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Inside the CFPB

January 11, 2010

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Caution Urged on Term-Based Pay Prohibition

Lenders and borrowers should be able to reward mortgage brokers appropriately for suitable loan products that may require some extra effort to obtain, provided no steering occurs, according to industry groups. The groups warned that the Federal Reserve Board’s proposal to prohibit loan originators from receiving compensation based on the rate and terms of loans threatens to undo commission-based... Read More

New Loan Assignment Notice Rules Kick In

Compliance with an interim final rule requiring loan purchasers and assignees to notify consumers of the sale or transfer of their mortgage loans is due to become mandatory Jan. 19. The interim rule implements a change in Truth in Lending Act regulations, which was enacted May 20 last year as part of the Helping Families Save Their Homes Act of 2009. The new TILA amendment established a... Read More

FDIC Asked to Temporarily Curb Zealous RESPA Enforcement

The Consumer Mortgage Coalition is asking to meet with the Federal Deposit Insurance Corp. in the wake of the group’s request for a four-month reprieve on enforcement of new disclosure requirements under the Real Estate Settlement Procedures Act. On Dec. 23, the FDIC surprised the mortgage industry by formally announcing that agency examiners will begin examining for RESPA... Read More

FHA Origination Fee Cap Dropped

The Department of Housing and Urban Development has removed the 1 percent origination fee cap on FHA-insured mortgages as part of its implementation of new Real Estate Settlement Procedures Act rules that took effect Jan. 1. The agency action is consistent with a new RESPA provision requiring mortgage lenders to disclose a single, bundled origination fee... Read More

Industry Warns of New Obligations, Liabilities Under ‘Furnisher’ Rule

A tsunami of new “furnisher” rules under the Fair and Accurate Credit Transactions Act of 2003 is slated to swamp the industry in mid-2010. Published on July 1, 2009, the final rules implement a FACTA amendment to the Fair Credit Reporting Act which requires federal banking agencies and the Federal Trade Commission to issue rules and guidelines to enhance the accuracy... Read More

HUD Urged to Share Supervisory Duties with Lenders over Brokers

A Department of Housing and Urban Development proposal “goes too far” in shifting all supervision of mortgage brokers and other loan correspondents to FHA-approved lenders, the National Association of Mortgage Brokers warned. Issued on Nov. 30, 2009, HUD’s proposed rule would increase the net worth requirements for FHA-approved lenders and eliminate the independent... Read More

U.S. Court Denies Entitlement Claim to HAMP Loan Modification

Borrowers do not have a legitimate claim of entitlement to a loan modification because the government’s Home Affordable Modification Program does not provide a “protected property interest” for borrowers, according to a recent Minnesota district court ruling.Judge Ann Montgomery of the U.S. District Court for the District of Minnesota denied a motion for preliminary injunction after... Read More

NY Banking Regulators Toughen Oversight of Mortgage Servicers

New York banking regulators have stepped up supervision of mortgage loan servicers by issuing draft rules that would impose substantive restrictions on servicers, including those currently exempt from servicer registration requirements. Announced on Dec. 15, the draft rules contain many onerous provisions that could cause problems for New York servicers, warned compliance experts... Read More

State Roundup

New York: Gov. David Paterson and state banking regulators ended 2009 with a... Florida: The state Supreme Court has ordered mandatory mediation for all new home foreclosures... North Carolina: The mortgage banking industry called upon NC Commissioner of... Massachusetts. A Suffolk County grand jury has indicted three real estate investors... Illinois. The Nationwide Mortgage Licensing System and Registry went live Jan. 4 in... Read More

Federal Roundup

Federal Trade Commission: Price for Extra Credit Report Copies Lowered. The price for an extra copy of a consumer credit report has been reduced to $10.50 from $11... FRB/OCC/FDIC/OTS: CRA Asset-Size Thresholds Adjusted. On Dec. 22, federal banking regulators announced the annual... Read More

Worth Noting …

There will be no change in 2010 in the asset-size threshold for depository institutions... On Jan. 6, U.S. district court judge in Maryland granted Wells Fargo’s... On Jan. 9, the Federal Trade Commission ordered the nation’s largest consumer... Illinois Gov. Pat Quinn signed into law new provisions expanding the anti-predatory... The Federal Trade Commission has launched its Web site and blog for... Read More

Retirement Plan May Result in Weaker Consumer Protection Bill

Senate Banking Committee Chairman Christopher Dodd’s decision to retire at the end of the year will likely result in a Senate regulatory reform bill that is more bipartisan but far weaker than the draft proposals the Connecticut Democrat unveiled in mid-November, according to industry observers. Observers say that Dodd’s announcement frees him from re-election pressures to engage in... Read More

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