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 loan’s 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 court’s 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 company’s inventory of real estate...

Don’t 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.

An ad hoc coalition of mortgage lender trade group representatives rattled off a host of concerns it has with the draft proposals from the Consumer Financial Protection Bureau for an integrated mortgage disclosure under the Real Estate Settlement Procedures Act and the Truth in Lending Act. The short list of concerns includes the need for careful synchronization with other rulemaking efforts, especially those involving the “qualified mortgage” and “qualified residential mortgage” designations; the negative and unfair results of lowering cost tolerances; the unintended consequences of expanding...

It’s now clear that states may provide a transitional license to an individual with a valid license from another state under the Secure and Fair Enforcement for Mortgage Licensing Act and Regulation H. However, they cannot provide a transitional license for a registered loan originator who leaves a federally regulated financial institution to act as a loan originator while pursuing a state license. The clarification came in the form of Consumer Financial Protection Bureau Bulletin 2012-05, issued a week and a half ago, in response to some inquiries...

The forthcoming combined Truth in Lending Act and Good Faith Estimate disclosure form and related rule pending at the Consumer Financial Protection Bureau is at the top of the list of greatest compliance concerns of mortgage lenders, according to the fourth annual compliance survey by QuestSoft, a provider of compliance software and services to the mortgage industry. Of the 426 lenders that were surveyed on their level of anxiety for regulatory changes, a whopping 81 percent identified this CFPB project as at least a medium (33 percent) or a high (48 percent) concern...

Federal Reserve Board.Federal Deposit Insurance Corp.Office of the Comptroller of the Currency.Consumer Financial Protection Bureau.National Mortgage Servicing Standards Continue. The interagency group of federal banking regulators continues to work to develop prudential standards for mortgage servicing activities in parallel with the Consumer Financial Protection Bureau’s initiative, which focuses on certain aspects of mortgage servicing...

Comptroller of the Currency Thomas Curry urged elected officials, businesses and grassroots leaders to encourage borrowers to ask for an independent review of their foreclosure files to determine whether they have been damaged financially by improper servicing practices. In remarks to the Greenlining Institute in Los Angeles last week, Curry called upon conference participants to spread the word to borrowers about the independent foreclosure review, a stipulation in the consent orders that 14 major mortgage servicers agreed to a year ago in a deal with federal banking regulators to settle allegations of deficient...