Last week, the Federal Reserve Board put out action plans for Citigroup and HSBC Finance Corp. to correct deficiencies in their residential mortgage loan servicing and foreclosure processing. These enforcement actions require the mortgage servicing subsidiaries to provide appropriate remediation to borrowers who suffered financial injury as a result of errors by the servicers. The Fed also released the engagement letter between Ally Financial Inc. and its independent consultant to review foreclosures that were in the firms pipeline in 2009 and 2010...
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 bureaus disposal, Holly Spencer Bunting, a partner in the Washington, DC, office of K&L Gates LLP, told participants...
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...
One of the trickiest challenges presented to the Consumer Financial Protection Bureau as part of its project to harmonize the mortgage disclosures consumers receive will be the settlement disclosure, a top official at the CFPB indicated recently. The settlement disclosure is where were in a bit of a difficult situation, because Congress, al-though they directed us to combine the Truth in Lending Act and Real Estate Settlement Procedures Act disclosures, did not amend the underlying statutes, said Benjamin Olson, managing counsel in the office of regulations at the CFPB, during a webinar sponsored last...
Even as the Federal Housing Finance Agency deliberates writedowns of Fannie Mae and Freddie Mac mortgages, the agency has agreed to allow the government-sponsored enterprises to participate in a California program that applies principal reduction in modifying distressed loans. The FHFA has confirmed Fannie and Freddies participation in the California Housing Finance Agencys Keep Your Home California Program, a $2 billion foreclosure prevention effort established under the U.S. Treasurys Hardest Hit Fund. Earlier this month, state officials announced they are dropping the requirement from the...
Three mortgage lending industry groups have challenged the position of the Consumer Financial Protection Bureau in a key Truth in Lending Act case by asserting that borrowers must file a lawsuit within three years of a mortgage loans signing in order to exercise their right of rescission. As far as the industry is concerned, the crux of the dispute in Rosenfield v. HSBC Bank, No. 10-1442, currently before the 10th District Court of Appeals, is whether borrowers who notify lenders of their intent to rescind must also sue their lenders within three years. TILA gives certain...
In Gilbert v. Residential Funding LLC, the U.S. Court of Appeals for the 4th Circuit became the first federal appellate court to rule that a borrower only needs to send notice of rescission within the three-year period to exercise a valid right to rescind. In this case, the borrowers are appealing a district courts dismissal of their claim that Deutsche Bank Trust Company Americas, as trustee for Residential Accredit Loans, Inc., Residential Funding LLC and GMAC Mortgage LLC, violated various consumer protection laws in connection with a refinance mortgage the borrowers secured...
Mortgage bankers and brokers are making a fresh push to support H.R. 4323, the Consumer Mortgage Choice Act, legislation that would change the way points and fees are calculated under the Qualified Mortgage definition in the Dodd-Frank Act. Trade groups representing these segments of the industry have made new appeals to their members recently to reach out to their respective lawmakers and garner their support for the legislation. The Consumer Mortgage Choice Act would spell out that affiliate title fees, certain loan originator compensation, and escrow payments are not included...
Fannie Mae posted a profit large enough to cover its government dividend payment for the first quarter of 2012, while Freddie Mac came up a little short and had to ask the government for an additional $19 million to remain solvent. Fannie reported $2.7 billion in net income during the first quarter, compared to a net loss of $2.4 billion in the fourth quarter of 2011 and a net loss of $6.5 billion in the first quarter of 2011. The company credited its better results to lower credit-related expenses, resulting from a less significant decline in home prices, a decline in the companys inventory of real estate...
Dont expect the long-awaited White House plan to wind down Fannie Mae and Freddie Mac anytime soon, an Obama administration official told lawmakers last week. Housing and Urban Development Secretary Shaun Donovan told members of the Senate Banking, Housing and Urban Affairs Committee that the administration has made significant strides toward bringing private capital back into the housing market without help from Congress. However, the GSE overhaul promised for the first of the year needs more work, he said.