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Inside the CFPB

October 26, 2009

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Compromise Reached on CFPA Preemption

The House Financial Services Committee last week approved legislation that would strengthen state consumer protection oversight of federally chartered financial institutions and their operating subsidiaries but still allow limited federal preemption. Lawmakers appeared to have achieved... Read More

Experts Warn of Increased Fair Lending Cases

Financial institutions should begin focusing on fair lending now rather than wait for the Consumer Financial Protection Agency – a new federal regulator that is at least two years away from reality, if it ever gets created at all – to set the rules, according to compliance experts. Federal regulators are increasing their fair lending scrutiny and... Read More

HVCC Sunset Provision Added to Consumer Protection Legislation

The House Financial Services Committee approved an amendment to sunset the Home Valuation Code of Conduct after a proposed federal consumer watchdog agency announces new standards for appraisal independence. Introduced by Rep. Gary Miller, R-CA, during markup of H.R. 3126, the Consumer Financial Protection Agency Act, the amendment would require... Read More

RESPA Delay in CFPA Bill Yanked, Lenders Turn to Senate for Relief

Industry groups may have to look to the Senate to back their bid to set aside or delay the implementation of a controversial Real Estate Settlement Procedures Act final rule through consumer protection legislation. Last week, a bipartisan amendment postponing the rule’s implementation date of Jan. 1, 2010, in favor of a “reasonable” implementation period was offered but... Read More

Servicers’ Fair Lending Risk Rises With Loss Mitigation, Loan Mods

Fair lending experts are warning mortgage servicers to expect discrimination claims based on disparities in loan modification and other workout terms, especially where discretion is involved. anelists at the Consumer Bankers Association’s fair lending conference last week said the regulatory focus is on providing loan modifications to distressed borrowers. There are weaknesses in the process that could pose fair lending risk... Read More

NY Urged to Drop Requirement of FICOs in License Applications

The financial services industry is opposing a recent change made by the New York State Banking Department to its mortgage originator licensing form, saying it could adversely affect applicants and, ultimately, consumers. In a letter to the NY State Banking Board, the American Financial Services Association expressed concern about the requirement to submit a FICO credit score in addition to credit reports. The trade group clarified that... Read More

House Panel to Begin Probe of Countrywide’s VIP Loan Program

Did Countrywide Financial Corp. try to curry favors from members of Congress in return for so-called VIP mortgages? That’s what Rep. Edolphus Towns, D-NY, chairman of the House Oversight and Government Reform Committee, wants to find out as he announced an investigation into Countrywide’s VIP program late last week. Towns is planning to subpoena loan records and... Read More

U.S. Court Denies Injunction Request Against FHA Lender

Lend America said it will continue to originate FHA-insured loans after a New York federal court last week denied a government request for an order to stop the lender from doing any more FHA business. Filed in federal court in Central Islip, the complaint accused Ideal Mortgage Bankers, which also does business as Lend America, of falsely certifying that borrowers who received... Read More

State Roundup

California. On Oct. 12, Gov. Arnold Schwarzenegger, R, signed seven bills into law to increase protections for consumers in the lending market and provide more tools to law enforcers to crack down on unfair and deceptive mortgage practices. A summary of each bill follows... Read More

Federal Roundup

OTS Revises Reg C Procedures. On Oct. 15, the OTS announced changes to its examination procedures to reflect new revisions to Regulation C reporting requirements for higher-priced mortgage loans (HPML) under the Home Mortgage Disclosure Act. Under the latest changes, lenders are required to establish procedures for collecting the rate spread between... Read More

Worth Noting

Robert Story, president/CEO of Seattle Financial Group, was elected 2010 chairman of the Mortgage Bankers Association at the group’s recent annual convention in San Diego. Michael Berman was named chairman-elect, while Michael Young was named vice chairman. All three officers will serve for the 2009-2010 membership year. Story intends to focus on the association’s legislative and regulatory agenda, including… Read More

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