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Inside the CFPB

November 9, 2009

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Lenders to Face Grueling Multi-State Exams

State regulators will begin to implement a tough multi-state examination regime for non-depository residential mortgage lenders operating in two or more states in early 2010 and gradually phase in all other multi-state mortgage entities, or MMEs, in early 2011. The new multi-state audits will be much more intense than the current single-state exams, warned Phil Schulman... Read More

Regulation Z Problems Emerging, Fed Urged to Rethink HPML Rules

Truth in Lending Act regulations pertaining to “higher-priced mortgages” are causing many lenders to cut back on their lending because “far too many prime loans” are coming under the definition, warned the American Bankers Association. In a recent letter, the ABA urged the Fed to reconsider changes to Regulation Z, which implements TILA, involving higher-priced mortgage loans, or HPMLs... Read More

New Reg Z Rules Trigger Increased Scrutiny of Servicing Practices

Mortgage servicers should pay closer attention to the payment application process under the new Truth in Lending Act servicing regulations, particularly in the context of daily simple interest and variable rate loans, according a recent analysis by law firm Lerner, Sampson & Rothfuss. Regulation Z, which implements TILA, signals a new era of increased scrutiny of servicing activities and... Read More

Servicers Face Many Stumbling Blocks in Implementing HAMP

There are many regulatory barriers to implementing the government’s Home Affordable Modification Program that servicers need to know about before signing up for HAMP, according to a top compliance attorney. Foremost are state and local licensing laws, said Larry Platt, a partner with the Washington law firm K&L Gates. “Typically, individual employees engaged in loss mitigation have never been... Read More

Loan Servicers Waver on MERS as Courts Question Registry’s Status

Recent adverse state court decisions in Kansas and Massachusetts have caused mortgage servicers’ confidence in the Mortgage Electronics Registration System to falter, according to Moody’s Investors Service. In a recent analysis, the credit rating agency said that because of the rulings, private-label securitization servicers are forced to alter their foreclosure and bankruptcy... Read More

Conflicting Panels Look to Settle CFPA Impasse Before House Vote

A major disagreement between two House committees over whether a single director or a commission should lead the proposed Consumer Financial Protection Agency will be resolved before the House votes on the bill, according to the spokesman for one of the committees.It is not clear, however, whether the House Financial Services Committee and the House Energy and Commerce Committee... Read More

Option ARM Recast Data Sought; Contingency Plans Requested

California Attorney General Edmund Brown has asked 10 top banks and loan servicers in the state to provide information on payment option ARMs with rates due to reset soon and the steps they have taken to help borrowers avoid foreclosure. Letters from the AG’s office were sent to: Bank of America; Wells Fargo; JPMorgan Chase; Litton Loan Servicing; ResCap; Ocwen Financial Corp.; OneWest Bank... Read More

State Roundup

Ohio: State Attorney General Richard Cordray has filed a lawsuit against American Home Mortgage Servicing for allegedly unfair and deceptive loan modification practices... California: On Oct. 11, Gov. Arnold Schwarzenegger, R, signed into law S.B. 94 prohibiting entities that offer loan modification or other forbearance services from demanding... Read More

Federal Roundup

Federal Trade Commission: Red Flag Rule Enforcement Deadline Extended. At the request of Congress, the FTC has delayed enforcement of the ID Theft Red Flag Rule until June 1, 2010, for... Department of Justice: “Mortgage Fraud Surge.” An aggressive nine-month long investigation by the U.S. Attorney’s Office for the Middle District of Florida has resulted in charges... Read More

Worth Noting …

President Obama signed into law legislation approved overwhelmingly by... President Obama signed a continuing resolution that includes language... The Department of Housing and Urban Development is hosting a two-hour seminar... The Southern California Foreclosure Housing Counselor Forum will host a... Read More

Court Lets RESPA Captive Re Case Proceed

The U.S. Court of Appeals for the 3rd Circuit has allowed a class-action lawsuit to proceed against Countrywide Financial and its captive reinsurer for allegedly orchestrating a nearly $900 million reinsurance kickback scheme that affected hundreds of thousands of borrowers in violation of the Real Estate Settlement Procedures Act. The recent decision also clears the... Read More

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