Archive:November 2013

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K&L Gates Legal Insight: A Decision to Arbitrate in the Mountain State: The West Virginia Supreme Court of Appeals Rejects Retroactive Application of the Dodd-Frank Act and Enforces Mandatory Arbitration Agreement in Residential Mortgage
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K&L Gates Legal Insight: NIST Unveils Preliminary Cybersecurity Framework
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The CFPB Signals Revolutionary Changes to the Collection Industry
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RESPA/TILA Combined Mortgage Disclosure Forms Remain Largely Unchanged
5
2014 U.S. Congressional Calendar
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What’s Old is New: CFPB Claims Captive Reinsurance Arrangements Violate RESPA
7
HUD Issues Self-Reporting Guidance
8
Proposed Castle & Cook Settlement on Alleged Loan Originator Compensation Violations
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K&L Gates Partner Laurence E. Platt Testifies before the Committee on Senate Banking, Housing, and Urban Affairs
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2014 U.S. News-Best Lawyers® Rankings

K&L Gates Legal Insight: A Decision to Arbitrate in the Mountain State: The West Virginia Supreme Court of Appeals Rejects Retroactive Application of the Dodd-Frank Act and Enforces Mandatory Arbitration Agreement in Residential Mortgage

By: R. Bruce Allensworth, Brian M. Forbes, Robert W. Sparkes, III

The West Virginia Supreme Court of Appeals recently issued a decision addressing mandatory arbitration in connection with a residential mortgage loan that will impact litigants in the Mountain State and potentially influence cases beyond its borders. In a putative class action entitled State of West Virginia ex rel. Ocwen Loan Servicing, LLC v. The Honorable Carrie Webster, Judge of the Circuit Court of Kanawha County, West Virginia; Robert L. Curry and Tina M. Curry, Individually and on behalf of a Similarly Situated Class (“Curry”), the Court considered whether the federal Dodd-Frank Act’s prohibition of mandatory arbitration agreements in residential mortgage loans could be applied retroactively to an arbitration agreement entered into almost four years before the Dodd-Frank Act was enacted. The few courts that had previously addressed the retroactivity of related arbitration prohibitions contained in the Dodd-Frank Act had reached conflicting outcomes. Addressing the issue head on, the highest appellate court in the state of West Virginia has now stated its view that the Dodd-Frank Act’s arbitration prohibition does not apply to a residential mortgage executed prior to its enactment. The Court then found the arbitration agreement at issue, and the class action wavier included therein, valid and enforceable under West Virginia state law.

To read the full alert, click here.

 

K&L Gates Legal Insight: NIST Unveils Preliminary Cybersecurity Framework

By: Roberta D. Anderson, Bruce J. Heiman, David A. Bateman

On October 22nd, the National Institute of Standards and Technology (NIST) released its long-anticipated Preliminary Cybersecurity Framework for public review and comment. The Cybersecurity Framework was issued in accordance with President Obama’s February 19th Executive Order 13636, Improving Critical Infrastructure Cybersecurity, which tasked NIST with developing a Cybersecurity Framework “to reduce cyber risks to critical infrastructure.” At a very high level, as its name indicates, the Cybersecurity Framework provides a framework for organizations to achieve a grasp on their current cybersecurity risk profile and risk management practices, to identify gaps that should be addressed in order to progress towards a desired “target” state of cybersecurity risk management, and to internally and externally communicate efficiently about cybersecurity and risk management.

Although applying to organizations in critical infrastructure, the Cybersecurity Framework may be used by any organization as part of its effort to assess cybersecurity practices and manage cybersecurity risk. This Alert discusses the Cybersecurity Framework’s risk-based three-part approach, Framework implementation, and incentives.

To read the full alert, click here.

The CFPB Signals Revolutionary Changes to the Collection Industry

By: Nanci L. Weissgold, Christopher G. Smith

For Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) followers, the Bureau’s advanced notice of proposed Regulation F seeking comment on potential rules under the Fair Debt Collection Practices Act (“FDCPA”) should come as no surprise. The breadth of the planned rulemaking, however, could fundamentally change how third-party debt collectors, first-party creditors collecting consumer debts, debt buyers, and vendors providing material assistance to collectors (such as payment system or technology providers) collect mortgage, credit card, student loan, auto, medical, and other consumer debt.

To read the full alert, click here.

 

RESPA/TILA Combined Mortgage Disclosure Forms Remain Largely Unchanged

The wait is over. The anxiety begins. On Wednesday, November 20, 2012, the CFPB released its final regulations requiring combined mortgage disclosure forms under the Real Estate Settlement Procedures Act and the Truth in Lending Act. With an effective date of August 1, 2015, mortgage companies and settlement companies have 20 months to implement new Loan Estimate and Closing Disclosure forms that will forever replace the GFE, initial and final TIL statements, and HUD-1. Read More

2014 U.S. Congressional Calendar

The K&L Gates Public Policy and Law group is pleased to provide you with the 2014 U.S. Congressional Calendar.

This calendar is a one-page compilation of the House and Senate draft schedules in a color-coded format showing periods when the House and Senate are expected to be in session next year. The calendar is a planning tool to help those who interact with the Congress.

Please click here to download the Congressional Calendar.

What’s Old is New: CFPB Claims Captive Reinsurance Arrangements Violate RESPA

By: Phillip L. Schulman, Andrew L. Caplan

Last week, the CFPB announced the filing of a complaint and proposed consent order with a North Carolina-based private mortgage insurer, Republic Mortgage Insurance Corporation (“RMIC”), which echoes previous enforcement positions taken years ago by HUD and state regulators. In this most recent enforcement action, the CFPB alleges that RMIC violated Section 8 of RESPA (the “anti-kickback” provision) through participation in captive reinsurance programs with mortgage lenders. These business arrangements are once again under scrutiny in 2013, as last week’s complaint and proposed consent order with RMIC marks the fifth such enforcement action this year. Read More

HUD Issues Self-Reporting Guidance

By: Krista Cooley

Last Thursday, HUD issued Mortgagee Letter 2013-41 to clarify its self-reporting requirements for FHA-approved lenders. The Mortgagee Letter updates HUD’s prior guidance regarding an FHA-approved lender’s obligation to self-report instances of fraud, material misrepresentations, and material findings identified in connection with the origination, underwriting, or servicing of FHA-insured loans. New guidance set forth in this Mortgagee Letter includes direction on the timeframes to which lenders must adhere in reporting findings to senior management and to HUD, as well as clarification regarding what constitutes a “mitigated” finding in connection with the self-reporting requirements. Read More

Proposed Castle & Cook Settlement on Alleged Loan Originator Compensation Violations

By: Kristie D. Kully

The Consumer Financial Protection Bureau has proposed a settlement with Castle & Cook Mortgage and two of its officers. The CFPB brought an action against Castle & Cook and those officers, alleging that they violated the prohibition against loan-term based compensation under the Dodd-Frank Act and its regulations. On November 7, 2013, the parties to the action proposed a settlement to the federal court in Utah for the payment by the company and the officers of over $9 million for redress to affected consumers, plus a $4 million civil money penalty. The company and officers would also be permanently enjoined from paying compensation to a loan originator in violation of the applicable regulations, and would have to retain evidence of their compliance. According to the proposed settlement, although it would resolve the issue with the CFPB, consumers’ rights to seek redress on their own behalf against the company and/or the officers would not be limited. Read More

K&L Gates Partner Laurence E. Platt Testifies before the Committee on Senate Banking, Housing, and Urban Affairs

By: Laurence E. Platt

Larry Platt testified at a hearing held by the Senate Banking Committee on Tuesday, October 29, considering standards for mortgage loan servicers, particularly in connection with loss mitigation activities. The hearing was one of several designed to examine housing finance reform and the essentials of a functioning housing finance system in the Committee’s continuing deliberations over the fate of Fannie Mae and Freddie Mac and other provisions in the proposed Housing Finance Reform and Taxpayer Protection Act of 2013. Read More

2014 U.S. News-Best Lawyers® Rankings

For a fourth consecutive year, K&L Gates has been ranked among the top two law firms with the most first-tier rankings in the annual U.S. News-Best Lawyers® “Best Law Firms” survey. Earning more than 200 first-tier rankings in offices and practices across the United States, K&L Gates also received the publication’s national “Law Firm of the Year” distinction, given to only one firm in each national practice area, for Securities Regulation and for Criminal Defense: White Collar. Read More

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