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Inside the CFPB

December 15, 2008

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Industry to Seek Clarity on RESPA Rule

Mortgage lenders are preparing a draft of technical and other important questions raised by the new Real Estate Settlement Procedures Act rule for discussion with the Department of Housing and Urban Development and Federal Reserve Board next year. The items in the Consumer Mortgage Coalition’s working draft cover nearly all important areas of the new RESPA reform rule, which... Read More

NYC Housing Boss Nominated as HUD Chief

President-elect Barack Obama nominated Shaun Donovan over the weekend to be Secretary of the Department of Housing and Urban Development – a choice well received by low-income housing advocates and the mortgage banking industry. Donovan is New York Mayor Michael Bloomberg’s top aide for housing and head of the city’s Department of Housing Preservation and... Read More

U.S. Report Finds High Redefault Rate among Modified Mortgages

A substantial chunk of mortgage loans modified in the first quarter of 2008 ended up in redefault within a few months, a trend that could get worse as the economy and housing conditions continue to slide. Discussing new findings in a mortgage metrics report soon to be released by his agency, Comptroller of the Currency John Dugan said he had no clear explanation for why redefault rates are so... Read More

GSEs Issue Implementation Guide For Streamlined Modification Plan

Fannie Mae and Freddie Mac last week announced guidelines providing new servicer flexibility to help distressed homeowners qualify for the Streamlined Modification Program, or SMP, which is being launched this week. The SMP was announced Nov. 11 by the government-sponsored enterprises, the Federal Housing Finance Agency and members of the Hope Now Alliance. The voluntary program... Read More

Fed Proposes to Conform HERA Early Disclosures with TILA Rules

The Federal Reserve last week sought comment on a proposal to conform portions of obscure revisions to Truth in Lending Act disclosures embedded in this summer’s omnibus housing law – changes that are likely to add more confusion to a mortgage compliance world already in flux. The Mortgage Disclosure Improvement Act, which amends the Truth in Lending Act, was baked into... Read More

Providers Look to 2009 to Bring Back Controversial Seller-DAPs

Providers of seller-funded downpayment assistance programs have all but given up hope on pending legislation that would reform and reinstate such programs, saying they are now focusing lobbying efforts on the incoming Obama administration and the next Congress. H.R. 6694, the FHA Seller-Finance Downpayment Reform and Risk-Based Pricing Authorization Act of 2008, has seen no... Read More

Investors Sue to Force Repurchase of Modified Loans Out of Trusts

Investors have petitioned the New York Supreme Court to certify class in a lawsuit filed early this month to compel Countrywide Financial Corp. to repurchase securitized mortgages it currently services before they are modified under a recent settlement agreement with state attorneys general. The lawsuit filed by Greenwich Financial Services Distressed Mortgage Fund 3 and... Read More

Rating Agencies Accused of Civil Rights Violations for Bad Ratings

Moody’s Investors Services and Fitch Ratings, Inc., and possibly Standard & Poor’s, are facing civil rights complaints for their alleged role in the foreclosure mess. The complaint was filed last month with the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity. The complainant, the National Community Reinvestment Coalition, is still in discussion with... Read More

Regulators Dispute Claims that CRA is to Blame for Market Crisis

The response may have been slow, but federal regulators are finally coming out in defense of the Community Reinvestment Act. On separate occasions, officials with the Federal Deposit Insurance Corp., Federal Reserve Board and Office of the Comptroller of the Currency have disputed conservatives’ claims that the CRA is partly to blame for the... Read More

State Roundup

Illinois. Gov. Rod Blagojevich’s Mortgage Fraud Task Force has padlocked two mortgage companies... New Jersey. Pursuant to triggering provisions in the New Jersey Home Ownership Security Act of... Indiana. A state task force on mortgage lending and fraud prevention has issued a legislative... Massachusetts. The state Division of Banks became the first state agency to become accredited... Read More

Federal Roundup

Department of Housing and Urban Development: Home Equity Conversion Mortgages. In Mortgagee Letter 2008-38, HUD clarified the requirements for repayment of a HECM, and for termination of a HECM.The mortgagee letter clarified misunderstanding over the description of the HECM as a “non-recourse loan.” This means that a HECM borrower (or his or her estate) “will never owe... Read More

Worth Noting …

Congress will make bankruptcy law changes if current loan modification programs to... The National Association of Realtors is advocating a federal mortgage interest buy-down... The Conference of State Bank Supervisors and the American Association of Residential Mortgage... K&L Gates, a global law firm, has formed a Distressed Real Estate Task Force, to assist lenders... Read More

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