The Supreme Court of the United States will settle a multi-district circuit court conflict that will likely determine the ability of the mortgage lending industry to determine on its own what to charge borrowers at the point of origination. In deciding earlier this month to accept Freeman v. Quicken Loans Inc., the high court will confront the question of whether a plaintiff must demonstrate an unearned fee for a real estate settlement service was divided between two or more persons in order to establish that a violation of Section 8(b) of the Real Estate Settlement Procedures Act occurred.
MetLifes bank division has become the first major lender to say it plans to exit the mortgage business because of increased regulation. MetLife Bank announced it put its Home Loans unit up for sale earlier this month, a move that followed its decision to explore the sale of its depository business. Todays uncertain marketplace and regulatory environment require a tremendous amount of resources both in terms of people and capital to effectively compete in and profitably grow the forward mortgage business, the company said. Doing so would divert these resources away from MetLifes primary focus on its global insurance and employee benefits businesses.
The recently issued state regulator examination guidelines for compliance with the federal loan originator compensation regulations “continue the game of hot potato,” according to Kristie Kully, of counsel with the K&L Gates law firm. “While there are many significant questions that remain in understanding and implementing the loan originator compensation restrictions, the new state Conference of State Bank Supervisors/American Association of Residential Mortgage Regulators examination guidelines do not (and cannot really be expected to)
A number of colleagues of former Ohio Attorney General Richard Cordray made a media and lobbying blitz last week, writing Senate leadership to urge their comrade be confirmed as the director of the Consumer Financial Protection Bureau, and holding a conference call with members of the press to highlight their appeal. Writing Senate Majority Leader Harry Reid, D-NV, and Senate Minority Leader Mitch McConnell, R-KY, many members of the National Association of Attorneys General went to bat for one of their own, calling him both brilliant and balanced.
Most of the major players in mortgage securitization support some of the new disclosures floated by the Securities and Exchange Commission in its revised shelf eligibility proposed rule with a number of key changes and clarifications. Reflecting the investors perspective, the Asset Management Group of the Securities Industry and Financial Markets Association again enthusiastically supported the SECs proposal to mandate standardized disclosure at the asset level, believing that all of the asset-level data fields should be mandatory. Well functioning markets require the disclosure of as much relevant asset-level data as...
The Department of Veterans Affairs has issued guidance explaining the confusion in the last couple of weeks caused by conflicting VA regulations and legislation. The latest guidance from the VA, Circular 26-11-16, updates the method for calculating funding fees based on a provision in H.R. 2646, the Veterans Health Facilities Capital Improvement Act of 2011, which President Obama signed into law on Oct. 5. H.R. 2646, which sets funding for the construction of various VA medical facilities, also provides for higher funding fees for VA loans, contrary to funding fee changes announced by the VA on Sept. 8. Previous VA guidance notes ...
The Department of Housing and Urban Development is a step closer to leveling the playing field for FHA lenders but there is more to be done, according to a recent analysis by K&L Gates. Recent changes announced by HUD are a good start to setting right the unintended adverse effects of last years changes to FHAs lender-approval requirements, but HUD needs to do more to implement these changes fully, concludes the analysis. Authors Krista Cooley, Holly Spencer Bunting and Kathryn Baugher, all attorneys with K&L Gates, said future pronouncements from HUD should provide additional guidance on how to address the inequities between third-party originators and FHA-approved lenders with regards to ...
Mortgage servicing shops should soon expect extra-special scrutiny from the Consumer Financial Protection Bureau and perhaps even a visit by bureau examiners as part of a servicer supervision strategy announced late last week. Mortgage servicing has a huge impact on consumers and is a priority for the CFPB, said Raj Date, special advisor to the Secretary of the Treasury for the CFPB. The mortgage servicing market has been bogged down by widespread reports of pervasive and profound consumer protection problems. We are going to take a close and measured look at whether servicers are following the law. The CFPB has indicated that...
The U.S. Supreme Court recently agreed to review a dispute over closing fees in a move that may resolve a potentially entrenched circuit court conflict over the scope of the Real Estate Settlement Practices Act prohibition against unearned fees. At issue is RESPA Section 8(b), which provides that [n]o person shall give and no person shall accept any portion, split or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. As the U.S. government...
Despite the sound and fury from publicly peeved House Democrats directed at Federal Housing Finance Agency Acting Director Edward DeMarco, including calls for him to step aside, the consensus among industry insiders and those in the know on Capitol Hill is good luck finding anyone else willing or able to jumpstart the underperforming GSE refinance plan while obeying the FHFAs restrictive regulatory mandate.