The CFPB has told Zillow, the online real estate database firm, to settle with the agency over alleged violations of the Real Estate Settlement Procedures Act or face an enforcement action, the company revealed last week in its 10-Q filing with the Securities and Exchange Commission. “Based on correspondence from the CFPB in August 2017, we understand that it has concluded its investigation,” the firm said in its SEC disclosure. “The CFPB has invited us to discuss a possible settlement and indicated that it intends to pursue further action if those discussions do not result in a settlement.”At issue are certain co-marketing activities, which Zillow defended. “We continue to believe that our acts and practices are lawful and that ...

Prior to lawmakers heading out of the nation’s capital for their annual summer recess, Republicans on the House Financial Services Committee released a second staff report that could lay the groundwork for contempt-of-Congress charges to be brought against CFPB Director Richard Cordray. The GOP legal analysis asserts that Cordray has failed to satisfy subpoenas the committee issued for records related to the bureau’s controversial rule banning mandatory arbitration in most consumer financial services contracts. The rule does not address the use of such provisions in residential mortgages, which were banned by Congress in 2004. “Staff believes there is ample basis to proceed against Director Cordray for contempt of Congress due to his default” on his obligations under the congressional subpoenas ...

Will He? Won’t He? Run for Governor of Ohio, That Is. The top consumer regulator in the land, Richard Cordray, head of the CFPB, has until 4 p.m. Feb. 7, 2018, to file the necessary paperwork to run in the Ohio gubernatorial primary in May of next year. Current Republican Gov. John Kasich is term-limited and will have to vacate the governor’s mansion at the end of 2018.... CFPB Fines JPMorgan Chase $4.6 Million for Alleged Failures Related to Checking Account Screening Information. The CFPB recently brought an enforcement action against JPMorgan Chase Bank, alleging that it violated the Fair Credit Reporting Act by not having adequate policies in place regarding the accuracy of information it provided to nationwide specialty consumer reporting companies about individuals’ checking account behavior....

  PHH Corp. announced a $75 million settlement with the Department of Justice and the Federal Housing Finance Agency to settle unspecified allegations tied to the underwriting of legacy loans. However, whether Fannie Mae and Freddie Mac loans can be targeted for False Claims Act purposes is still debatable. The DOJ portion of the settlement covers FHA and VA mortgages originated from January 2006 until the end of 2011. …

The surprise tactic by Wells Fargo to withhold millions of dollars from investors in vintage non-agency MBS spurred Redwood Trust officials to try to protect the reputation of jumbo MBS. “We’re frustrated, not just for us, but for other market participants,” Christopher Abate, Redwood’s president and CFO, said late last week during the real estate investment trust’s earnings call. “For now, we’ll just have to continue updating and educating new-issue investors, and I hope for a quick resolution to this legacy litigation issue.” As of the end of June, Wells Fargo had withheld...

Not only has the proposed sale of First Mortgage Co. fallen apart, but a recent lawsuit filed against the company by a new warehouse lending firm raises serious questions about FMC’s recent profitability and its future. As Inside Mortgage Finance went to press this week, FMC was no longer making new loans, but was still servicing its past production, estimated at $1.67 billion. Company owner and CEO Ron McCord – one of six defendants sued by warehouse provider CapLoc – said...

The Department of Justice and three other federal agencies will rake in $182 million from separate agreements by Wells Fargo and PHH Mortgage over False Claims Act charges. The PHH settlement features a rare FCA action involving loans sold to Fannie Mae and Freddie Mac. Wells Fargo agreed to pay $108 million to settle a whistleblower lawsuit filed in 2006 and unsealed in 2011. It alleged that the bank overcharged veterans by masking unallowable fees and concealing the fact in order to obtain VA guarantees for the mortgage loans. At the same time, Wells allegedly falsely certified to the VA that it was not charging improper fees. Similar charges were brought...

Ocwen Financial caught a potentially big break last week when the judge overseeing its dispute with the Consumer Financial Protection Bureau granted its request to invite the Department of Justice to weigh in. “There are at least two clear reasons to invite the Attorney General to participate here,” the company told Judge Kenneth Marra, of the U.S. District Court for the Southern District of Florida. First, it noted, district courts are required to notify the attorney general of a constitutional challenge in any action in which the U.S. government is not a party. Second, the U.S. attorney general recently filed...

The U.S. Court of Appeals for the Ninth Circuit recently held that mortgage underwriters are not “administrative employees” and, therefore, not exempt from the overtime protections of the Fair Labor Standards Act. The court’s ruling in McKeen-Chaplin v. Provident Savings Bank overturned a lower court decision and deepened a split among the circuit courts on whether certain employees of mortgage companies qualify for overtime pay. Given the conflicting circuit court opinions, attorneys are...

In a move that would benefit the secondary market for loans made by national banks, members in the Senate and the House of Representatives recently introduced legislation to clarify that interest rates on certain loans remain unchanged after the sale or transfer of the loan. In the Senate, Democrat Mark Warner of Virginia late last week introduced S. 1642, which would amend the National Bank Act to clarify that loans which are valid when made remain valid when they’re sold, even to buyers subject to different state law. Similar language would be added to the Home Owners’ Loan Act, the Federal Credit Union Act, and the Federal Deposit Insurance Act. Joining Warner in sponsoring the bill were...