Last week, the CFPB filed suit in U.S. District Court for the Southern District of California against Global Financial Support, Inc., and Armond Aria, owner and CEO, to stop what the bureau characterized as a nationwide student financial aid scam. The company, which has operated as Student Financial Resource Center and College Financial Advisory, allegedly ripped off tens of thousands of students and families by illegally charging millions of dollars in fees for sham financial services. The CFPB alleges that Aria and his businesses operate under the guise of a government- or university-affiliated operation, exploiting consumer uncertainty about how to use free federal financial aid resources provided by the Department of Education. The defendants allegedly “sent millions of deceptive letters ...

The CFPB filed a $3.3 million administrative order last week against Security National Automotive Acceptance Company, a Mason, OH-based auto lender that specializes in making loans to U.S. military personnel, accusing it of engaging in illegal debt collection practices. The order requires the company to refund or credit approximately $2.28 million to service members and other consumers who were allegedly harmed, and to pay a $1 million penalty. When the CFPB sued SNAAC in June, it alleged the company used aggressive collection tactics that took advantage of U.S. service members’ special obligations to remain current on debts. “Once service members defaulted, they became subject to repeated threats to contact their chain of command,” said the CFPB. “In many other instances, ...

The Department of Veterans Affairs and the FHA have issued guidelines concerning the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure (TRID) rule as it relates to VA- and FHA-backed mortgages. The new TRID rule covers loan applications received on or after Oct. 3, 2015. It replaced Truth-in-Lending-Act disclosures and the Department of Housing and Urban Development’s closing (HUD-1) settlement statement. The rule requires that all covered loans be closed using the new closing disclosure. The VA has announced new closing-disclosure guidelines and a new mandatory method for the stacking order of loan files selected for full-loan review. According to the VA, all files selected for full review on or after Oct. 3 may include the HUD-1 statement. The agency is aware that loans will be requested that have the HUD-1 closing document, and that it will perform the full file review with the ...

A trade association representing large financial institutions has asked the FHA to clarify its policy regarding the use of downpayment assistance programs on home purchases financed with FHA mortgage loans. The differences in the interpretation of the Department of Housing and Urban Development’s inspector general and the FHA of downpayment assistance programs (DAP), especially by state housing finance agencies, has created uncertainty among lenders, according to the Consumer Mortgage Coalition. In a letter to HUD Secretary Julian Castro, the CMC expressed concern that lenders may become unwilling to continue offering loans with assisted financing because of legal uncertainty. “This would be unfortunate for moderate-income borrowers nationwide, and it would unnecessarily limit the ability of [state housing finance agencies] to function,” the group said. SHFAs do not rely on taxpayer funding for ...

The FHA has extended the period during which servicers must identify delinquent Home Equity Conversion Mortgage loans that have become due and payable or against which an initial legal action has been taken because they are no longer curable. In April, the FHA issued guidance that granted mortgagees 180 days, or until Oct. 23, 2015, to review their portfolios and bring defaulted HECM loans into compliance with the mandatory foreclosure timelines. On Oct. 16, the agency extended the timelines through Jan. 18, 2016. The initial guidance laid out loss mitigation options that HECM servicers may provide when property charges are not paid in accordance with the terms of the HECM loan. HECM loans that are subject to a repayment plan may continue as long as they remain current, said the FHA. Otherwise, lender/servicers must follow the requirements in the April guidance. The loss mitigation options are not available ...

The Department of Veterans Affairs has issued guidance clarifying certain procedures when conveying a property to the agency in Florida. Overall, it is necessary to provide proper documentation when conveying a property to VA. This usually involves providing an owner’s title insurance policy with no exclusions, other than for taxes that have not been billed but may be accrued against the property. In 2008, Florida amended its condominium and planned unit development (PUDs) laws to allow homeowner associations (HOAs) to collect unpaid dues and assessments. The purpose of the legislative change was to make current owners jointly liable with the past owner for the full amount of past-due HOA dues and assessments, unless the HOA was named in the foreclosure complaint at the time it was filed. However, if the HOA is properly named in the foreclosure, a current owner’s limited liability could be less. In order to ...

While federal regulators issued a final rule setting risk-retention requirements for a variety of MBS and ABS in December 2014, uncertainty regarding implementation persists. Industry participants are seeking guidance from regulators on a variety of issues, including the application of risk retention to asset classes that weren’t prevalent when the Dodd-Frank Act was drafted. “It’s absolutely astonishing how much becomes unclear when you actually sit down to build a risk-retention solution,” Rick Jones, chair of finance and real estate groups at the Dechert law firm, said in a recent commentary. He noted...

Earlier this month, the House of Representatives voted 303-121 in favor of H.R. 3192, The Homebuyers Assistance Act. The legislation would provide the mortgage industry with a regulatory and legal safe harbor until Feb. 1, 2016, for mortgages originated in good faith under the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. The rule, designed to streamline the mortgage disclosures under the two laws, took effect Oct. 3, 2015, after nearly two years of notice from the CFPB. “The CFPB and House Republicans agree that a transitional period for TRID compliance which enables lenders to test their systems and ensures there is no large-scale disruption to mortgage lending is necessary,” said Rep. ...

ComplianceEase, an automated compliance solutions provider based in Burlingame, CA, has come out with an insurance-backed warranty program for loans that have been audited by its ComplianceAnalyzer solution. The program, called AssureCert, provides warranty coverage for compliance defects, including ones related to the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule (TRID) and the ability-to-repay/qualified mortgage regulation, as well as federal and state consumer lending and high-cost laws and regulations. “The new QM and TRID rules have exposed lenders and investors to civil lawsuits, as well as fines and repurchase risk,” said John Vong, president of ComplianceEase. “Our insurance-backed AssureCert warranty will offer our clients – both large and small –additional protection and peace of mind.” The ...

Bank of America Pulls the Plug on All Marketing Services Agreements. Bank of America, the third-largest residential retail lender in the U.S., has pulled the plug on all marketing services agreements it has with realty firms, sibling publication IMFnews reported last week. The bank confirmed the move to the newsletter, noting that it will discontinue all “space rental agreement programs due to recent regulatory developments.” It added: “We expect our MSA agreements will conclude by Nov. 1, 2015, and we will terminate our lease agreements for space in accordance with their terms. While the decision to wind down our MSA and SRA programs was difficult, the end of these programs allows us to pursue different ways we might help builders ...