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Inside the CFPB

November 23, 2009

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New Liabilities, State-Law Issues in New Rule

New mortgage settlement rules taking effect in 2010 are tough but not impossible to comply with, particularly if federal and state regulators grant the same temporary compliance space the Department of Housing and Urban Development gave to FHA lenders, according to compliance experts. HUD’s decision to exercise some restraint during the first 120 days of implementation of the... Read More

Servicers Exempt from SAFE Act Registration

Employees and mortgage servicers that engage in loan modifications on behalf of an insured depository institution are excluded from registration requirements under the Secure and Fair Enforcement for Mortgage Licensing Act – as long as they don’t act as loan originators. Draft final rules adopted last week by the Federal Deposit Insurance Corp. made clear that the SAFE Act’s definition... Read More

HUD Willing to Bend Some on Restrictions to Standardized GFE

Lenders and settlement service providers may use extra worksheets or separate pages for additional information as long as they do not alter or expand the standard good faith estimate form provided under new Real Estate Settlement Procedures Act rules, according to federal housing officials. Industry participants may provide information beyond what is required under the new RESPA... Read More

HUD to Hold Back Enforcement of RESPA Rule During 120-Day Period

Unless federal banking regulators, plaintiff attorneys and courts agree to get on board, the Department of Housing and Urban Development’s 120-day restraint on enforcement of the new Real Estate Settlement Procedures Act final rule will have only limited use, industry observers say. HUD’s recent instruction to its Mortgagee Review Board to exercise restraint in enforcing the new... Read More

Fed Proposes Consumer Notice When Loan is Sold or Transferred

The Federal Reserve Board is seeking comment on an interim final rule that would require purchasers or assignees of loans to provide notice to consumers when their mortgage loans have been sold or transferred. The interim rule implements a new section of the Truth in Lending Act, which Congress enacted in May as part of the Helping Families Save Their Homes Act. The HFSTHA aims to... Read More

Fed Says No HOEPA Ban on Short Term, Higher-Priced Balloon Loans

Despite restrictions in the Truth in Lending Act’s newly revised Regulation Z on higher-priced short-term balloon loans, there are ways lenders can originate such loans and still comply with “repayment ability” requirements, according to the Federal Reserve Board. In guidance issued Nov. 9, the Fed provided lenders some clarification regarding Reg Z’s repayment ability rule for... Read More

Borrower Notices Fail to Bring Transparency to HAMP Reviews

A new government directive requiring mortgage servicers to disclose why a homeowner failed to qualify for a trial or permanent loan modification is not making the decision-making process any clearer, according to consumer protection advocates. Issued by the Treasury Department Nov. 3, Supplemental Directive 09-08 strengthens servicer accountability by requiring written notices to borrowers who were... Read More

NC Urged to Withdraw, Reflect Further on Mortgage Proposals

The mortgage banking industry is urging North Carolina regulators to reconsider going forward with mortgage rules proposed early this month to reduce foreclosures and strengthen protection of consumers.In a joint letter, the Mortgage Bankers Association and its local affiliate, the Mortgage Bankers Association of the Carolinas, are concerned that the proposed rules will either be duplicative... Read More

State Roundup

Florida: State Attorney General Bill McCollum announced a lawsuit Nov. 9 against two foreclosure rescue service companies that allegedly illegally charged up to $2,500 in upfront... New York: On Nov. 16, Gov. David Paterson announced the passage of legislation providing additional protection to NY homeowners and tenants from foreclosure. The Governor’s Program... Read More

Federal Roundup

Department of Justice: Interagency Financial Fraud Enforcement Task Force Created... House Financial Services Committee: MBS Risk-Retention Share Eased... Federal Deposit Insurance Corp.:HAMP Loan Risk Weights Clarified... Department of Housing and Urban Development: Penalties Imposed on FHA Lenders... Read More

Worth Noting …

The Santa Ana, CA, Home Ownership Center will host a two-hour seminar and update on the new Real Estate Settlement Procedures Act rule Dec. 2. The rule will take effect.... Experian has announced a suite of “ability to pay” products – Income Insight and Income View – designed to be the definitive source for determining consumers’ ability to pay... Read More

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