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Inside the CFPB

September 28, 2009

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Reactions Mixed to Frank’s CFPA Changes

Lenders welcomed proposed modifications to the Obama administration’s Consumer Financial Protection Agency bill floated by Rep. Barney Frank, D-MA, last week, although they still have not abandoned efforts to quash the measure. Lenders said they are pleased that the proposed changes in Frank’s two-page memo appear to address industry concerns. The revised discussion... Read More

FHA Makes Lenders Liable for Broker Errors

Wholesale FHA lenders will be on the hook for all FHA-insured loans originated by mortgage brokers, which in turn is expected to increase lender vigilance over third-party compliance with consumer protection laws and regulations. The change, one of several policy changes announced recently by the Department of Housing and Urban Development, will align the FHA with Fannie Mae and Freddie Mac... Read More

Fed Extends Compliance Review to Non-Bank Subsidiaries of BHCs

Non-bank subsidiaries of bank holding companies and foreign banks will now be subject to the Federal Reserve Board’s routine consumer compliance review to prevent a repeat of the recent subprime mortgage market meltdown. The new policy, which took effect immediately, also instructs Fed field staff to begin investigating consumer complaints against non-bank affiliates by next summer... Read More

HOEPA Rules Threaten to Meddle With Post-Payoff Interest Rule

Financial trade associations are urging the Federal Reserve Board to clarify the treatment of “post-payoff interest” in connection with FHA loans that may fall under new Home Ownership and Equity Protection Act regulations taking effect on Oct. 1. In a joint letter, the Mortgage Bankers Association, American Bankers Association, and Consumer Mortgage Coalition warned... Read More

Bar Names Lawyers Accused of Loan Modification Misconduct

Alarmed by the number of lawyers preying on vulnerable homeowners, the State Bar of California broke confidentiality and named 16 attorneys who are being investigated for misconduct related to loan modification. Interim Chief Trial Counsel Russell Weiner said he was astounded by the number of attorneys who used their law licenses to con clients facing foreclosure... Read More

Feds, States in Joint National Campaign v. Foreclosure Scams

Federal agencies and state attorneys general have agreed to wage a coordinated war against loan modification and foreclosure relief fraud even as the Federal Bureau of Investigation reported a continued increase in mortgage fraud activity nationwide. Emerging from a meeting with 12 state attorneys general, five government agencies – the Treasury Department... Read More

Notions Vary on Role CFPA Should Play in New Regulatory Regime

While agreeing on the need for enhanced consumer protections, federal and state regulators remain divided on the role the proposed Consumer Financial Protection Agency should play in a new, restructured regulatory regime for financial institutions. State banking regulators believe that prudent regulators should continue to examine for safety and soundness and consumer protection... Read More

Congress Urged to Make Bank Affiliates Subject to CRA Review

State regulators and community advocates have urged Congress and federal banking regulators to require that all lending and activities of bank affiliates be part of a bank’s Community Reinvestment Act performance review. At a recent House Financial Services Committee hearing, the Conference of State Bank Supervisors, National Community Reinvestment Coalition and several... Read More

Industry Players ‘Drowning’ in a Torrent of New Compliance Rules

Participants in the Mortgage Bankers Association’s recent regulatory compliance conference say they are increasingly overwhelmed by the number of new mortgage laws and regulations they must comply with currently and in the coming months. Lenders say they are incurring massive costs to purchase, develop or tweak systems to accommodate regulatory changes. Despite their best efforts, many are left... Read More

State Roundup

California. On Sept. 9, the California legislature approved A.B. 764, which would prohibit loan modification consultants from receiving advance fees until the terms of the loan have been modified. The bill is pending approval by Gov. Arnold Schwarzenegger. Licensed residential mortgage lenders, mortgage servicers and real estate brokers are exempt from the legislation... Read More

Federal Roundup

Federal Trade Commission: Mortgage Relief Service Scams. Two more companies bit the dust as the FTC continued cracking down on... FRB/OCC/OTS/FDIC: NPR on FAS 166/167. Federal thrift and banking agencies are seeking comment on a joint notice of proposed... Federal Deposit Insurance Corp.: Foreclosure Prevention Tool Kit. The Fed issued a free tool kit of information to help... Read More

Worth Noting …

A new study by consultancy firm Empiris examines from an economic standpoint why uniform... The global financial crisis appears to have triggered an international interest in... The Federal Deposit Insurance Corp. has named the 14 members for its Advisory Committee... Sen. Judd Gregg, R-NH, has been named to fill the seat on the Senate Committee... Read More

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