Acting Comptroller of the Currency John Walsh reassured participants at an interagency conference on the Community Reinvestment Act last week that the enforcement orders federal bank regulators issued last year and the state attorneys general national mortgage settlement will work well together. “I’ve said from the beginning that it is not only possible, but absolutely necessary, that our separate actions be able to work well together. And I think we’ve succeeded in that,” Walsh said. “The steps we have each required servicers to take to fix the problems in servicing and foreclosure processing ...

Last week, the full House Financial Services Committee passed several pieces of legislation, including H.R. 2446, the RESPA Home Warranty Clarification Act of 2011, introduced by Rep. Judy Biggert, R-IL, which advanced with one amendment. The legislation amends the Real Estate Settlement Procedures Act of 1974 to state that no prohibited kickback or unearned fee incidental to a real estate settlement service involving a federally related mortgage loan shall be deemed to include, or be deemed to have included, homeowner warranties or similar residential service contracts for ...

Iowa Attorney General Tom Miller, the lead official behind the recent $25 billion mortgage servicing settlement, told industry representatives last week that, unlike past agreements, the AGs are going to be sticklers for full and proper implementation this time around. Implementation “is a very, very important aspect to our effort currently and going forward,” Miller said to participants in a webinar sponsored by Inside Mortgage Finance, an affiliated publication. “We put just an awful lot into this investigation and negotiations, and we don’t want it to ...

The Consumer Financial Protection Bureau’s first semi-annual report to Congress suggests the mortgage lending industry has a lot of work to do if it’s going to satisfy disgruntled homeowners. The report included some updates on the CFPB’s consumer complaint system, including the finding that mortgage-related complaints represented the second largest category of consumer complaints, after credit cards. Between July 21 and Dec. 31, 2011, the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints...

In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ...

The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three “non-public” investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ...

Consumer Financial Protection Bureau Director Richard Cordray last week indicated to members of Congress that the bureau is still working to clarify all the nuanced meanings of the term “abusive” as it relates to prohibited mortgage lending activities per the Dodd-Frank Wall Street Reform and Consumer Protection Act. Responding to a parsing of the definition of the word under questioning before the House Financial Services Committee, Cordray acknowledged some aspects of the Dodd-Frank Act’s abusive standard are “situational and somewhat subjective in nature,” such as ...

FHA loan production declined by 11.0 percent in February from the previous month but increased 1.2 percent from a year ago, according to Inside FHA Lending’s analysis of FHA data. Approved lenders reported $15.2 billion in new FHA-insured loans in February, down from $17.1 billion the previous month but up from $15.0 billion in the same month last year. In-house originations accounted for the lion’s share of FHA originations, 78.2 percent, for the month, while purchase mortgages made up the bulk of FHA endorsements at 55.1 percent. An estimated 97.1 percent were ... [1 Chart]

The Department of Housing and Urban Development has reminded mortgagees and servicers that it is illegal to use mortgage escrow funds for purposes other than those stated in federal regulation. In a recent FHA notice, HUD warned approved lenders and servicers against applying escrow funds to reduce the outstanding balance in the payoff amount of an existing loan. The department said it has not authorized the use of borrower money in escrow accounts for reasons other than making legitimate payments. Escrow funds are borrowers’ funds collected at ...

A Texas-based mortgage lender that recently lost its approval to originate and underwrite FHA loans sued in state court to compel the Department of Housing and Urban Development to withdraw an announcement of the enforcement action. AmericanHomeKey filed the complaint in Dallas County Court to force the withdrawal of a March 23 HUD press release announcing the immediate and permanent revocation of the lender’s FHA authority to originate, underwrite and close new mortgages with FHA insurance. The lender said a premature announcement would ruin its relationship with investors and result in massive losses. The HUD Mortgagee Review Board announced ...