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Inside the CFPB

June 8, 2009

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‘Busby’ Decision Raises RESPA Pricing Issues

A recent ruling by an Alabama federal district court over real-estate broker fees has triggered even more questions about how settlement service providers price their services and whether those charges comply with the Real Estate Settlement Procedures Act. The latest controversy stemmed from a class-action decision in Busby v. JRHBW Realty, Inc. in April which held the real estate brokerage... Read More

FTC Flexes New Mortgage Regulator Muscles

Financial institutions regulated by the Federal Trade Commission could face increased oversight as the agency wields its newly expanded authority to regulate non-bank mortgage activities. The FTC last week carried out a mandate imposed by the 2009 Omnibus Appropriations Act by issuing proposed rules aimed at curbing unfair and deceptive mortgage practices at financial institutions... Read More

Discretionary Pricing Lands California Lender in Hot Water

A California mortgage lender is accused of discriminatory pricing in federal district court for allegedly overcharging Hispanic borrowers for home loans without reasonable justification. The Federal Trade Commission, which brought the lawsuit May 7, accused Golden Empire Mortgage and owner Howard Kootstra of violating the Equal Credit Opportunity Act and its implementing... Read More

Scam Culprits ‘Spend Money to Make Money,’ Fraud Experts Say

Mortgage fraud has become so profitable and counterfeiting technology so sophisticated that perpetrators are even willing to risk investing money for bigger returns on an enterprising scam, according to mortgage fraud experts. Some scammers have taken the investor’s credo of “spending money to make money” to heart and they’re putting up money to convey an image of legitimacy, making... Read More

State Regulators Discuss Ways to Combat Increasing Loan Fraud

Law enforcement agencies are prosecuting more and more mortgage fraud cases, but as long as it remains profitable, mortgage fraud will never slow down, according to state regulators. As mortgage origination volume picks up, expect fraud to increase as well, state regulators and fraud experts said during an audio conference last week hosted by Inside Mortgage Finance Publications... Read More

U.S. Agencies Propose Rules for Placing Originators in NMLSR

Federal financial institutions regulators last week moved to strengthen consumer protections with a proposed rule requiring mortgage loan originators employed by federally regulated entities to register with the Nationwide Mortgage Licensing System and Registry, a multi-state database created to keep track of unscrupulous mortgage brokers and loan originators. The proposed... Read More

Industry Group Urges Fed to Redo Reg Z’s ‘Higher-Priced’ Threshold

In light of changes in anti-predatory lending legislation passed recently by the House, mortgage lenders are urging the Federal Reserve Board to reconsider the new threshold for “higher-priced loans” under the Home Ownership and Equity Protection Act to ensure prime loans are excluded from the category. In a May 28 letter, the Consumer Mortgage Coalition also asked that private... Read More

Mixed Response to Obama Memo On Federal Preemption Assertions

President Obama’s recent directive to federal departments and agencies to use federal preemption only when it can be justified elicited mixed reactions from both the public and private sectors. Issued by the Office of Management and Budget May 20, the directive made clear that federal preemption should be undertaken “only with full consideration of the legitimate prerogatives of the... Read More

State Roundup

California: The Department of Corporations issued final regulations clarifying the application of the California Foreclosure... New York: The NY State Banking Department issued proposed regulations that would require mortgage servicers to register... Pennsylvania: State banking regulators have issued a cease-and-desist order against Philadelphia-based U.S. Mortgage Group... Read More

Federal Roundup

Federal Trade Commission: Deceptive Mortgage Relief Ads. The FTC obtained a federal court order in Washington, DC, prohibiting an... HUD/Mortgagee Review Board: Sanctions Against Lenders. More than 120 FHA-approved lenders have been sanctioned by the Mortgagee Review... Securities and Exchange Commission: Brokers Charged With Fraud Over CMO Sales. The SEC charged 10 securities brokers with fraud for... Read More

Worth Noting …

The Office of the Comptroller of the Currency, the Federal Reserve Bank of Dallas, the Federal Deposit Insurance... North Carolina Commissioner of Banks Joseph Smith was installed May 18 as the chairman of the board of the... Read More

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