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Inside the CFPB

May 3, 2010

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Major Lenders Eyed in Fair Lending Probe

The Department of Justice has targeted seven national lenders for alleged fair lending violations and is preparing a civil lawsuit against another lender for discriminatory practices based on marital status, according to a top agency official. Assistant Attorney General Thomas Perez, chief of the Civil Rights Division, did not identify the banks being... Read More

Debate Begins on Senate Regulatory Reform

The Senate last week began debate on financial services reform as Republicans floated a substitute bill that provides a glimpse of the depth and intensity of the legislative battle to come over the next two weeks or so. While the goals of regulatory reform are similar for both sides, Democrats and Republicans differ widely on how best to safeguard and protect consumers and... Read More

HAMP Servicers Under Review, Cash Incentives May be Withheld

The Department of the Treasury is cracking down on servicers participating in the Home Affordable Modification Program, threatening them with drastic disciplinary measures if they are not performing up to program standards. Discussing Treasury’s proposed Fiscal Year 2011 budget before the Senate Appropriations Subcommittee on Financial Services and General Government last week... Read More

FBI Scrutinizes Goldman Civil Case For Possible Criminal Prosecution

The Federal Bureau of Investigation is reportedly looking into the Goldman Sachs case to determine whether there is sufficient basis for a criminal fraud case against the Wall Street firm. The burden of proof in a criminal case is higher than in a civil case in that criminal allegations must be proven beyond reasonable doubt. In civil cases, such as the one... Read More

Freddie’s Anti-Fraud Unit Poorly Informed of GSE Policy on Flips

Whoever at Freddie Mac’s Fraud Investigation Unit authored an April 12 online opinion piece on short sales apparently is unaware of the company’s official policy on legitimate property flips or of FHA’s “no flip” rule, according to real estate attorneys. Although the guidance or advisory is not a formal policy, it warns about a growing trend in short payoff fraud and what... Read More

Requiring More Documentation for ‘Proof of Claim’ Too Burdensome

Mortgage lenders strongly urged the U.S. Judicial Conference’s rulemaking committee to withdraw proposed amendments to federal bankruptcy rules, warning of adverse consequences to the mortgage industry. In recent follow-up comments to the proposed change, the Mortgage Bankers Association, American Bankers Association and Financial Services Roundtable said the proposal... Read More

House Panel Extends NFIP, Allows States to Join Catastrophe Pools

The House Financial Services Committee last week passed several homeowner-related insurance bills, including legislation reauthorizing the National Flood Insurance program for up to five years and making catastrophe insurance affordable to homeowners. H.R. 5114, the Flood Insurance Reform Priorities Act, was approved by voice vote during markup on April 27... Read More

Fraud Detection Tool Comes with Insurance to Ease Lender Losses

Mortgage lenders have added new fraud detection technology with an insurance component to their arsenal to detect fraudulent loans in the application stage and to protect themselves from potential fraud-related losses. The new technology, LoanSafe Fraud Manager, has patented pattern-recognition capability that can discern a good loan from a potentially fraudulent one... Read More

State Roundup

North Carolina: The state Office of the Commissioner of Banks announced new rules to reduce and... Pennsylvania: The state Department of Banking recently announced enforcement actions against three... Hawaii: Gov. Linda Lingle signed into law S.B. 2910 on April 19, which provides that a foreclosing... Read More

Federal Roundup

FHA Reform Measure: On April 27, the committee approved H.R. 5072... Bill Preserving Rural Housing Program Passed: On April 20, the House Financial Services Committee unanimously... CRA Repeal. Legislation was introduced recently that would repeal the Community Reinvestment Act... Regulation C Hearings. Beginning in July, the Fed will hold four public hearings on potential... Read More

Worth Noting …

The Loan Modification Scam Prevention Network has embarked on a national campaign to fight loan mod... On April 14, Fannie Mae announced that borrowers who voluntarily transfer ownership of their homes... The number of counties electronically recording documents surpassed 500 during the month of April... The American Bankers Association will have its annual Regulatory Compliance Conference, June 13-16... Read More

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