RESPA

Browse articles from all of our Newsletters related to RESPA.

January 16, 2017 - Inside the CFPB

PHH Corp. May Have an Ally In Case Against CFPB

While many in the mortgage industry wait for the District of Columbia Circuit Court of Appeals to decide whether to rehear the arguments of the CFPB in its wrangling with PHH, the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew, et al. have stepped back onto the legal stage at the district court level. Specifically, “Plaintiffs respectfully move [the U.S. District Court for the District of Columbia] to hold a status conference at its earliest convenience to determine how this case ... can be most efficiently adjudicated in light of the CFPB’s petition for en banc review of the panel decision in PHH Corp. v. CFPB,” State National Bank and its parties asked the appeals ...


January 12, 2017 - Inside Mortgage Finance

With PHH Case Pending, Industry Officials Still Believe CFPB Should Give More RESPA Guidance

Mortgage compliance experts say there’s still a strong need for the Consumer Financial Protection Bureau to provide more guidance about acceptable business relations under Section 8 of the Real Estate Settlement Procedures Act. One of the issues that came to the fore in the bureau’s enforcement action against PHH Mortgage was lenders’ relationships under marketing services agreements. Even though banks these days may be using MSAs to a lesser extent than nonbanks, there is still a need for the CFPB to more clearly delineate do’s and don’ts. “On the lender side of the mortgage industry, there is...


January 5, 2017 - Inside Mortgage Finance

As Legal Briefs Fly, Separation-of-Powers Question Becomes Pivotal Issue in PHH’s Dispute With CFPB

PHH Corp., the Department of Justice and the Consumer Financial Protection Bureau have, in recent weeks, gone back and forth with the filing of briefs on multiple angles associated with the legal dispute the lender has had with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. However, it looks like the separation of powers under the U.S. Constitution will play a more decisive role in the outcome than will issues related to RESPA, according to some top legal observers. PHH and the DOJ both submitted responses to the District of Columbia Circuit Court of Appeals on Dec. 22, the deadline set by the court. The government is seeking an en banc review by the full appeals court of a ruling by a three-judge panel. In its brief, the mortgage lender said...


January 2, 2017 - Inside the CFPB

New Prez Has the Power to Can Cordray Now, Professor Claims

Numerous experts, commenters and observers are under the assumption that President-elect Trump will have to let the courts reach a definitive legal decision on the PHH Corp. v. CFPB litigation before deciding whether to remove CFPB Director Richard Cordray without cause. However, that’s not the case, according to Aditya Bamzai, associate professor of law at the University of Virginia School of Law. In a recent online blog post, Bamzai said the (sometimes unstated) premise in various articles and reports is that the CFPB’s pending challenge to the panel decision somehow prevents any attempt to oust Cordray. “Such a premise appears to rest on two mistaken assumptions: that the president cannot exercise his removal authority absent an Article III judgment authorizing ...


January 2, 2017 - Inside the CFPB

Key Constitutional Question Warrants Rehearing, DOJ Says

The important constitutional issue of separation of powers, and the perhaps somewhat unorthodox manner in which the three-judge panel of the District of Columbia Circuit Court of Appeals concluded that the CFPB’s leadership structure is unconstitutional, justify the court granting the bureau’s request for a rehearing en banc in its dispute with PHH Corp., the U.S. Justice Department told the court. “The conferral of broad policymaking and enforcement authority on a single person below the president, whom the president may not remove except for cause ... raises a significant constitutional question that the Supreme Court has not yet squarely confronted,” the DOJ said. To date, the nation’s highest court has sanctioned a limitation on the power to remove principal officers ...


January 2, 2017 - Inside the CFPB

PHH Says Panel Got it Right, No Need to Rehear En Banc

The long-running legal confrontation between PHH Corp. and the CFPB took another turn right before the holidays, with the nation’s eighth largest lender telling the District of Columbia Circuit Court of Appeals that its three-judge panel got it right in October when it ruled the CFPB’s leadership structure is unconstitutional. “The panel grounded its decision in existing Supreme Court precedent and other settled authority,” the company said. “It remedied a violation of the separation of powers by allowing the agency to continue to operate subject to basic constitutional constraints, without addressing the decision’s effect on past actions.” Further, “the panel interpreted the Real Estate Settlement Procedures Act according to its plain language and consistently with every other circuit to consider ...


December 15, 2016 - Inside Mortgage Finance

CFPB Urged to Issue Guidance, Step Up Oversight As Lenders Increase Use of Private-Label Servicing

The growing popularity of private-label servicing and the way it’s offered to lenders are raising regulatory questions, underscoring the need for guidance and supervision, according to legal experts. With the most comprehensive offerings of private-label servicing, the borrower never knows the subservicer exists, and that’s the point of the arrangement, according to Craig Nazzaro, of counsel at the Atlanta-based law firm Baker Donelson. Nazzaro attributes...


December 12, 2016 - Inside the CFPB

Industry’s TRID Improvements Bring Loan Defects Down in Second Qtr.

TRID-related mortgage defects dropped slightly during the second quarter of 2016, the first decline since the rule kicked in Oct. 3, 2015, ARMCO, a risk management technology vendor, said in a new quality control analysis. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however, corrective action planning taken by the lending community has produced positive results that can now be visualized in the 2Q data,” said Phil McCall, chief operating officer at the company. According to the report, the overall critical defect rate dropped to 1.63 percent for the period ending June 30, 2016, the most recent period for which relevant data were available, thus ending the upward swing that stretched back to 3Q15. The ...


December 12, 2016 - Inside the CFPB

TRID 2.0: The Comments: Urgent TRID Issues Still Must be Addressed, Trade Group Says

Although the CFPB said it was not going to revisit the TRID rule in its entirety when it issued its clarifying rulemaking earlier this year, a number of industry players were still disappointed that more problems were not dealt with. At the top of a list provided by the Community Mortgage Lenders of America of issues that still need to be addressed is loans submitted by mortgage brokers. “An issue that continues to vex the industry is how to treat loans from mortgage brokers that are submitted following rejection by another lender,” the trade group said. “As is typically the case, the submission of a loan to a wholesale lender by a mortgage broker, following rejection of the same loan ...


December 12, 2016 - Inside the CFPB

TRID 2.0: The Comments: Clarifying Proposal Doesn’t Address Secondary Market Anxieties

The TRID 2.0 clarifying rulemaking proposal fails to alleviate most of the concerns that investors in the secondary mortgage market have about their potential legal liability, according to Pacific Investment Management Company. In its recent comment letter to the CFPB, PIMCO noted, “In most cases, the errors that relate to the [TRID] disclosures are subtle and technical in nature and do not result in corresponding consumer harm or confusion. Nevertheless, because the … rules implement provisions of the Truth in Lending Act that may carry actual or statutory damages and assignee liability to purchasers, there are serious concerns among secondary purchasers due to the rules’ expansion of liabilities in mortgage origination and investing.” Moreover, asset managers and other loan purchasers ...


December 12, 2016 - Inside the CFPB

CFPB Issues New Exam Procedures for Reverse Mortgage Servicing

The CFPB recently ditched the antiquated method for assessing compliance with reverse mortgage servicing rules in favor of new examination procedures. Depending on the scope, each reverse mortgage servicing exam will include one or more of eight modules. Subject areas represented by separate modules include servicing transfers, loan ownership transfers and escrow disclosures; account maintenance, payments and disclosures; consumer inquiries, complaints and error resolution procedures; and maintenance of escrow accounts or set-asides and insurance products. Other module segments address information sharing and privacy; events of default and death of borrower; foreclosures; and examiner conclusions and wrap-up. The revised guidance reminds CFPB personnel of their examination objectives, one of which is to identify acts or practices that materially increase the risk ...


December 12, 2016 - Inside the CFPB

Democrat Lawmakers, Advocates File Briefs in Support of CFPB

Current and former Democrat members of Congress recently submitted a joint brief to the D.C. Circuit Court of Appeals in support of an en banc rehearing in the PHH Corp. v. CFPB case, including Dodd-Frank drafters and supporters, such as one of the bill’s namesakes, former Rep. Barney Frank, along with Sen. Elizabeth Warren, both from Massachusetts. The lawmakers argued that this case presents “a question of exceptional importance” and requires an en banc rehearing because the three-judge panel’s decision restructures the CFPB in a way that conflicts with Congress’s legislative plan. “By severing the for-cause removal provision, the panel decision fundamentally altered the CFPB’s structure in a way that is at odds with Congress’s design and will undermine the ...


December 12, 2016 - Inside the CFPB

PHH, Solicitor General to Respond to CFPB Appeals Court Directive

PHH Corp. has until Dec. 22, 2016, to respond to an order by the District of Columbia Circuit Court of Appeals related to its battle with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. The appeals court had directed the lender to reply to the bureau’s petition for an en banc rehearing of the recent ruling by a three-judge panel of the court. Back in October, the panel determined that two aspects of the CFPB’s structure – the dismissal of the director of the agency only for cause and the single directorship as opposed to a multi-member bipartisan commission – were unconstitutional. Additionally, the judges found in favor of the company’s arguments, among others, around the correct interpretations ...


December 9, 2016 - Inside Mortgage Trends

TRID Defects Dip, Improvements Take Hold

Defects in mortgage loans produced under the Consumer Financial Protection Bureau’s integrated disclosure rule fell modestly in the second quarter of 2016, after peaking in the first three months of the year. This is the first such drop since the TRID rule took effect in October 2015, according to a new quality control analysis from ARMCO, a risk management technology vendor. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however ...


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...


Poll

HUD has announced a 25 basis point cut in FHA premiums, which is slated to take effect in late January. Is your lending shop for or against a cut in FHA premiums?

For. It should help lending volumes.
Against. The private MI sector should take on this risk, not the government.
Too early to say.
I believe the new White House may scuttle the idea so it doesn’t matter.

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