Late last week, the CFPB released updates to its exam procedures in connection with the new mortgage regulations issued in January 2013 and amended through Oct. 15, 2013. The updates offer financial institutions and other industry participants valuable guidance on how the bureau will conduct examinations for compliance with the Truth in Lending Act and the Real Estate Settlement Procedures Act, the agency said. The bureau updated the supervision manual to reflect the renumbering of the consumer financial protection regulations for...

Towards the end of November, the Republican-controlled House Financial Services Committee passed six pieces of legislation in an attempt to bring more oversight, accountability and transparency to the CFPB, all of which largely passed on a party-line vote, give or take a vote or two. One of the most important of the batch for lenders is H.R. 3193, the Consumer Financial Protection Safety and Soundness Act of 2013, introduced by Rep. Sean Duffy, R-WI. The legislation would require the CFPB to consider the safety and...

Last month, the CFPB took its first enforcement action against a payday lender by ordering Cash America International Inc. to refund up to $14 million to consumers for robo-signing court documents in debt collection lawsuits and for illegally overcharging service members and their families. The publicly traded financial services company headquartered in Ft. Worth, TX, also was compelled to pay a $5 million fine for the violations and for destroying records in advance of the bureau’s examination. In terms of specific...

Tax forgiveness enacted by Congress in 2007 for mortgage-debt relief is scheduled to expire at the end of this year. In a similar scenario last year, Congress agreed to a one-year extension of the tax break, but analysts are less certain that Congress will pass another extension in the weeks ahead. The Mortgage Forgiveness Debt Relief Act of 2007 exempts borrowers from federal tax obligations for debt forgiven via principal-reduction loan modifications and short sales. Congress has twice extended the deadline for the expiration of the tax break. “Policymakers have expressed...

Two crucial legal events occurred in 2013 that might have signaled the extinction of the narrow window through which deficiency judgments were possible on residential property in California. Attorneys at Nossaman LLP said the recent passage of California Senate Bill 426 and the conforming decision by the California Court of Appeal, Fourth Appellate District, have made clear that the state’s anti-deficiency statutes not only protect home loan borrowers from judgments or collections but also trump any separate lender/borrower agreement regarding the payment of any deficiency following a foreclosure or a short sale. A deficiency judgment is...

JPMorgan Chase announced two separate settlements recently totaling $17.5 billion regarding non-agency mortgage-backed securities issued before the financial crisis. A $13.0 billion settlement was reached with federal and state entities, while a tentative $4.5 billion settlement was reached with non-agency MBS investors. The Department of Justice said the $13.0 billion settlement involving the Residential MBS Working Group established by President Obama was the largest settlement with a single entity ...

Many condominium properties continue to struggle to meet stringent FHA requirements while many condo projects are being denied approval despite the easing of FHA approval requirements in recent years. Panelists at a recent National Association of Realtors conference in New Orleans said condos are often the most affordable homeownership option for first-time homebuyers, single borrowers and senior citizens, especially when purchased with FHA financing. Condominium loans are among the strongest performing loans in the FHA portfolio, they added. However, FHA data show that ...

In just a matter of days, JPMorgan Chase agreed to two separate settlements totaling $17.5 billion to resolve federal and state civil claims as well as representation and warranty and servicing claims involving residential MBS. On Nov. 19, the Department of Justice, along with other federal and state agencies, announced a $13 billion settlement with JPMorgan, which acknowledged making misrepresentations about billions of dollars in MBS sold to investors prior to Jan. 1, 2009. The settlement is said to be the largest combination of damages and civil fines for a single entity in U.S. history. Most of the damage was inflicted...

The Securities and Exchange Commission is preparing to take more cases to trial in lieu of settling, according to Mary Jo White, chair of the SEC, who prompted a change in the agency’s protocol for settling cases with no admission or denial of guilt. “In this age of diminishing trials, we at the SEC may be about to reverse the trend a bit,” White said in a speech late last week. Shortly after White took over as chair of the SEC, she said...

A group of House Democratic lawmakers is warning the Federal Housing Finance Agency that prohibiting GSE access to municipalities that use eminent domain to restructure underwater mortgages would constitute illegal discrimination against minority homeowners. In a letter to FHFA Acting Director Edward DeMarco, a group of 10 House Democrats led by Minnesota Rep. Keith Ellison said Fannie Mae’s and Freddie Mac’s refusal to insure loans seized and rewritten via eminent domain would be illegal under the Fair Housing Act and violate credit discrimination laws.