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Inside the CFPB

October 4, 2010

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Varying Pay Scales May Raise RESPA Issue

Different loan compensation levels among loan originators aimed at retaining top loan producers could lead to internal strife and potentially raise Real Estate Settlement Procedures Act issues if brokers are paid differently, a compliance attorney warned. Mortgage companies should not forget about... Read More

FTC Proposes to Bar Deceptive Mortgage Ads

Non-bank and state-regulated financial service providers may have to scrutinize the accuracy of their future mortgage advertising or pay dearly under tough rules proposed by the Federal Trade Commission. The proposed rule would prohibit misrepresentations in advertising for all mortgage loans and would allow the FTC and states to seek... Read More

Servicers Directed to Correct Flawed Foreclosure Systems

The nation’s top mortgage lenders and mortgage servicers have been ordered by their primary overseers to review their foreclosure processes following reports of potential defects in affidavits used in judicial foreclosure proceedings. John Walsh, acting director of the Office of the Comptroller of the Currency, told the Senate Committee on Banking, Housing and Urban Affairs last week that he has... Read More

Change in HMDA Reporting Rules Skews Pricing Data, Analysts Say

Users of the 2009 Home Mortgage Disclosure Act data should be more discerning and not too quick on drawing any conclusions about pricing disparities between white and minority borrowers because the reporting rules for loan pricing have changed, Federal Reserve Board analysts warned. The steepening yield curve and the shift to new... [Includes one data chart] Read More

DOJ, Regulators Welcome DFA Expansion of HMDA Reporting

While the Home Mortgage Disclosure Act has been a valuable tool for fair lending analysis and enforcement, the reported data have never been sufficient to really determine whether illegal discrimination is behind lending and pricing disparities, according to federal regulators. Testifying during the last of a series of... Read More

Final RESPA-TILA Rule Expected Soon After Powers Shift to BCFP

The Obama administration is expecting to see most of the work to integrate Real Estate Settlement Procedures Act and Truth in Lending Act mortgage disclosures done before July 21, 2011, so that a new final rule can be promulgated after that date, according to industry sources. Emerging from a recent meeting with... Read More

MBA Asks FTC to Clarify Proposed FCRA Disclosure Requirements

The mortgage banking industry has asked the Federal Trade Commission to clarify or change certain proposed disclosure requirements under the Fair Credit Reporting Act to avoid unnecessary litigation between consumers and lenders. The proposed FTC rule would amend the FCRA’s current disclosure requirements to help consumers fix errors in their... Read More

Sub-Lien Payments to Allow Short Sale Must be Reported on HUD-1

All subordinate-lien release payments to facilitate a short-sale transaction must be disclosed on the HUD-1 closing statement, according to the Department of Housing and Urban Development’s latest guidance on the Real Estate Settlement Procedures Act. Payments made in connection with a RESPA-covered transaction should appear on... Read More

NFIP Avoids Another Lapse as Obama Signs One-Year Extension

The National Flood Insurance Program avoided another shutdown after President Obama signed extending legislation Sept. 29, hours before midnight when the program was slated to expire. The bipartisan extension bill, S. 3814, extends the NFIP until Sept. 30, 2011. Congress has allowed the program to... Read More

State Roundup

Michigan. On Sept. 28, the state Office of Financial and Insurance Regulation published a notice reminding brokers, lenders, servicers and loan originators that the OFIR will begin enforcing the loan originator licensing requirements under state law starting Oct. 15. After that date, any individual originating loans without the required license or anyone employing an unlicensed loan originator could be subject to enforcement or civil penalties up to $25,000. All loan originators, servicers, mortgage lenders and… Read More

Federal Roundup

On Sept. 27, the FDIC approved a final rule that extends the safe harbor protection for securitization and participation through Dec. 31, 2010. Under the safe harbor, all securitizations and participations in process before the end of 2010 are permanently grandfathered. The safe harbor protects... Read More

Worth Noting

Fannie Mae is working with the Federal Housing Finance Agency to develop and adopt appraiser independence rules that will replace the Home Valuation Code of Conduct. Until the revised requirements are released, the existing HVCC provisions in Fannie’s Selling Guide continue to apply. Updated requirements are expected to be... Read More

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