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Inside the CFPB

February 22, 2010

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Industry Adjusting Slowly to RESPA Change

It has in no way been easy, but mortgage lenders are slowly coming to grips with the sweeping new consumer protection and disclosure requirements mandated by the new Real Estate Settlement Procedures Act regulations. “I think we’re all flying by the seat of our pants on this thing,” said Phil Schulman, a partner in K&L Gates, during a recent audio conference sponsored by Inside Mortgage Finance... Read More

Proposed GSE Goals Ignore Non-GSE Loans

Fannie Mae and Freddie Mac would continue to support the production of affordable mortgages under a new proposed rule, but it’s not clear whether lenders should build production strategies geared toward those goals as long as the future of the government-sponsored enterprises remains in limbo. When the GSEs were placed in conservatorship in late 2008, there was a widespread assumption... Read More

Consumer Protection Plans Take Shape in Congress

Protracted negotiations in the Senate Banking, Housing and Urban Affairs Committee over a new consumer protection regime ground to a standstill earlier this month, but both sides are moving on to develop new legislative alternatives. The panel’s two main protagonists – Connecticut Democrat Chris Dodd and Alabama Republican Richard Shelby – struggled for nearly two months... Read More

Fair Lending Analysis Should Weigh Lender’s Overall Strategy

Reaching reliable conclusions about a lender’s discriminatory lending practices is hard to do, even with transaction details beyond what’s available under the Home Mortgage Disclosure Act, according to a government researcher. Accurate fair-lending assessment requires consideration of a lender’s entire business practice as well as the extent that borrower behavior shaped the... Read More

Housing Recession Yields New Forms of Mortgage Fraud

If mortgage lenders didn’t have enough challenges on their hands trying to keep up with a rapidly changing regulatory environment, the ongoing housing recession and economic downturn have led to an increase in the volume – and variety – of mortgage fraud schemes. According to a new report from federal banking regulators on mortgage fraud – and what lenders are... Read More

Groups Want Clarification on Reverse Mortgage Guidance

Participants in the reverse mortgage lending market generally supported the Federal Financial Institution Examination Council’s proposed supervisory guidance governing reverse mortgage products, but some groups asked for clarification on what other financial products would be covered. Late last year, the FFIEC issued proposed guidelines for managing compliance and reputation risks... Read More

FTC Proposes Crackdown On Mortgage Relief Scams

The Federal Trade Commission recently proposed a new rule to protect distressed homeowners from mortgage relief scams by requiring mortgage relief providers to provide a guaranteed offer of loan modification before they can get paid. The rule would prohibit non-banks offering mortgage relief services from charging upfront fees. They can only collect after providing... Read More

Lender Must Hire Fair-Lending Consultant After FTC Settlement

A mortgage lender that previously settled discriminatory lending charges with the Federal Trade Commission must now hire a fair-lending consultant to make sure it is not illegally charging minorities more for mortgage loans. Gateway Funding Diversified Mortgage Services and its general partner, Gateway Funding Inc., were compelled to hire an outside consultant after failing to... Read More

National Licensing System Begins Background Checks

The Nationwide Mortgage Licensing System has begun running federal criminal background checks on individuals applying for a federal mortgage loan originator license to weed out the unscrupulous and the predators from the mortgage market. The background investigations on federal originator license applicants is in accordance with the federal Safe and Fair Enforcement for Mortgage... Read More

State Roundup

Georgia: State Sen. Bill Cowsert, R-46, introduced legislation that would grant the Georgia Bureau of Investigation jurisdiction over mortgage-related fraud... Illinois: Newly enacted legislation expands the Cook County predatory lending database program to include Kane, Peoria and Will Counties, which have foreclosure... Read More

Federal Roundup

Extended Comment Period for Implementation of SAFE Act: HUD extended until March 5 the comment period on its proposed rule implementing its responsibilities under the... Revised 2010 Call Reports: Member agencies of the FFIEC recently approved revisions to bank call reports filed in 2010. The FFIEC said the changes... Read More

Worth Noting …

Allonhill, an independent third party specializing in mortgage due diligence and credit risk management, recently announced a complete securitization solution for residential MBS issuers... Statebridge Co., a Denver-based provider of special mortgage loan servicing, has teamed up with American Legal & Financial Network to form a 50-state network of mortgage banking attorneys to... Read More

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