By Kris D. Kully The Consumer Financial Protection Bureau (CFPB) is considering putting strict limits on a creditor’s ability to price its mortgage loans, and on a consumer’s ability to choose among pricing options. By way of implementing the far-reaching provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is proposing… Continue Reading
Category Archives: Mortgage Lending
Subscribe to Mortgage Lending RSS FeedCFPB Issues First “Bulletin” Regarding TILA’s Loan Originator Compensation Rule
Posted in Bureau of Consumer Financial Protection (CFPB), Mortgage LendingThe CFPB issued its first pronouncement—which it refers to as a Bulletin—regarding the Truth in Lending Act’s (“TILA”) loan originator compensation rule (the “LO Comp Rule”).
New SAFE Act Examination Guidelines for State Regulated Entities: Spring Cleaning May Be Required
Posted in Mortgage LendingThe Multistate Mortgage Committee’s (“MMC”) new SAFE Act Examination Guidelines (“SEGs” or “Guidelines”) leave little doubt that nondepository institutions should expect more detailed and intrusive examinations of their mortgage loan originator (“MLO”) hires and policies by state regulators.
CFPB Plans Small Business Review Panel for Combined RESPA and TILA Disclosures and Hints at Possible Regulatory Changes
Posted in Bureau of Consumer Financial Protection (CFPB), Mortgage LendingIf you are on the edge of your seat waiting for the combined RESPA/TILA proposed regulations and disclosure forms, we have our first glimpse into the changes being contemplated by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).
FinCEN Extends Anti-Money Laundering Program and Suspicious Activity Reporting Requirements to Non-Bank Residential Mortgage Lenders and Originators
Posted in Mortgage Lending, Mortgage ServicingBy: András P. Teleki, Kathryn S. Williams
Residential mortgage lenders and originators (RMLOs — known as “mortgage companies” and “mortgage brokers” but not individual loan originators) now are subject to the Bank Secrecy Act’s (BSA) anti-money laundering regime pursuant to a long expected new regulation published in the Federal Register on February 14, 2012 by FinCEN, a part of Treasury that implements the U.S.’s anti-money laundering regime.
Freeman v. Quicken Loans to Decide Whether Undivided Unearned Fees Violate RESPA
Posted in Bureau of Consumer Financial Protection (CFPB), Litigation & Enforcement Actions, Mortgage LendingTo split an unearned fee or not to split an unearned fee in order to violate the Real Estate Settlement Procedures Act (RESPA) – that is the question.
Supreme Court Case on Disparate Impact Voluntarily Dismissed – Parties in Magner v. Gallagher Say Never Mind
Posted in Fair Lending/Anti-Discrimination, Mortgage Lending, Other Federal Agencies & GSEsIn a rare and unexpected move, the City of St. Paul last Friday agreed to dismiss its appeal to the U.S. Supreme Court challenging whether a violation under the Fair Housing Act may be proved under a disparate impact legal theory, or whether proof of intentional discrimination is required.
Mortgage Industry Submits Comments on HUD’s Proposed Disparate-Impact Rule under the Fair Housing Act
Posted in Fair Lending/Anti-Discrimination, Mortgage Lending, Other Federal Agencies & GSEsBy: Paul F. Hancock, Andrew C. Glass, Melanie Hibbs Brody, Roger L. Smerage, Melissa S. Malpass, Gregory N. Blase
On January 17, 2012, K&L Gates LLP submitted the comments of six financial services trade associations to the United States Department of Housing and Urban Development (HUD) on the proposed rule to implement a disparate-impact legal standard under the Fair Housing Act.
Freddie Mac’s Refinancing Policy
Posted in Mortgage Lending, Other Federal Agencies & GSEsBy: Kerri M. Smith
NPR and ProPublica charged Freddie Mac with investing in securities that would lose value if homeowners refinanced their mortgages.
No More Mister Nice Guy: Indemnification Now Required by FHA Lender Insurance Regulations
Posted in FHA/VA, Mortgage LendingBy: Phillip L. Schulman, Krista Cooley, Holly Spencer Bunting
FHA mortgagees participating in the Lender Insurance (“LI”) program will be required to indemnify HUD for self-endorsed loans that HUD deems ineligible for FHA insurance based on a final regulation published by the U.S. Department of Housing and Urban Development (“HUD” or “Department”) on January 25, 2012.
FHA’s Lender Insurance Program Will Soon Cost Lenders More Money
Posted in FHA/VA, Mortgage LendingBy: Krista Cooley, Phillip L. Schulman, Holly Spencer Bunting
FHA mortgagees participating in the Lender Insurance (“LI”) program will be required to indemnify HUD for self-endorsed loans that HUD deems ineligible for FHA insurance based on a final regulation to be published by HUD on January 25, 2012.
CFPB Releases “Mortgage Origination Examination Procedures” Governing Banks and Nonbanks – Not a Prelude to a Kiss
Posted in Bureau of Consumer Financial Protection (CFPB), Fair Lending/Anti-Discrimination, Mortgage Lending, Other Federal Agencies & GSEs, Privacy & Information Security, UDAAPThe CFPB wants to get to know you – well. But it’s not a prelude to a kiss.
On January 12, 2012, the CFPB released its new Mortgage Origination Examination Procedures Governing Banks and Nonbanks (the “Procedures”).
MERS and Foreclosure Law in Massachusetts: Culhane v. Aurora Loan Services
Posted in Litigation & Enforcement Actions, Mortgage Lending, Mortgage ServicingBy: Andrew C. Glass, Gregory N. Blase, Roger L. Smerage
A Massachusetts federal court recently confirmed MERS’s ability to assign mortgages under Massachusetts law and approved MERS’s practices in doing so.
In Culhane v. Aurora Loan Services, — F. Supp. 2d —-, 2011 WL 5925525 (D. Mass. Nov. 28, 2011), a borrower sued her loan servicer to prevent foreclosure.
GSE Loan Repurchase Policies Impede Economic Recovery
Posted in Mortgage Lending, Mortgage Servicing, Other Federal Agencies & GSEsThe loan repurchase policies of Fannie Mae and Freddie Mac are one of the factors that have exacerbated the U.S. housing crisis and impeded economic recovery, according to two recent releases by notable federal government actors.
Are Valuation Review Standards on the Federal Banking Agencies’ Radar?
Posted in Appraisals, Mortgage LendingBy: Nanci L. Weissgold and Kerri M. Smith
Mandated by the Dodd-Frank Act, lenders and appraisal management companies (known as AMCs) are awaiting a series of joint rules addressing appraisal issues. While rules addressing pre-funding reviews of appraisals or evaluations is not a topic specifically required by the January 21, 2013 deadline, the FDIC’s Winter 2011 issue of Supervisory Insights hints that it may be addressed in the joint rule establishing minimum requirements for AMCs’ state registration.
Supreme Court Brief Filed on Behalf of Mortgage Lenders
Posted in Mortgage LendingBy: Paul F. Hancock, Andrew C. Glass, Melanie Hibbs Brody, Melissa S. Malpass, Gregory N. Blase
On December 29, 2011, K&L Gates filed a brief as amici curiae before the United States Supreme Court in Magner v. Gallagher, a case in which the Court will consider whether the disparate impact theory of discrimination is cognizable under the Fair Housing Act or whether plaintiffs must instead prove intentional discrimination.
CFPB Puts Inherited Consumer Financial Protection Regulations on the Table
Posted in Bureau of Consumer Financial Protection (CFPB), Credit Cards, Fair Lending/Anti-Discrimination, Mortgage Lending, Mortgage Servicing, Payment Systems, Privacy & Information SecurityBy: David A. Tallman
Adding to its already full plate, the Bureau of Consumer Financial Protection (the “CFPB” or the “Bureau”) recently requested public comment on its review of the various consumer financial protection regulations it has inherited from other agencies.
Customary and Reasonable Appraisal Rates Rule Faces State Opposition
Posted in Appraisals, Mortgage LendingBy: Nanci L. Weissgold and Kerri M. Smith
It is old news that the Dodd-Frank Act sets standards for pricing appraisals and subjects appraisal management companies, known as AMCs, to federal and state oversight. The news for 2012 is that lenders may need to contend with alternate state law requirements addressing the payment of fee appraisers, some of which may be inconsistent with federal law.
CFPB Now Accepting Mortgage Complaints from Consumers
Posted in Bureau of Consumer Financial Protection (CFPB), Mortgage Lending, Mortgage ServicingOn December 1, 2011, the Consumer Financial Protection Bureau began accepting mortgage complaints from consumers through the agency’s home page. This development follows the Bureau’s October announcement that it would be expanding the coverage of its consumer complaint portal to include products such as mortgages and student loans.
CSBS/AARMR Order Up State Loan Originator Compensation Examination Guidelines – But Go Easy On The Guidance!
Posted in Mortgage LendingBy: Kris D. Kully
The CSBS/AARMR Multistate Mortgage Committee (MMC) released a set of examiner guidelines to assist state regulators in implementing the Federal Reserve Boards loan originator compensation restrictions.