The Consumer Financial Protection Bureau wants to hear from the industry about the costs companies anticipate incurring in order to comply with a variety of rules and requirements pending at the agency. In proposing new rules for providers in the mortgage markets, the CFPB said it will consider the potential implementation and ongoing compliance activities and associated costs of the proposed rules. “Accordingly, the bureau seeks to collect qualitative information on the potential costs of complying with potential new regulations and other effects the rules may...

Complying with all the requirements of the Real Estate Settlement Procedures Act under the new Consumer Financial Protection Bureau is going to be a much different ballgame than had been the case when the Department of Housing and Urban Development was calling the shots, a leading industry attorney indicated recently. “The bottom line on RESPA enforcement [at the Consumer Financial Protection Bureau] is that there are many enforcement powers and authorities at the bureau’s disposal,” Holly Spencer Bunting, a partner in the Washington, DC, office of K&L Gates LLP, told participants...

The U.S. Court of Appeals for the 11th Circuit recently reversed and remanded a lower court’s rejection of a Fair Debt Collections Practices Act claim, determining in Reese v. Ellis, Painter, Rattertree & Adams, LLP that the contents of a “dunning” notice from the lender’s foreclosing law firm amount to an effort to collect a debt under the act. In this case, the borrowers, Izell and Raven Reese of Roswell, GA, purchased a piece of property in 2004 with the help of a $650,000 loan from Provident Funding Associates, LP. To get that loan, the Reeses signed a promissory note and...

With his home state of Nevada leading the nation in foreclosures, Republican Sen. Dean Heller has introduced legislation that seeks to simplify and speed up the short-sale process via an amendment to the Truth in Lending Act. Heller has recently introduced SB 3177, the Stopping Ongoing Lender Delays Act (or SOLD Act). His legislation would require each servicer of a home mortgage to respond in writing within 30 calendar days to a mortgagor of a residential mortgage loan who has requested in writing a short sale of the dwelling or residential real property that is subject to the mortgage...

The Federal Deposit Insurance Corp. late last week filed separate lawsuits against a number of companies that issued or underwrote non-agency MBS purchased by Citizens National Bank and Strategic Capital Bank, two Illinois banks that failed in May 2009. The two banks purchased some $140.5 million of non-agency MBS issued by Bear Stearns, Citicorp, Credit Suisse and Merrill Lynch. The lawsuits also name JPMorgan Securities, Citigroup, Credit Suisse, Deutsche Bank, Ally Securities, HSBC Securities, RBS Securities and UBS Securities as underwriters of these transactions. The FDIC is seeking $77.0...

Uncertainty lingers in the wake of last week’s announced $8.7 billion settlement between non-agency MBS investors and Ally Financial’s subsidiary Residential Capital as the details and implications of the deal resonate throughout the market. The agreement with 17 residential MBS investors was struck in a photo finish shortly before ResCap’s bankruptcy filing, and it represents the second major settlement between non-agency MBS investors and the sponsors of non-agency securitizations. Bank of America’s controversial $8.5 billion proposed settlement with investors that purchased Countrywide non-agency MBS...

Wall Street is trying to cope with the considerable ambiguity that officials see in emerging rules on conflicts of interest in securitization and a potentially troublesome federal program that changes how issuers arrange credit ratings for their deals. The conflict-of-interest rule was included in the Dodd-Frank Act as an attempt to prevent participants in the securitization process from structuring deals that allow them to profit at the expense of investors. “When this rule first came out, it was not bad; you could probably live with this in most cases,” said Kenneth Morrison, a...

The Residential Mortgage-Backed Securities Working Group announced a new website this week for whistleblowers to submit tips regarding potential fraud involving non-agency mortgage-backed securities. “There are scores of people who worked in the residential MBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy,” said Acting Associate Attorney General Tony West. “We want to hear from them ... [Includes seven briefs]

The Department of Housing and Urban Development has expressed concern over the “lack of alignment” between FHA’s credit underwriting standards and credit overlays – a probable explanation for the apparent increase in FHA lending to non-traditional FHA borrowers. Responding to an Inside FHA Lending inquiry, FHA Deputy Assistant Secretary Charles Coulter said HUD will look at lenders’ compare ratio as a potential driver for overlays and will work to improve clarity in FHA manual underwriting. In recent remarks at the Mortgage Bankers Association’s National Secondary Market Conference in New York, Coulter said ...

Real estate industry groups are urging the FHA to align a forthcoming proposed rule for private transfer fees with a final rule recently adopted by the Federal Housing Finance Agency. In a joint letter to Acting FHA Commissioner Carol Galante, the National Association of Realtors and the Institute of Real Estate Management expressed support for the FHFA rule on transfer-fee covenants and asked that a mortgagee’s compliance with the FHFA rule be deemed as compliance with the FHA’s own rule regarding such covenants. The two groups urged the FHA to ...