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Inside the CFPB

April 13, 2009

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GSEs Ease HVCC Restrictions on Brokers

Fannie Mae and Freddie Mac have quietly revised their guidance on the Home Valuation Code of Conduct to allow mortgage brokers, with the lender’s approval, to request an appraisal from a lender-designated appraisal management company. The revisions were made sometime last month to address concerns that mortgage brokers have been... Read More

‘Required Use’ Could Taint Price Incentives

The revised definition of “required use” under the final Real Estate Settlement Procedures Act rule could spell trouble for unaffiliated settlement service providers and negotiated discounts, the Consumer Mortgage Coalition warned. The CMC raised the issue in a letter commenting on the Department of Housing and Urban Development’s proposed withdrawal of “required use,” which is currently... Read More

Defense Attorneys in NAHB Suit Expect to Prevail Against HUD

Industry lawyers challenging a “required use” provision in the new final Real Estate Settlement Procedures Act rule expressed confidence that they can stop the Department of Housing and Urban Development from enforcing the controversial measure. Speaking on a panel at last week’s Real Estate Service Providers Council annual conference, Mitch Kider, lead counsel in the National Association of Home Builders’ lawsuit against HUD, said... Read More

Passage of H.R. 1728, Modernized Financial Regulation Top Agenda

Congress will focus in the next couple of weeks on getting legislation on anti-predatory lending and modernization of financial services regulation passed, according to legislative aides. Discussing the legislative outlook for the mortgage industry at last week’s conference of the Real Estate Service Providers Council in Washington, DC, aides to... Read More

Agencies in Coordinated Move to Curb Foreclosure Rescue Scams

The Federal Trade Commission has cracked down on operations that use deceptive tactics to market their mortgage modification and home foreclosure relief services. The FTC action is part of a wider federal and state enforcement effort to stamp out modification and foreclosure rescue scams that target distressed homeowners who are... Read More

Legislative Fix for H4H Could Open Door to Mortgage Fraud

Legislation that would relax HOPE for Homeowners’ underwriting standards may create an opportunity for mortgage fraudsters to exploit desperate homeowners, at-risk lenders, and the FHA mortgage insurance fund, warned the Department of Housing and Urban Development’s internal watchdog. HUD Inspector General Kenneth Donohue warned lawmakers on the... Read More

Administration Position in SCOTUS Preemption Case Not Surprising

Supporters of state rights are disappointed but not surprised by a brief filed by the Obama administration in support of federal preemption of state consumer protection laws in Andrew Cuomo v. The Clearing House Association and the Office of the Comptroller of the Currency. The U.S. Supreme Court has agreed to review the case, which has intensified the dispute between states and the federal government over state enforcement authority against federally chartered banks. At issue… Read More

State Roundup

Virginia. Gov. Timothy Kaine, D, on March 27 signed a series of bills to implement federal licensing and registration requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and to tighten restrictions on mortgage lenders and mortgage brokers. HB 2031 implements the SAFE Act and requires mortgage loan originators to obtain their license from the State Corporation Commission through the Nationwide Mortgage Licensing System and Registry. HB 2030 repeals… Read More

Federal Roundup

Financial Crimes Enforcement Network: Foreclosure Rescue Scam Advisory. FinCEN issued an advisory to financial institutions April 6 on how to report bogus “foreclosure rescue services” using Suspicious Activity Reports. When applicable, FinCEN requests that “foreclosure rescue scams” be included in a SAR’s narrative portion. Signs of such scams include when a homeowner makes payments to somebody other than the mortgage holder or servicer or pays advance fees for foreclosure or... Read More

Worth Noting ...

On April 2, the Financial Accounting Standards Board approved the final draft of new guidance to clarify procedures for estimating market values in inactive markets. The guidance emphasizes the need for banks and their auditors to use their best judgment in determining the fair values of illiquid assets and when they should be marked down. The FASB also approved new draft guidance regarding the accounting for debt securities that are required to be reported as… Read More

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