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Inside the CFPB

May 11, 2009

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Potential Liabilities Dampen Industry Gains

The House of Representatives’ passage last week of legislation designed to stop predatory and abusive mortgage lending elicited a mixed response from industry and left a chill on creditors, assignees and securitizers. On May 7, the House passed H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009, by a vote of 300-114 after two days of intense floor debate... Read More

GSEs to Enforce HVCC in Reps and Warranties

Fannie Mae and Freddie Mac will enforce the new Home Valuation Code of Conduct through regular seller/servicer operation reviews and in the representations and warranties for loans delivered and sold to the two government-sponsored enterprises. The HVCC became part of the companies’ seller/servicer guides as of May 1, the code’s implementation date. Beginning that... Read More

With More Foreclosures Expected, Durbin Vows to Try Again in 2010

Sen. Richard Durbin, D-IL, vowed to try to reintroduce cramdown legislation in the next Congress after the Senate last week rejected the measure on a 51-to-46 vote. The lead proponent of the so-called cramdown provision, Durbin had earlier this year appeared to gain momentum for his bill after snagging Citigroup’s endorsement. No other banks, however... Read More

HUD Seeks Funding to Help Battle Mortgage Fraud, Lending Abuses

The Department of Housing and Urban Development has asked Congress to allocate $37 million in the next fiscal year to help fund efforts to combat mortgage fraud and predatory practices. The request comes as HUD gears up to deal with the anticipated increase in both home loan fraud and lending abuses brought about by the current financial crisis and the dramatic increase in... Read More

Fed Issues Final Rules on HERA’s Early Truth-in-Lending Disclosures

The Federal Reserve Board last week approved final rules requiring creditors to provide early disclosures to consumers about the cost of the mortgage they are trying to obtain for either a primary or secondary home. The final rules revise the mortgage disclosure requirements under the Truth in Lending Act’s Regulation Z and implement the Mortgage Disclosure Improvement Act of 2008... Read More

Examiners Told Not to Be Hasty in Reclassifying High LTV Mortgages

Residential refinance loans that lower the interest rate of a performing mortgage with a higher loan-to-value ratio generally should not be adversely classified as long as they follow sound underwriting guidelines, according to new guidance issued April 30 by the Federal Deposit Insurance Corp. In FIL-19-2009, the FDIC affirmed that the standards in the Uniform Retail Credit... Read More

FTC Delays Enforcement of Red Flags Rule to Help Firms Comply

The Federal Trade Commission has delayed enforcement of the “Red Flags” rule until Aug. 1, because some businesses are unprepared for the changes. The delay would give mortgage brokers and certain financial institutions that the FTC regulates more time to develop and adopt written identity theft prevention programs... Read More

HUD Defends FHA Nominee as Shelby Delays Confirmation

The Department of Housing and Urban Development is standing by David Stevens, the Obama administration’s pick to become the next FHA commissioner. Lawmakers in the Senate Committee on Banking, Housing and Urban Affairs last week blocked Stevens’ nomination in relation to a lawsuit filed against Stevens’ former employer, Long & Foster, and it’s a “petty objection"... Read More

SCOTUS Hears Arguments on State Enforcement Against Banks

The U.S. Supreme Court on April 28 heard arguments in a case brought by New York Attorney General Andrew Cuomo contending that the federal government is wrong in preventing states from enforcing their own laws against national banks. While states may have different laws that apply to national banks, the federal government is arguing for sole authority to enforce those separate... Read More

State Roundup

Florida. Attorney General Bill McCollum announced April 30 that his office has... Massachusetts. State banking regulators issued frequently-asked-questions guidance... Pennsylvania. The state Department of Banking ordered four out-of-state mortgage... Nevada. The state Commissioner of Mortgage Lending issued final rules April 23 amending... Read More

Federal Roundup

Federal Trade Commission: Submitting Information for FACTA Study. Homeowner insurance providers may now submit information for use in a study mandated... Federal Deposit Insurance Corp.: Temporary Satellite Office. The FDIC will open a temporary satellite office in Jacksonville, FL, to manage receiverships... Read More

Worth Noting …

Significant changes were made recently to the Obama administration’s Making Home Affordable refinance and loan modification plan to provide incentives to servicers of second mortgages and encourage more people to take advantage of the HOPE for Homeowners program. Because many of these second mortgages are also held by the first lien holder, servicers must automatically... Read More

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