The Federal Trade Commission announced last month that it will not enforce most provisions of its Mortgage Assistance Relief Services rule against real estate brokers and their agents who help struggling homeowners obtain short sales from their lenders or servicers. The stay applies only to real estate professionals who are licensed and in good standing under state licensing requirements; comply with state laws governing the practices of real estate professionals; and assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes. ...

The Federal Trade Commission issued a final rule to strengthen consumer protections by banning deceptive claims about consumer mortgages in advertising or other types of commercial communications. The new rule lists 19 examples of prohibited deceptive claims, including misrepresentations about the existence, nature, or amount of fees or costs to the consumer associated with the mortgage; the terms, amounts, payments, or other requirements relating to taxes or insurance associated with the mortgage; and the variability of interest, payments, or other terms of the mortgage. ...

The new Consumer Financial Protection Bureau is making substantial progress on its initiative to meld the mortgage disclosure forms under the Truth in Lending Act and the Real Estate Settlement Procedures Act into one, more simplified disclosure. Still, a number of questions are being raised in the process, not the least of which has to do with what kind of regulation will eventually accompany the forms. “The first issue is that these forms just don’t reflect the regulatory and statutory requirements in many ways,” said Steve Kaplan, a partner with law firm K&L Gates LLP in its Washington, DC, office during a webinar last week sponsored by Inside Mortgage Finance Publications. “So someone who is a practitioner and who’s been dealing with these issues for years will say, ‘What is this form? This is great and dandy but do I get a safe harbor? Do I still violate the statute by providing this form?’” ...

A California mortgage lender that recently reached a settlement agreement with the Department of Housing and Urban Development over branch issues could land before HUD’s Mortgagee Review Board for branch-related loan quality issues. HUD’s Office of the Inspector General said an audit of Prospect Mortgage’s branches uncovered high default rates due to numerous violations of HUD underwriting and quality control requirements. The OIG recommended requiring Prospect to reimburse HUD $344,326 for ...

Some federally supervised depository institutions with FHA businesses are in danger of missing the July 29 deadline for registering with the Nationwide Mortgage Licensing System and Registry and could be sanctioned. The delay in registration is apparently due to confusion and uncertainty as to whether certain employees meet the definition of a “mortgage loan originator” (MLO) and should be registered as required by the Secure and Fair Enforcement for Mortgage Licensing Act, said compliance experts. The mortgage-related activities of such employees do not clearly meet the MLO definition and they include ...

As FHA tightens its underwriting further to give more room for private capital in the mortgage market, the federal single-family mortgage insurance program may no longer provide mortgage alternatives for as many “non-qualified residential mortgage” borrowers as it would have in the past, according to a new report issued by the Government Accountability Office. Analyzing the impact of the Dodd-Frank Act on homeowners and the mortgage market, the GAO report concludes that potential changes in the FHA’s role could influence ...

Most state-licensed mortgage companies in the Nationwide Mortgage Licensing System and Registry are mortgage brokers, of which a significant portion does FHA loan correspondent business, according to a recent report issued by the Conference of State Bank Supervisors. As of the end of the first quarter, 14,980 companies possessed 28,415 licenses – an average of two state licenses per company, according to the report, “A Nationwide View on State-Licensed Mortgage Entities, Quarter I, 2011.” The licensee/registrant reports ...

Analysts and legislative history suggest that Congress could still act to keep the “temporary” high-cost conforming loan limit at elevated levels. Advocates of the non-agency market have long-anticipated the drop in the loan limit, currently set to occur in October without further action from Congress. An extension of the $729,750 loan limit this year seems unlikely with the Obama administration supporting a decline to at least $625,500. Many Republicans also support a decrease in the role ...

Consumers could be setting themselves up for problems in the credit market if they are getting credit information about themselves that differs from what lenders are looking at, according to a new report released by the Consumer Financial Protection Bureau. In a report to Congress, the agency said it plans to study the variations between credit scores sold to lenders and those sold to consumers to shed light on potential harm to the consumer. “The most substantial harm would likely result if, after purchasing a score, a consumer has a different impression of his or her ...

The Consumer Financial Protection Bureau may have taken the field before its franchise quarterback has suited up, but that’s unlikely to slow agency examiners in making their appointed supervisory rounds. They’ve already introduced themselves to their largest bank charges and are fine-tuning their internal examination guidelines so that when they get the final authority to supervise non-banks, they will come calling without delay, according to industry presenters at the latest webinar sponsored by In-side Mortgage Finance. When the CFPB officially ...