In Marr v. Bank of America, N.A., the U.S. Court of Appeals for the Seventh Circuit has affirmed that borrower testimony alone can overcome the Truth in Lending Acts rebuttable presumption that a borrower has received two notices of his right to rescind a refinance transaction, despite a written acknowledgement by the borrower to the contrary. In this case, the borrower argued that he wasnt given two right-to-rescind notices as required under TILA, even though he had signed a document indicating he had. He said he had filed away and left undisturbed the documents he received when ...
California. In Balderas v. Countrywide Bank, N.A., the U.S. Court of Appeals for the Ninth Circuit recently ruled that the Truth In Lending Acts delivery obligation requires borrowers be permitted to keep written copies of the right-to-rescind notice. The court noted that to deliver the notice as per TILA requires a permanent physical transfer from one party to another, as opposed to momentary delivery. Illinois. Earlier this month, the Department of Financial and Professional Regulations published amendments to the states mortgage originator licensing requirements. One change ...
Consumer Financial Protection Bureau. Comments Wanted on Mortgage-Related Rules. The Consumer Financial Protection Bureau is asking for public comment on currently approved information collections associated with certain recently published interim final rules having to do with mortgage lending. One such rule has to do with the Secure and Fair Enforcement for Mortgage Licensing Act (Regulation G) 12 CFR Part 1007.The information collection will improve the flow of information to and between regulators; provide accountability and ...
The Consumer Financial Protection Bureau wasted no time in moving forward aggressively with its new director, last week releasing its mortgage origination examination procedures that will be used to scrutinize mortgage lenders and brokers in both the bank and nonbank sector of the industry. The procedures are the clearest indication yet that nonbanks are generally going to be held to the same standards, expectations and requirements as their more traditional banking counterparts. The new procedures outline the CFPBs supervisory approach to making sure mortgage originators comply with federal...
Demands to repurchase poorly performing mortgages have resulted in a spike in the number of mortgage fraud-related Suspicious Activity Reports (SARs) filed by banks in 2011, according to the Department of the Treasurys Financial Crimes Enforcement Network. In its 2011 annual report, FinCEN said increased buyback demands by investors have forced large mortgage lenders to conduct additional reviews of loans they originated, resulting in higher SARs filings last year. A review of SAR filings in the first quarter of 2011 found that the number of mortgage fraud reports rose to 25,485, up 31 percent from...
When it comes to contemplating the wide range of mortgage lending compliance challenges in 2012, it might be useful to borrow from former Defense Secretary Donald Rumsfeld: there are knowns, things we know and things we know we dont know, and there are unknowns, things we dont know that we dont know.In terms of some of the knowns, the mortgage servicing exam procedures released back in October by the Consumer Financial Protection Bureau provide a roadmap for some of the emphasis areas mortgage lenders can expect from their new regulator, according to Christopher Willis, partner in the Atlanta office of Ballard Spahr. I think fair lending is going to be a very big emphasis area for them, he said. The recent settlement between the Department of Justice and Bank of America sets the stage for that to continue to be a very public, very big issue. And that was an origination case; that wasnt even a servicing case.And if you read the mortgage servicing exam procedures, the CFPB is saying they want to apply fair lending analysis to things like foreclosures and loan modifications, he added. I think thats going to be a major source of activity.
Bank of America and the Department of Justice recently agreed to the largest residential fair lending settlement in history for $335 million. The DOJ claimed that Countrywide Financial allowed pricing discrimination against minority borrowers as well as unchecked steering to subprime loans. The settlement, which is subject to court approval, will mark the first time that the DOJ has obtained relief for borrowers who were steered into loans based on race or national origin. The DOJ said the practice systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans. ...
Loan modifications with principal reduction have significantly increased in the past year, with servicers seeing improved performance compared with other types of mods. The mods remain concentrated on securitized non-agency mortgages as well as portfolio loans, but performance varies considerably. After falling to a 2.7 percent share in the fourth quarter of 2010, principal reduction mods have accounted for a growing share of bank and thrift mod activity, according to the Office of the Comptroller of the Currency. Principal reduction was used in 7.8 percent of the mods completed by nine major bank and thrift servicers in the third quarter of 2011. ...
The one category of distressed loan that the federal government has the most control over mortgages insured by the FHA and VA continues to show the worst success rates for loan modifications. After 12 months of post-modification seasoning, over half (51 percent) of government-insured loans were 60 days or more past due, according to a report issued this week by the Office of the Comptroller of the Currency. That compared to an overall 60+ re-default rate of 39 percent. Fannie Mae and Freddie Mac mortgages, along with loans held in the servicers portfolio, showed the best...
Industry trade groups, as well as Fannie Mae and Freddie Macs regulator, are questioning the wisdom of Congress as lawmakers in both chambers have bills pending to hike the fees charged to guarantee GSE mortgages as a way to help offset the cost of extending the payroll tax cut through 2012.Both House and Senate versions of tax cut extension bills would add an additional 10 basis points to the guarantee fees charged by Fannie and Freddie through 2021. The increase would offset about $35.7 billion in costs, including $1.3 billion in the first year, according to the Congressional Budget Office.As Inside the GSEs went to press, the prospect of any tax cut extension was in doubt after the House rejected the bill calling for a two-month extension. Instead, House Republicans demanded immediate talks with the Senate on a year-long plan but the Senate ruled out further negotiations until the House passes the stop-gap measure.