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Inside the CFPB

March 14, 2011

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Brokers Sue to Stop LO Compensation Rule

Similar lawsuits seeking to stop the implementation and enforcement of the Federal Reserve’s final rule prohibiting certain payments to mortgage loan originators (MLO) have been filed in federal district court in Washington, DC. In recent filings, the National Association of Mortgage Brokers and the National Association of Independent Housing Professionals sought... Read More

No Agreement So Far on Settlement Amount

Discussion over the size of civil fines to be imposed on mortgage servicers continues in the wake of a draft term sheet of the settlement agreement proposed by state attorneys general that was floated last week. A spokesman for Iowa Attorney General Tom Miller said... Read More

Varying Pay Schemes Could Expose MLOs to Illegal Steering Charges

Having different compensation formulas with different wholesale lenders could expose an honest mortgage broker to charges of illegal steering under the Federal Reserve’s loan originator compensation rule taking effect April 1. The California Association of Mortgage Professionals warned... Read More

HUD Urged to Seek Remedies to Recover Losses on Ineligible Loans

The Department of Housing and Urban Develoment defended itself against criticism by its own internal watchdog by underscoring steps it has taken to strengthen its ability to target and review high-risk, federally insured mortgage loans. Responding to a recent negative evaluation by its Office of the Inspector General, HUD said... Read More

Groups Ask Fed to Give Lenders Choice in Complying with MDIA

A coalition of mortgage lenders and homebuilders has asked the Federal Reserve Board to make compliance with two interim rules implementing the Mortgage Disclosure Improvement Act optional. The rules are intended to clarify previously issued regulations requiring mortgage lenders to disclose... Read More

Lender to Appeal $3.7 Million WV Award, Call for Federal Probe

Claiming it was the victim of unconscionable misconduct, Quicken Loans said it will appeal a West Virginia judge’s decision to award $3.7 million to a mortgage borrower allegedly victimized by the company’s unfair and deceptive lending practices. The settlement was so preposterous to Quicken Loans that it also plans... Read More

Fed’s LO Compensation Rule

CAMP Best Practices for Wholesale Lender and Broker Agreements
  • Encourage specific pre-agreements. Wholesale lending partners should work out specific agreements for compensation on a broker-by-broker basis. Agreements should be revisited quarterly or semi-annually.
  • Use base rate sheets. If wholesale partners continue... Read More

    • State Roundup

    Arizona. The state Senate has passed S.B. 1259, which would require lenders to produce the full chain of title or risk the foreclosure sale being voided. The GOP-sponsored bill passed by a vote of 28-2 and is now being considered in the state House. The purpose of the bill is to require... Read More

    Federal Roundup

    Federal ReserveLO Compensation Webinar. The Fed will host a webinar on March 17 to answer questions and provide an update on the controversial loan officer compensation rule, which takes effect April 1. Securities and Exchange Commission Mortgage Firm, Top Executive Charged... Read More

    Worth Noting

  • Private mortgage insurer Essent Guaranty has announced an enhancement to its master policy for mortgage insurance that would help reduce lender exposure to rescission and unpaid MI claims. Dubbed “Clarity of Coverage,” the enhancement is a written assurance added to the master policy that MI coverage will not be... Read More

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