Browse articles from all of our Newsletters related to RESPA.

December 8, 2016 - Inside Mortgage Finance

PHH, U.S. Solicitor General Due to Respond to Appeals Ruling in Long-Running Case With CFPB

The DC Circuit Court of Appeals recently ordered PHH Corp. to respond to the Consumer Financial Protection Bureau’s petition for an en banc rehearing in the long-running dispute over alleged violations of the Real Estate Settlement Procedures Act. The lender’s response is due late this week. The court has also invited the U.S. solicitor general to weigh in on the constitutional and RESPA questions associated with the case. No timetable was suggested. However, industry legal observers expect the USSG to respond promptly, given the pending change of presidential administrations, and to support the bureau’s positions. Attorneys at the BuckleySandler law firm noted...

December 8, 2016 - Inside Mortgage Finance

Trump Has Vowed to Clamp Down on Regulations, But He Faces Limited Unilateral Powers, Long Odds

During his successful campaign for the White House, then-candidate Donald Trump won applause and support from the business community for his promise to substantially cut back on federal regulations. Many in the mortgage lending community had hopes the plan would include some relief from the mortgage regulations issued by the Consumer Financial Protection Bureau. Among other things, Trump said he would issue a temporary moratorium on “new agency regulations that are not compelled by Congress or public safety [and] cancel immediately all illegal and overreaching executive orders.” Richard Horn, who worked on the CFPB’s integrated-disclosure rulemaking known as TRID, said...

November 28, 2016 - Inside the CFPB

Other News in Brief

Securitization Group Meets with CFPB Officials. Earlier this month, staff and members of the Structured Finance Industry Group met with CFPB Director Richard Cordray and other senior officials to talk about the state of the non-agency mortgage securities market and some of the factors hampering its return.... Mortgage Lenders Meet With Bureau, Other Regulators, to Discuss Diversity, Inclusion. A small group of mortgage lenders recently met with staff of the CFPB, the Federal Reserve, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency and the Office of the Comptroller of the Currency to discuss best practices on how to develop and maintain diversity and inclusion programs within the mortgage industry, according to an account by the Mortgage Bankers Association....

November 28, 2016 - Inside the CFPB

TRID 2.0: The Comments - Industry Supports ‘Rebaselining’ Proposal, But Voices Caution

Some top industry players support the CFPB’s proposed amendment to its existing TRID rule that clarifies a lender’s ability to use a revised closing disclosure (CD) to reset tolerance baselines for fees and charges, as long as there are valid changes of circumstances. However, they think a few simple tweaks could maximize the usefulness of the change without creating an incentive for lenders to act in such a way as to defeat the bureau’s intention. The proposal clarifies that the authority to “rebaseline” exists for all CDs – not just the initial CD – and that for any CD issued after the first one, there is no timing requirement, and no timing limitation on the issuance of the initial CD. That means ...

November 28, 2016 - Inside the CFPB

TRID 2.0: The Comments - More Clarity Needed for TRID Effective Dates, Industry Says

Another area in which the CFPB sought industry input in its TRID clarifying rulemaking process is whether the proposed 120-day implementation period, starting from final publication in the Federal Register, will be adequate. Some industry commenters essentially said no. Others basically said, it depends. Wells Fargo was one of the commenters that fell into the former camp. “[S]ome of the clarifications in this proposal have already been implemented by the majority of the industry based on previous informal guidance from the bureau,” said the lender. “However, this proposal also contains a number of changes that are new or that are being proposed with more detailed direction than previously offered.” Some examples the lender cited were the proposed expansion to the ...

November 28, 2016 - Inside the CFPB

TRID 2.0: The Comments - More Changes Needed to TRID’s Cash-to-Close Table, Industry Says

The CFPB has made progress in its regulatory treatment of the cash-to-close table as reflected in its proposed rule to clarify aspects of its integrated disclosure rule, but more needs to be done, some leading industry groups said. “The cash-to-close sections of the Loan Estimate and Closing Disclosure represent some of the most challenging aspects of the TRID rule,” said the Real Estate Services Providers Council in a comment letter to the bureau. “The industry had noted that a failure of the prior disclosures was that they did not provide for disclosing to the consumer the lender’s estimate of the cash that he or she would need to close the loan,” it added. Further, the industry did not indicate that ...

November 28, 2016 - Inside the CFPB

TRID 2.0: The Comments - Industry Weighs in on Disclosing Lender and Seller Credits

As part of its TRID 2.0 clarifying rulemaking, the CFPB sought comment on whether lenders should have the option of disclosing lender or seller credits as either credits specific to particular charges or general credits applicable to settlement costs. The Mortgage Bankers Association suggested the CFPB give lenders options and not settle on one approach. “Some lenders would prefer a single approach; others indicate that optionality is likely necessary,” the trade group said in a recent comment letter. It noted that seller credits are governed by sales contracts between the buyer and seller, and that local custom frequently comes into play as to who pays a specific fee, such as owner’s title insurance. “Similarly, the particular application of lender credits ...

November 28, 2016 - Inside the CFPB

CFPB Files Appeal in High-Stakes, High-Profile Dispute With PHH

With CFPB Director Richard Cordray’s tenure possibly on the line while a pro-business President-elect Donald Trump works on staffing up his incoming administration, the bureau earlier this month filed its highly anticipated appeal to the full U.S. Court of Appeals for the District of Columbia Circuit in its long-running dispute with PHH Corp. Back in mid-October, in PHH Corp. v. CFPB, a three-judge panel of the court nixed the agency’s $109 million penalty against the lender under the Real Estate Settlement Procedures Act, and determined that the CFPB’s leadership structure was unconstitutional because it is run by a sole director who can only be removed for cause. While an appeal by the bureau was widely expected, the issue took on ...

November 23, 2016 - Inside Mortgage Finance

CFPB Asks Appeals Court to Reconsider Questions of Constitutionality, Legality of Tying Arrangements

The Consumer Financial Protection Bureau late last week filed its much-anticipated petition with the U.S. Court of Appeals for the DC Circuit to reconsider some of the key holdings made by a three-judge panel of the court against the agency in PHH Corp. v. CFPB back in mid-October. One such holding was the panel’s determination that the CFPB’s leadership structure is unconstitutional because it is run by a sole director who can only be removed by the president for cause. While an appeal by the bureau was widely expected, the issue took on a new urgency after Republican real estate developer Donald Trump won the presidential election. In its petition, the CFPB asserted...

November 14, 2016 - Inside the CFPB

Other News in Brief

Vendor Provides TRID-Oriented Video Content. Fast Forward Stories, a Bellingham, WA, provider of “brand-able” video content for the mortgage, title and real estate industries, recently released a download-ready library of 26 mortgage explainer videos on the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule (TRID).... ICYMI: Here’s What Happens to Fines, Penalties Levied by the CFPB. A new report from the Government Accountability Office summarizes what happens to the fines and penalties the CFPB imposes on financial institutions for mortgage-related offenses, as follows ...

November 14, 2016 - Inside the CFPB

CFPB’s Enforcement, UDAAP Authority at Stake in PHH Case

The recent decision by the U.S. Court of Appeals for the District of Columbia Circuit in the dispute between the CFPB and PHH Corp. has some significant enforcement implications for the bureau, according to a top compliance attorney. At stake in particular is the bureau’s authority to enforce federal consumer financial protection laws as well as the Consumer Financial Protection Act (CFPA) prohibition of unfair, deceptive, or abusive acts or practices (UDAAP). In a recent client note, Barbara Mishkin, of counsel in the Philadelphia office of the Ballard Spahr law firm, noted that among the court’s findings was that the Real Estate Settlement Procedures Act’s three-year statute of limitations (SOL) applies to the agency’s administrative enforcement actions. “Not only did ...

November 14, 2016 - Inside the CFPB

GSEs Endorse Aspects of TRID That Support Uniform Closing Dataset

Government-sponsored enterprises Fannie Mae and Freddie Mac recently expressed support for those portions of the CFPB’s TRID clarifying rulemaking that facilitate their Uniform Closing Dataset, which they developed to support the accurate disclosure of data on the closing disclosure. “The GSEs believe that the bureau should retain the current status of the sample forms, specifically, as model forms under the Truth in Lending Act and standard forms under the rule pursuant to authority under the Real Estate Settlement Procedures Act,” Fannie and Freddie said in a recent comment letter to the bureau. “Much of the required text of the integrated disclosure is dynamic. It is not contained in the blank forms, and instead is only illustrated when the form is ...

November 14, 2016 - Inside the CFPB

TRID 2.0 Poses Software Implementation Challenges

Implementing the changes that the CFPB is proposing to its TRID rule will involve the deployment of a considerable amount of resources, time and energy, software vendors told the bureau recently. In a comment letter sent to the bureau, DocMagic said that many of the agency’s proposed changes would require a substantial amount of reprogramming by not only technology vendors but also by creditors, investors and settlement agents. “In addition, each programming change would need to be tested to ensure the software integrations among the thousands of companies in the industry work properly,” the company said. DocMagic also pointed out that it operates SmartCLOSE, which is a collaborative closing portal that allows creditors and settlement agents to collaborate to complete ...

November 14, 2016 - Inside the CFPB

TRID 2.0: The Comments: Rule Causes Tension to Flare Between Industry Factions

  Some of the public comments submitted to the CFPB regarding its TRID 2.0 clarifying rulemaking highlight tensions and rivalries that have emerged between different factions in the homebuying and mortgage-making industry since the original integrated disclosure rule took effect. In its comment letter on the bureau’s proposal, one point of emphasis that JPMorgan Chase raised is that lenders need better cooperation from settlement agents. “The success of the rule largely depends on the collaboration of a…

November 10, 2016 - Inside Mortgage Finance

RE/MAX Launches Franchise Business to Put Mortgage Brokers in Real Estate Offices

RE/MAX Holdings is working to place mortgage brokers in real estate brokerage locations using a franchise model that the firm has used to become the top residential home seller. Officials at RE/MAX stress that the Motto Mortgage effort is compliant with stringent regulations regarding the mixing of real estate agents and mortgage offerings. Dave Liniger, CEO of RE/MAX, said many real estate agents and brokerages are eager to work closely with loan originators. “However, compliance remains...

November 10, 2016 - Inside Mortgage Finance

CFPB, Dodd-Frank May Be in the Crosshairs of Trump Administration, GOP-Controlled Congress

Mortgage lenders and servicers could see a dramatic change in the regulatory environment following the election of Donald Trump as president with a GOP-controlled Congress. During a campaign of many and sometimes conflicting promises, Trump vowed to repeal the Dodd-Frank Act, which would require Congressional action and, if carried out in its entirety, would abolish the Consumer Financial Protection Bureau. Some observers think a more likely outcome is a restructuring of the CFPB itself and curbing of some regulatory and enforcement actions, perhaps with new leadership. Mortgage lending issues were...

November 4, 2016 - Inside Nonconforming Markets

CFPB Urged to Formalize Guidance on TRID

Participants in the non-agency market are concerned that the Consumer Financial Protection Bureau hasn’t done enough to provide lenders and investors with certainty regarding the liability associated with the TILA-RESPA Integrated Disclosure rule. The CFPB issued a proposed rule in August that would clarify a number of concerns regarding TRID. But the bureau’s proposed rule didn’t include guidance CFPB Director Richard Cordray had detailed in a Dec. 29 letter to the Mortgage ...

November 3, 2016 - Inside Mortgage Finance

Fannie, Freddie Concede Industry’s Point on UCD Reporting Burden, Postpone Requirement for a Year

After hearing lenders’ concerns about the increased reporting burden they would face from some of the changes that Fannie Mae and Freddie Mac want to make to their Uniform Closing Dataset requirements, the two government-sponsored enterprises agreed to postpone the requirement to provide the seller closing data for one year. “The GSEs understand the difficulties that acquiring the seller data presents, particularly as many lenders are still working through their processes to obtain the seller closing disclosure and data from settlement companies,” the pair said late last month in letters to the Mortgage Bankers Association. “In recognition of these challenges, the GSEs have agreed...

October 31, 2016 - Inside the CFPB

Inside the CFPB Full Issue October 31, 2016 (PDF)

View Inside the CFPB Full Issue October 31, 2016 (PDF)

October 31, 2016 - Inside the CFPB

Other News in Brief

TRID Implementation Inconsistency Among Lenders Continues to Drive Title Agent Costs. The First American Real Estate Sentiment Index for the third quarter of 2016 found that lenders are inconsistently implementing the CPFB’s integrated disclosure rule, and that is driving up costs for title agents.... Mortgage Complaints Still High, But Drop Noticeably in 3Q16 From Year-Ago Levels. The latest monthly consumer complaint report from the CFPB found that mortgages remain among the top three sore spots for borrowers, but had a noticeable drop from the third quarter of 2015 to the same period this year....

October 31, 2016 - Inside the CFPB

Cordray Suggests Diagnostic Enforcement Will Continue

Comments by CFPB Director Richard Cordray at last week’s Mortgage Bankers Association conference in Boston indicate that the industry can expect the bureau’s diagnostic approach to enforcing the TRID rule will continue, apparently until further notice. “As I told you last year, in our examination work around compliance with this rule, we and the other regulators have pledged to be sensitive to the progress made by lenders that are squarely focused on making good faith efforts to come into compliance with the rule on time,” Cordray said. “We have also said that our approach would be diagnostic and corrective, not punitive. That is precisely what we are doing.” This means that the regulators will evaluate a company’s compliance management system ...

October 31, 2016 - Inside the CFPB

Tech Vendors Say the Industry Needs at Least One Year to Comply

A number of industry software and technology vendors told the CFPB they must have a minimum of one year to fully test and comply with all the changes the agency wants to implement with its TRID clarifying proposed rule. Computer systems and software vendor Jack Henry & Associates said that due to the nature of these proposed changes (which will require revisions to forms, calculations and logic in the software), the industry needs an absolute minimum of 12 months for its implementation period. “Software providers such as Jack Henry & Associates work with multiple business partners and need lead time to analyze, plan, design, develop, test, document and distribute software changes to our financial institution clients prior to the implementation ...

October 31, 2016 - Inside the CFPB

CFPB Needs to Do More to Ensure the CD is Shared Among Parties

Many elements of the mortgage finance industry took up the primary concern that real estate agents have had with the CFPB’s integrated disclosure rule since it first took effect: the sharing of the closing disclosure with third parties. In their recent comments to the bureau on its TRID clarifying proposal, multiple industry players said they were glad to see the agency addressed this issue somewhat; however, more must be done. The National Association of Realtors, for instance, told the bureau that one of the unintended consequences of the integrated disclosure rule has been lenders’ reluctance to share the new required CD with real estate professionals out of fear of liability for disclosing clients’ nonpublic personal information. “Regulation P, which governs ...

October 31, 2016 - Inside the CFPB

Bureau Should Extend Diagnostic Enforcement, Industry Says

In the weeks leading up to the effective date of the CFPB’s integrated disclosure rule, the agency’s director, Richard Cordray, made clear that, from a supervisory perspective, the bureau would view enforcement of the rule as more diagnostic than punitive – an approach many industry officials believe should continue. In commenting on the CFPB’s proposed rule to clarify a number of aspects of TRID, the Mortgage Bankers Association strongly urged the current diagnostic examination approach be formally extended until the changes necessitated by a final rule have been fully implemented and it is clear that the compliance difficulties with such a complex rule have been largely resolved. “With this policy and the bureau’s and industry’s active engagement as compliance moves forward ...

October 31, 2016 - Inside the CFPB

TRID 2.0: The Comments Mortgage Reps Call on CFPB to Respond to Need for More Cures

Top mortgage industry representatives urged the CFPB to do more to facilitate the curing of loans with errors under the agency’s controversial Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. One such organization was the Housing Policy Council of the Financial Services Roundtable. In its comment letter to the CFPB, the HPC said providing more formal guidance on when and how lenders may correct or cure errors is not just a question of potential liability for lenders; it’s also important in reducing the uncertainty of customers if they experience varying interpretations by different lenders. “We recognize that it is difficult to anticipate all types of potential errors in advance,” said the HPC. “There ...

October 28, 2016 - Inside Mortgage Trends

TRID 2.0 Software Implementation a Concern

Some leading mortgage technology vendors told the Consumer Financial Protection Bureau they are concerned about the resources that will be required to implement the changes the bureau wants to make to its integrated disclosure rule known as TRID. In a comment letter to the CFPB regarding its proposed rule to clarify a number of aspects of the TRID regulation, the Mortgage Vendor Regulatory Work Group raised concerns about software implementation resources, including ...

October 28, 2016 - Inside MBS & ABS

TRID 2.0 Fails to Address Secondary Mortgage Market Concerns About Liability, PIMCO Says

The Consumer Financial Protection Bureau’s proposal to clarify a number of aspects of its TRID disclosure rule does not adequately resolve most of the non-agency secondary mortgage market’s concerns about legal liability, Pacific Investment Management Company said in a recent comment letter to the CFPB. The regulation was designed to harmonize consumer mortgage disclosures, but its unintended consequences have caused big problems in the non-agency secondary market. “The [TRID] rules have raised...

October 27, 2016 - Inside Mortgage Finance

Fannie, Freddie Endorse Aspects of TRID That Foster Support of Their Uniform Closing Dataset

Fannie Mae and Freddie Mac sent the Consumer Financial Protection Bureau a joint comment letter addressing the bureau’s TRID clarifying rulemaking that have to do with the government-sponsored enterprises’ Uniform Closing Dataset, supporting some provisions and opposing others. The UCD is the data standard the pair developed to support accurate disclosures on the closing disclosure and to facilitate the sharing of that information. “The GSEs believe...

October 27, 2016 - Inside Mortgage Finance

Appraiser Shortage Continues to Delay Loan Closings In Market With Strong Purchase-Mortgage Demand

The share of home sales that experienced a delayed closing because of appraisal-related issues remained elevated in September, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Industry participants suggest that the strong market for purchase mortgages has led to a backlog of appraisals. Appraisal issues accounted...

October 27, 2016 - Inside Mortgage Finance

Cordray Details TRID Exams

Consumer Financial Protection Bureau Director Richard Cordray said agency examiners are conducting “transaction testing” to assess compliance with new TRID disclosure rules. Looking at loan files is necessary to a diagnostic compliance assessment, he told a good-sized audience at this week’s annual convention of the Mortgage Bankers Association. The bureau chief repeated earlier assertions that TRID compliance reviews would be “diagnostic and corrective, not punitive.” Cordray said...


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