|
|
News By Edition
|
RESPA News Monthly Edition
RESPA News Monthly
April 2013
This month, the Consumer Financial Protection Bureau continued its investigation of possible RESPA violations involving captive reinsurance agreements, a legislator questions whether CFPB funding should be withheld and Richard Cordray’s nomination as bureau director moves to the Senate. Also this month, voters in a RESPA News readers’ poll decided that President Obama’s recess appointment of Cordray was unconstitutional. RESPA-related cases made significant movement in the courts this month. Federal courts reviewed cases involving captive reinsurance arrangements, affiliated business arrangements and qualified written requests. RESPA News took an in-depth look at how the CFPB’s mortgage servicing regulations will affect the industry. We told you how your use of social media can violate RESPA. We also covered significant Truth in Lending Act lawsuits and provided you with informative RESPA tips. Be sure to check out the April 2013 issue for these articles and more. |
|
Joe Casa Awards nomination deadline this week
Posted Date: Monday, March 25, 2013
October Research, LLC, announced that the deadline for the prestigious Joe Casa Awards nominations is March 31. Real estate, mortgage and settlement services professionals are invited to nominate colleagues for awards in leadership, innovation or philanthropy.
|
|
|
Data standardization key issue in building mortgage loan database
Posted Date: Monday, March 25, 2013
As the CFPB and FHFA move towards the development of the proposed National Mortgage Database, achieving standardization of data from disparate public and private resources is going to present one of the biggest challenges. But it isn’t the only issue they will be confronting in the coming months. In this second of our three-part series on the creation of the proposed database, we look at how the data will be sourced, the challenge of maintaining accuracy, and how the data eventually may be used.
|
|
|
New York cracks down on force-placed insurance
Posted Date: Monday, March 25, 2013
Governor Andrew Cuomo announced a settlement with Assurant Inc. that includes a $14 million penalty. Cuomo said the force-placed insurance industry has helped to push financially distressed families into foreclosure, and he warned other servicers to make changes now.
|
|
|
Loan modification talks should have halted foreclosure, borrower claims
Posted Date: Monday, March 25, 2013
After she lost her home in a foreclosure sale, a borrower filed suit against Quicken Loans, Bank of America, and Mortgage Electronic Registration Systems, alleging that she did not receive the required notices. The borrower said the defendants violated state law because she was in talks with them regarding a modification of her loan, and she was allegedly told that a foreclosure sale would not take place. The district court dismissed the borrower’s claims. Read on to find out what the 6th U.S. Circuit Court of Appeals decided.
|
|
|
Are the mortgage servicing regulations too harsh?
Posted Date: Monday, March 25, 2013
The Consumer Financial Protection Bureau’s mortgage servicing regulations require servicers to implement new procedures and policies that are, without question, stricter than the current regulatory obligations. Was the bureau fair to the industry when it set those requirements? According to Rick Sharga, executive vice president at Carrington Mortgage Holdings and Steven Horne, president and chief executive officer with Wingspan Portfolio Advisors, the answer to that question is: It depends.
|
|
|
Court admonishes attorneys for misuse of TILA
Posted Date: Thursday, March 21, 2013
The law firm representing two borrowers in a state foreclosure action sent a letter to the borrowers’ servicer pursuant to the Truth in Lending Act requesting information regarding the master servicer on the loan. When the servicer did not provide all the information requested, the firm filed a suit in federal court, alleging violations of TILA. Upon reviewing the facts of the case, the court found that the borrowers had not suffered harm and that the attorneys were attempting to misuse the statute for their own benefit.
|
|
|
Will the new servicing standards help the industry?
Posted Date: Thursday, March 21, 2013
When the Consumer Financial Protection Bureau released its new servicing regulations, many in the residential mortgage servicing industry knew they were in for significant changes. Now those servicers have the task of implementing procedural and policy modifications in order to remain compliant. Although the regulations may seem extensive and burdensome, is it also possible that they are better for the industry? Rick Sharga, executive vice president at Carrington Mortgage Holdings, thinks that the new rules could bring about some positive effects.
|
|
|
Equitable tolling saves captive reinsurance claims in RESPA class action
Posted Date: Thursday, March 21, 2013
The plaintiffs in a RESPA class action alleged that their lender used a captive reinsurance arrangement to illegally accept kickbacks in exchange for referrals of business. RESPA’s statute of limitations for this type of violation is one year. The plaintiffs, however, filed the lawsuit more than a year after the alleged violations. The lender and other defendants filed motions to dismiss, arguing that the claims were time-barred and RESPA claims cannot be equitably tolled. The court disagreed.
|
|
|
Cordray heads to the Senate
Posted Date: Thursday, March 21, 2013
The U.S. Senate Committee on Banking, Housing and Urban Affairs voted on March 19 to approve President Barack Obama’s nomination of Richard Cordray as director of the Consumer Financial Protection Bureau. Cordray’s next step is a full Senate vote.
|
|
|
|
Should CFPB funding be withheld?
Posted Date: Monday, March 18, 2013
That’s the question Rep. Jeb Hensarling is asking the Federal Reserve Board to answer. Now that Richard Cordray’s position as director of the Consumer Financial Protection Bureau is in question, Hensarling wants the Fed to explain how funds can be transferred to the bureau when the agency does not have a valid director in place.
|
|
|
TILA notice of right to cancel not clear, borrowers say
Posted Date: Monday, March 18, 2013
A borrower sued her lender under the Truth in Lending Act, arguing that she was entitled to rescission of her loan because the lender failed to provide her with a clearly and conspicuously disclosed notice of her right to cancel the loan. She argued that an arbitration notice also provided to her was inconsistent with the notice of right to cancel and as such, rendered the right to cancel notice invalid. The lower court dismissed the case, finding that the borrower’s TILA claim failed because she did not file her lawsuit within three years. The appeals court disagreed, finding that her claim was still valid but stating that it failed for other reasons.
|
|
|
Proving actual damages causes snag in RESPA suit
Posted Date: Monday, March 18, 2013
In a RESPA action, a couple alleged that their servicer failed to respond to their qualified written requests in violation of Section 2605. The couple claimed they suffered actual damages including distress, anxiety and damage to their credit. They also maintained that they were entitled to statutory damages because the defendants engaged in a pattern or practice of noncompliance. The lower court dismissed the claims. Read on to find out what the U.S. 10th Circuit Court of Appeals decided.
|
|
|
CFPB structure, transparency debated at Cordray hearing
Posted Date: Thursday, March 14, 2013
During Richard Cordray’s confirmation hearing before the U.S. Senate Committee on Banking, Housing and Urban Affairs, the committee focused on concerns about the Consumer Financial Protection Bureau’s structure, accountability and transparency.
|
|
|
Could your use of social media violate RESPA?
Posted Date: Thursday, March 14, 2013
According to the Federal Financial Institutions Examination Council, the answer to that question is yes. The FFIEC published proposed guidance instructing supervised institutions as to the applicability of consumer protection laws and social media. RESPA News spoke to David Tallman, a partner at K&L Gates LLP, about what this guidance means and what types of social media actions could violate RESPA. Read on to find out what pitfalls to beware of and how you can use social media and remain RESPA compliant.
|
|
|
CFPB’s use of enforcement attorneys in question
Posted Date: Thursday, March 14, 2013
The Federal Reserve’s Office of Inspector General updated its Work Plan on March 8 to include the evaluation of the Consumer Financial Protection Bureau’s use of enforcement attorneys during the examination process.
|
|
|
Borrower sues over marked up appraisal fee
Posted Date: Thursday, March 14, 2013
A borrower sued his lender in California state court, arguing the lender violated RESPA when it marked up the price of his appraisal and failed to itemize the services that made up the appraisal fee. The borrower argued that he was charged more than the appraiser was paid and that the excess was for services not performed. He also argued that if additional services were performed, they must be itemized on the HUD-1 Settlement Statement. The lower court disagreed and granted the defendants’ motion to dismiss. Read on to find out what the appeals court decided.
|
|
|
|
New loan servicing rule is one of many that needs your attention - Webinar
Posted Date: Monday, March 11, 2013
Under a mandate by the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) released a final rule on Jan. 17 on new mortgage servicing standards, amending Regulation X and Regulation Z. This rule was one of many released by the CFPB in January, and like the others, it requires training, retooling and the implementation of new policies and procedures this year.
RESPA News is hosting a 90-minute educational webinar on Thursday, March 21, 2 pm ET on the components of the final rule and how to comply with its various parts. The webinar is Part 1 of a 3-part series covering a host of RESPA and mortgage-related topics.
|
|
|
Two plead guilty in $15 million mortgage fraud scam
Posted Date: Friday, March 8, 2013
A former property manager and one of his co-conspirators pled guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering in connection with a $15 million mortgage fraud scam that used fake documents and straw buyers.
|
|
|
Court lacks jurisdiction to hear RESPA suit
Posted Date: Friday, March 8, 2013
After a couple lost their home to foreclosure in state court, they sued their lender in federal court, alleging violations of the Truth in Lending Act, RESPA and the Fair Debt Collection Practices Act. The defendants filed a motion to dismiss, arguing that the court lacked subject-matter jurisdiction. Read on to find out why the court agreed with the defendants.
|
|
|
Borrowers file RESPA suit over transfer of service
Posted Date: Friday, March 8, 2013
Two mortgage loan borrowers sued their servicer, arguing that the servicer violated RESPA when it failed to notify them that their mortgage loan had been transferred to it. The servicer filed a motion to dismiss, arguing the plaintiffs’ claims lacked merit. The court agreed. Read on to find out why.
|
|
|
Court compels documents in captive reinsurance class action
Posted Date: Friday, March 8, 2013
In a class action suit regarding captive reinsurance the plaintiffs filed a motion to compel, seeking the production of all documents that defendants PHH Corp. and Atrium Reinsurance Co. have produced to the Consumer Financial Protection Bureau in connection with its investigation of the companies. PHH and Atrium argued that the request was overbroad and unduly burdensome. Read on to find out the facts of the case and what the court decided.
|
|
|
Government seeks to dismiss CFPB constitutionality suit
Posted Date: Thursday, March 7, 2013
Weeks after eight attorneys general announced their intentions to join a lawsuit challenging the constitutionality of the Consumer Financial Protection Bureau’s formation, the government filed a motion to dismiss the case, arguing that the plaintiffs lack standing.
|
|
|
Cordray prepares for another showdown
Posted Date: Thursday, March 7, 2013
The last time Richard Cordray faced a Senate panel considering his nomination as the director of the Consumer Financial Protection Bureau, the end result was a highly controversial recess appointment made by President Obama that, to this day, is still being questioned. Cordray is again set to go before a Senate committee for a nomination hearing, and only time with tell what the end result will be this time around.
|
|
|
FHFA plans to wind down Fannie and Freddie
Posted Date: Thursday, March 7, 2013
The Federal Housing Finance Agency released its 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac and announced that the enterprises’ market presence will be reduced over time and that a new business entity will be established.
|
|
|
Captive reinsurance: The CFPB isn’t letting this one go
Posted Date: Thursday, March 7, 2013
In late February, several companies filed U.S. Securities and Exchange Commission forms indicating that the Consumer Financial Protection Bureau is investigating them for possible RESPA violations and that the investigation is both extensive and industry-wide.
|
|
|
|
Court says servicer could be liable for actual and statutory damages in RESPA class action
Posted Date: Monday, March 4, 2013
A residential mortgage loan borrower filed a class action suit against his servicer, arguing that the servicer failed to respond to his qualified written requests as required under RESPA. The borrower alleged that he sustained actual damages because of the servicer’s actions and that, because there was a pattern of noncompliance, the servicer is also liable for statutory damages. Read on to find the facts of the case.
|
|
|
Who will the CFPB share your information with?
Posted Date: Monday, March 4, 2013
The Consumer Financial Protection Bureau released its final rule on disclosure of records and information, indicating that it will use its discretionary authority to share confidential information with state agencies. When the bureau published its interim final rule in July 2011, it received comments that questioned whether the CFPB should share confidential information so freely. The bureau, however, stated that it has the authority under the Dodd-Frank Act to decide how it shares confidential information.
|
|
|
Lender argues couple waived TILA right of rescission
Posted Date: Monday, March 4, 2013
Husband and wife borrowers sued their lender, seeking to rescind their mortgage loan and damages pursuant to the Truth in Lending Act. The lender argued that because the couple had transferred the property to their family living trust, their right to rescind was terminated. The lender further argued that the couple waived their rights under TILA when they entered into a forbearance agreement. Read on to find out what the court decided.
|
|
|
Federal court refuses to dismiss sham affiliated business arrangement claims
Posted Date: Monday, March 4, 2013
In a RESPA-based class action against Wells Fargo, Long & Foster Real Estate and Prosperity Mortgage Co., a federal court denied the defendants’ joint motion for summary judgment as to the plaintiffs’ claims that they formed a sham affiliated business arrangement. The court found that there were legitimate questions of fact as to whether the joint venture was a sham and if it violated RESPA. The defendants argued that RESPA Section 8(c)(4) is not independently actionable, but rather sets forth an exclusion that expressly permits AfBAs. Read on to find out why the court disagreed.
|
|
|
| Monthly Newsletter |
|
Cover Story:
|
|