice’s (DOJ) Civil Rights Division and the Consumer Financial Protection Bureau, along with a U.S. district attorney and the New Jersey attorney general, discussed combined efforts to combat redlining.

“[W]e will continue to hold all types of mortgage lenders – not just traditional banks – but also mortgage companies and credit unions accountable when they engage in discriminatory redlining practices,” DOJ Assistant Attorney General Kristen Clarke said.

Read on for more details.

 
Existing-home sales decline while starter homes get multiple offers
Posted Date: Monday, April 24, 2023
The existing-home sales report by the National Association of Realtors (NAR) showed decreases in these numbers across all four regions of the U.S.

Its chief economist called this housing market “unique,” as while sale rates decline, starter homes continue to receive multiple offers.

Read on for more details.

 
Former Marine to lead Cenlar cybersecurity team
Posted Date: Monday, April 24, 2023
Cenlar, a mortgage loan subservicer, welcomed a former U.S. Marine Corp. officer with 20 years of intelligence experience as director of information security.

Working with Cenlar’s cybersecurity team, the new addition will address current and emerging risk, facilitate improvements to compliance policies and procedures, and support cyber engineering function.

Read on for more details.

 
First Tribal Intergovernmental Advisory Committee convenes
Posted Date: Monday, April 24, 2023
The U.S. Department of Housing and Urban Development hosted its first Tribal Intergovernmental Advisory Committee meeting.

The two-day event included tribal leaders from across the country who discussed nation-to-nation relationships with tribal governments, tribal sovereignty, housing needs and challenges, and funding for tribal housing and community development programs.

Read on for more details.

 
NPR issued for FHFA fair lending oversight rule
Posted Date: Thursday, April 20, 2023
The Federal Housing Finance Agency issued a notice of proposed rulemaking, requesting input on the formalization of its practices and programs related to fair housing and fair lending oversight.

Once published in the Federal Register, interested parties will have 60 days to submit their comments.

Read on for more details on the proposed regulation.

 
NAR: Middle-income homeowners gained $120K from home appreciation
Posted Date: Thursday, April 20, 2023
The National Association of Realtors’ report on wealth gains showed middle-income homeowners have gained an average of over $120,000 in wealth via home price appreciation over the last decade.

The organization noted the data showed substantial variations and inequalities in homeownership rates across different income and racial and ethnic groups.

Read on for more details.

 
Fannie Mae updates Equitable Housing Finance Plan
Posted Date: Thursday, April 20, 2023
Fannie Mae updated its Equitable Housing Finance Plan for this year.

Katrina Jones, vice president of racial equity, strategy, and impact, said the changes would help to reduce or remove barriers to sustainable homeownership for those historically excluded from the housing finance system.

Read on for more details.

 
CFPB clarifies ‘abusive conduct’ precedent
Posted Date: Monday, April 17, 2023
The Consumer Financial Protection Bureau (CFPB) issued a policy statement on what it considers to be “abusive conduct” in consumer financial markets.

CFPB Director Rohit Chopra said the Consumer Financial Protection Act’s ban on abusive conduct was rooted in a century of history and supported by a decade of bureau precedence.

Read on for more details.

 
Senator reveals ROAD to Housing Act framework
Posted Date: Monday, April 17, 2023
Ranking Member Tim Scott (R-S.C.) of the Senate Committee on Banking, Housing, and Urban Affairs said his framework for the Renewing Opportunity in the American Dream to Housing Act will take a comprehensive view of federal housing policy and introduce “long-needed” reforms across the entire housing market.

Read on for more details.

 
National MI, Blend integrate
Posted Date: Monday, April 17, 2023
National Mortgage Insurance Corp. (National MI), a subsidiary of NMI Holdings, Inc., and Blend, a company offering cloud-based banking solutions for financial providers, have integrated, giving lenders using Blend’s loan officer toolkit access to National MI’s Rate GPS tool.

Read on for more details.

 
Director of servicing, asset management welcomed at CBC Mortgage
Posted Date: Monday, April 17, 2023
CBC Mortgage Agency welcomed a seasoned servicing executive as its new director of servicing and asset management.

The new addition will be responsible for servicing oversight and loss mitigation activity on all first and second mortgages.

Read on for more details.

 
FHA policy seeks to increase affordable financing
Posted Date: Monday, April 17, 2023
The Federal Housing Administration issued a request for feedback on its drafted mortgagee letter on increasing access to affordable financing, specifically for properties with accessory dwelling units.

 
Land use, zoning reforms recommended to promote affordable housing
Posted Date: Thursday, April 13, 2023
The U.S. Department of Housing and Urban Development’s Office of Policy Development and Research shared its suggested land use and zoning reforms that would promote affordable and fair housing.

Read on for more details.

 
Pending home sales continue to rise
Posted Date: Thursday, April 13, 2023
The National Association of Realtors’ Pending Home Sales Index showed pending home sales continued to grow in the month of February.

The increase marks the third month moving in an upward trend for the housing market.

Read on for more details.

 
Executive changes made to Cenlar compliance team
Posted Date: Thursday, April 13, 2023
Cenlar FSB welcomed a new chief compliance officer (CCO) and appointed its former CCO to senior vice president of core operations.

The new CCO also sits on the Mortgage Bankers Association’s Legal Issues and Regulatory Compliance Committee.

Read on to learn more about the changes.

 
FDIC highlights RESPA kickback issues in supervisory report
Posted Date: Monday, April 10, 2023
In its Consumer Compliance Supervisory Highlights, the Federal Deposit Insurance Corp. noted enforcement actions it took in 2022 related to RESPA and the Fair Credit Reporting Act.

TILA was the most frequently cited statute for enforcement, totaling 35 percent of all violations last year.

Read on to learn what RESPA violations the agency addressed in 2022.

 
RESPA claim asserts servicer failed to respond to QWRs
Posted Date: Monday, April 10, 2023
A judge in the U.S. District Court, Western Division of Washington, ruled on a servicer’s motion for summary judgment in relation to RESPA allegations against them.

The plaintiffs stated the servicer violated the act by failing to respond to multiple qualified written requests and improperly reporting information to credit reporting agencies.

To learn about the holding, read on.

 
CFPB appeals Townstone decision
Posted Date: Monday, April 10, 2023
The Consumer Financial Protection Bureau filed its notice of appeal in the U.S. District Court for the Northern District of Illinois, challenging the court’s decision to dismiss its case against Townstone Financial.

The court dismissed the case earlier this year after holding the bureau was overreaching its statutory authority in attempting to apply Equal Credit Opportunity Act protections to prospective loan applicants.

Read on for more details.

 
Pro se attorney attempts TILA class action suit against Rocket Mortgage
Posted Date: Monday, April 10, 2023
An attorney in New York filed a suit against Rocket Mortgage, LLC as an individual and on behalf of others similarly situated, asserting the lender violated the Truth in Lending Act and Regulation Z, among other state law claims.

The judge considered Rocket’s motions to dismiss.

Read on for more details.

 
Cornerstone Servicing announces subservicing business
Posted Date: Monday, April 10, 2023
A division of Cornerstone Capital Bank, Cornerstone Servicing, launched a subservicing business it stated is designed to empower homebuyers to be smart lifelong homeowners and fuel sustainable growth for lenders.

The Cornerstone Servicing president said these subservicing solutions are customizable and will eliminate common pain points for homeowners.

Read on for more on this new venture.

 
COVID-19 forbearance, HECM extension policies extended
Posted Date: Monday, April 10, 2023
The Federal Housing Administration extended COVID-19 forbearance and home equity conversion mortgage extension policies through May 31.

The extension was issued in anticipation of the Biden-Harris administration ending the public health emergency declaration that defined the pandemic.

Read on for more details.

 
Court holds servicing ends when default begins
Posted Date: Monday, April 3, 2023
In a case out of the U.S. District Court of the Northern District of Illinois, Eastern division, a judge considered a defendant’s motion to dismiss claims under the Fair Debt Collection Practices Act, RESPA, and state anti-fraud law.

The claim involved a 2008 mortgage the plaintiff has not made payments on since September 2017. The court was considering whether the servicer failed to properly respond to requests for information and notices of error.

Read on for more details.

 
Bank of America, Safeguard face suit over REO treatment
Posted Date: Monday, April 3, 2023
Bank of America and its servicer Safeguard Properties Management, LLC, have been accused of discrimination by the National Fair Housing Alliance and other housing interest groups.

The groups asserted the bank and servicer’s treatment of real estate owned properties violated the Fair Housing Act because it handled properties owned by white consumers and consumers of color differently in the wake of the 2008 financial crisis.

To learn the U.S. District Court of Maryland’s holding, read on.

 
Two partners join Garris Horn, LLP
Posted Date: Monday, April 3, 2023
Garris Horn, LLP welcomed two litigation attorneys as partners.

Richard Horn, co-managing partner of the firm, said the additions allow the firm to provide their clients “the most efficient and nimble one-stop shop for compliance, litigation, transactional and enforcement defense work.”

Read on for more details.

 
CFPB: State disclosure laws consistent with TILA
Posted Date: Monday, April 3, 2023
After the conclusion of the comment period on whether the Truth in Lending Act preempts New York and other state’s commercial financial law, the Consumer Financial Protection Bureau stated there were no inconsistencies between the federal and state legislation to warrant preemption.

Read on to find out why.

 
ICBA asks CFPB to approve new TRID template
Posted Date: Monday, April 3, 2023
The Independent Community Bankers of America (ICBA) and 42 state banking associations urged Rohit Chopra, director of the Consumer Financial Protection Bureau, to approve a proposed template for TILA/RESPA integrated disclosures.

ICBA stated the proposed template will provide greater clarity for consumers, streamline the process for community lenders, and expand access to more affordable homes in rural areas with limited supply.

Read on for more details.

 
NSPIRE program places focus on resident unit conditions
Posted Date: Monday, April 3, 2023
In its efforts to strengthen standards for conditions in agency-assisted and insured housing, the U.S. Department of Housing and Urban Development published a proposed scoring notice for the National Standard for the Physical Inspection of Real Estate.

The department is requesting industry feedback on these standards, due by April 27.

Read on for more details.

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RESPA News Monthly
May 2025

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CFPB asks to vacate settlement with Townstone, citing misconduct by CFPB


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12 USC Section 2605 or Section 6 is titled Servicing of mortgage loans and administration of escrow accounts. It pertains to qualified written requests, notices of transfer of servicing and the administration of escrow accounts.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
12 USC Section 2609 or Section 10 is titled Limitation on requirement of advance deposits in escrow accounts. It governs escrow accounts including notifications and statements to borrowers. Section 10 also sets out penalties for those who violate the section.
RESPA Section 3 provides that a thing of value includes any payment, advance, funds, loan, service or other consideration

Regulation X says thing of value includes: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses or reduction in credit against an existing obligation.
A form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form represents the closing transaction and provides each party with a complete list of incoming and outgoing funds. RESPA requires the HUD-1 to be used as the standard real estate settlement form in all transactions in the U.S. involving federally related mortgage loans.
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