A group of six real estate finance trade organizations has called upon the Department of Housing and Urban Development to hold off on implementing a proposed rule on the discriminatory effects standard of the Fair Housing Act until the U.S. Supreme Court can weigh in on the issue this spring. The American Bankers Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Independent Community Bankers of America and Mortgage Bankers Association asked HUD to postpone its rulemaking process to establish uniform standards for discrimination under the...
President Obama used his State of the Union address this week to announce a new federal-state law enforcement project aimed at mortgage origination and securitization practices and to propose a broad federal refinance program for performing underwater non-agency mortgages that would be funded with fees imposed on banks. Most observers say the refi proposal stands little chance in Congress and is mostly a campaign tool aimed at banks and the track record of Republican lawmakers. Im sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a...
The never-ending board game over mortgage foreclosure processing errors flailed through another week of meetings between state attorneys general, top lenders and federal officials that were so informal many didnt confirm that they were in attendance. A leaked copy of a new draft settlement indicates that the latest offer on the table includes $17 billion in principal reductions and a $5 billion reserve account for state and federal programs. According to the Associated Press, some of that account would pay for $1,800 checks to homeowners affected by banks deceptive practices. Another $3...
The Supreme Court of the United States plans to hear oral arguments late next month in Freeman v. Quicken Loans, a case that could have wide-ranging implications for lenders subject to the Real Estate Settlement Procedures Act. The issue before the high court is whether RESPA Section 8(b) 12 USC 2607(b) prohibits a real estate settlement services provider from charging an unearned fee only if the fee is split between two or more parties.The language of that provision of the statute states that no person shall give and no person shall accept any portion, split or ...
The U.S. Court of Appeals for the Sixth Circuit recently took on Molosky v. Washington Mutual Inc., which addressed the preemption of certain state law claims under the federal Home Owners Loan Act. The plaintiffs in this case alleged that certain fees charged by their loan servicer in connection with the prepayment of their mortgage violated both the Michigan Usury Act and their mortgage contract.The lower court had previously rejected the suit on the basis of HOLA preemption, prompting the borrowers to appeal. The Sixth Circuit basically split the difference. On the one hand, the ...
California. In Balderas v. Countrywide Bank, N.A., the U.S. Court of Appeals for the Ninth Circuit recently ruled that the Truth In Lending Acts delivery obligation requires borrowers be permitted to keep written copies of the right-to-rescind notice. The court noted that to deliver the notice as per TILA requires a permanent physical transfer from one party to another, as opposed to momentary delivery. Illinois. Earlier this month, the Department of Financial and Professional Regulations published amendments to the states mortgage originator licensing requirements. One change ...
PHH Corp. has become the first publicly identified lender targeted to be investigated by the new Consumer Financial Protection Bureau, which is trying to determine if PHH steered mortgage borrowers into using its captive mortgage reinsurance program, the firm revealed last week. In January 2012, the Consumer Financial Protection Bureau notified the company that the CFPB had opened an investigation to determine whether mortgage insurance premium ceding practices to the companys captive reinsurers comply with the Real Estate Settlement Procedures Act and other laws enforced by the CFPB and requested certain...
Shaun Donovan, secretary of the Department of Housing and Urban Development, this week said the multistate foreclosure settlement is very close to reaching its conclusion, during a speech at the U.S. Conference of Mayors. However, a meeting last week among more than a dozen state attorneys general to discuss alternatives and to air grievances suggests there is still a lot of work to do. Some of the state AGs attending the meeting have been outspoken regarding their frustrations with the process. They included Kamala Harris of California and Eric Schneiderman of New York, who are not currently...
The Securities and Exchange Commission has adopted a modified policy that will require defendants in settlement agreements to admit to wrongdoing if they have already pled guilty in parallel criminal cases. Following a review by senior enforcement staff that began this spring and separate discussions with the commissioners over the last several months, last week we modified our settlement language for cases involving criminal convictions where a defendant has admitted violations of the criminal law, said SEC Enforcement Director Robert Khuzami.The new policy does not require admissions...
PHH Corp. over the last month has felt the pinch of being the largest mortgage banking business not associated with a depository institution as it faced some setbacks in lining up financing for its operations. The company this week priced a $220 million offering of 6.00 percent convertible senior notes that is being co-managed by JPMorgan Securities and BofA Merrill Lynch. That was up from the $150 million offering originally announced, and PHH gave the underwriters the option to purchase an additional $30 million. PHH will use the money to pay off $250 million of 4.00 percent convertible senior...