Category: Mortgage Servicing

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Financial Institutions & Services Litigation Group Highlights Key Legal Issues at MBA Conference
2
Securitization developments for Alternative Finance
3
Leave the “Tow Truck Guy” Alone: The Ninth Circuit Rules Foreclosure of a Deed of Trust Is Not Debt Collection
4
Webinar: Developments in Student Loan Servicing with Lessons Learned from Mortgage Servicing
5
LIGHT READING FOR THE DOG DAYS OF SUMMER: CFPB FINALIZES AMENDMENTS TO MORTGAGE SERVICING REGULATIONS
6
It’s Time For An Upgrade — Outdated Technology Puts Mortgages Servicers At Risk For Increased CFPB Scrutiny and Potential Servicing Violations
7
More To Know About “Know Before You Owe”: CFPB Acknowledges TRID Challenges and Announces July 2016 Notice of Proposed Rulemaking
8
Mortgage Lenders, Holders, and Servicers Beware: Massachusetts High Court Endorses Condominium Association’s Super Lien Practice
9
Webinar: The Mortgage Lifecycle: Litigation Hotspots From Origination Through Foreclosure
10
Will Assignee Liability Increase as FTC Seeks Comments on the Holder Rule?

Financial Institutions & Services Litigation Group Highlights Key Legal Issues at MBA Conference

Members of the K&L Gates Financial Institutions & Services Litigation Group will speak on key topics at the upcoming the MBA’s Legal Issues and Regulatory Compliance Conference in Miami, FL (May 7-10).

Olivia Kelman will review the Home Mortgage Disclosure Act (HMDA) as well as other lending-related requirements of the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) on Sunday afternoon (May 7).

Andrew C. Glass will address major litigation and enforcement trends, including cases heard or pending before the Supreme Court and other federal courts on Monday afternoon (May 8).

Paul F. Hancock will discuss fair lending issues affecting business models and practices, a topic of particular interest with the entrance of a new administration, on Monday afternoon (May 8). Paul also will facilitate a fair lending roundtable discussion later that same afternoon.

In addition, many of our group’s attorneys are attending the conference. We look forward to seeing you all in Miami!

Securitization developments for Alternative Finance

K&L Gates partner Anthony Nolan will be speaking on “Securitization in Alternative Lending” at the Marketplace Lending & Alternative Financing Summit 2016 in Dana Point, California, on December 5th. This session will bring together participants with various perspectives, including investment bankers, platform representatives and service providers, in addition to Nolan’s viewpoint as a U.S. securitization and fintech lawyer. They will address recent commercial and regulatory developments that may affect the securitization of online and marketplace loans which include the impact of risk retention, which becomes effective on December 24, the implications of rating agency reform, emerging standards for asset-level representations and warranties, and the prospects for reform or rollback of Dodd-Frank consumer financial services regulation following President Trump’s inauguration in January.

The Marketplace Lending & Alternative Financing Summit is an educational forum for financial services professionals to delve into industry topics and trends to maximize returns and reduce risk in the growing field of marketplace lending. It brings together some of the thought leaders and market movers within the marketplace lending & alternative financing industry. Topics will include legal, tax and structural considerations, rating agency methodology, and information and tools for attendees to keep up with this dynamic industry. To see the agenda for the conference, please click here.

Leave the “Tow Truck Guy” Alone: The Ninth Circuit Rules Foreclosure of a Deed of Trust Is Not Debt Collection

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Joshua Butera

The Ninth Circuit recently clarified when a trustee of a deed of trust acts as a debt collector under the Fair Debt Collection Practices Act (“FDCPA”). In a break from other courts of appeal, the Ninth Circuit held that when a trustee carries out the contractual and statutory requirements for foreclosing property subject to the deed of trust, the trustee does not act as a debt collector. The Ninth Circuit reasoned that in so acting, the trustee does not seek to collect monetary debt from the debtor. In so holding, the court broke with other courts of appeals.

To read the full alert, click here.

Webinar: Developments in Student Loan Servicing with Lessons Learned from Mortgage Servicing

Please join us for a webinar on student loan servicing covering a wide range of developments in regulatory, enforcement and litigation as well as the practical application of lessons learned in parallel servicing industries.

Panelists:
David E. Fialkow, Partner, K&L Gates
Hollee M. Watson, Associate, K&L Gates

To register, click here. Log-in instructions will be sent via email the day before the webinar. You must register to receive the log-in instructions.

LIGHT READING FOR THE DOG DAYS OF SUMMER: CFPB FINALIZES AMENDMENTS TO MORTGAGE SERVICING REGULATIONS

By Brian M. Forbes, Andrew C. Glass, Gregory N. Blase, Robert W. Sparkes III and Matthew N. Lowe

On August 4, 2016, the Consumer Financial Protection Bureau (“CFPB”) issued its final rule setting forth amendments and clarifications to mortgage servicing regulations. These changes follow a prior round of revisions to mortgage servicing regulations that went into effect in January 2014. Since proposing the amendments to the regulations in November 2014, the CFPB received and reviewed hundreds of comments. At just over 900 pages in length, the final rule addresses numerous areas of mortgage servicing, including the following:

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It’s Time For An Upgrade — Outdated Technology Puts Mortgages Servicers At Risk For Increased CFPB Scrutiny and Potential Servicing Violations

By Brian M. Forbes, Soyong Cho, and Hollee M. Watson

More than two years have passed since the Consumer Financial Protection Bureau (“CFPB”) implemented comprehensive amendments to the loan servicing provisions of Regulation X. Mortgage servicers have had to invest in technology and human capital to keep up with new regulatory requirements while saddled with expanded duties to respond to borrower inquires, disputes, and requests for information, in addition to new and extensive loss mitigation requirements. Outdated technology has put servicers at risk for increased enforcement and litigation issues. But, as the CFPB has noted, the problems are not “insurmountable.”

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More To Know About “Know Before You Owe”: CFPB Acknowledges TRID Challenges and Announces July 2016 Notice of Proposed Rulemaking

By Jennifer Janeira Nagle and Hollee Watson

The TILA-RESPA Integrated Disclosure rule (“TRID”) went into effect on October 3, 2015, and has posed significant implementation challenges industry-wide. Those challenges have been articulated to the Consumer Financial Protection Bureau (“CFPB”) by industry participants, trade groups, and congressional leaders alike. In response, the CFPB has issued guidance in the form of letters, webinars, educational videos, guides, and factsheets. Notwithstanding this informal guidance, and despite the CFPB’s assurances that its initial compliance examinations would be “diagnostic and corrective, not punitive,” see December 29, 2015 Letter from CFPB Director Richard Cordray to the Mortgage Bankers Association, the mortgage industry continues to experience uncertainty and risk in its efforts to implement TRID’s sweeping changes to TILA and RESPA. See January 29, 2016 Mortgage Industry Trade Group Letter to CFPB; March 11, 2016 Sen. Bob Corker Letter to CFPB.

In the wake of pressure for more formal guidance, the CFPB recently announced that it will issue a Notice of Proposed Rulemaking (“NPRM”) on TRID in late July. In an April 28, 2016 letter to mortgage industry trade groups, Director Richard Cordray acknowledged that “the implementation of the Know Before You Owe rule poses many operational challenges” and that “there are places in the regulation text and commentary where adjustments would be useful for greater certainty and clarity.”

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Mortgage Lenders, Holders, and Servicers Beware: Massachusetts High Court Endorses Condominium Association’s Super Lien Practice

By Sean R. Higgins, Morgan T. Nickerson and Joshua Butera

In a decision that should be read as a warning to mortgage industry participants doing business in the Commonwealth of Massachusetts, the state’s high court has validated a condominium associations’ so-called “rolling” priority lien practice, placing prior-recorded first mortgages at risk. In Drummer Boy Homes Association, Inc. v. Britton, SJC-11969 (Mass. Mar. 29, 2016), the Massachusetts Supreme Judicial Court (SJC) held that there is no limit to the number of priority liens available to condominium associations and/or community associations for unpaid common expenses, ignoring the rights of first mortgage holders. Prior to Drummer Boy, Massachusetts courts had largely held that condominium associations were limited to a single priority lien for six months of unpaid common expenses. The SJC broke with prior decisions and held that a condominium association can enforce multiple priority liens for successive six-month periods based upon language added to the Massachusetts Condominium Act, General Laws, Chapter 183A (“Chapter 183A”) in 1998. In short, following Drummer Boy, any prior-recorded first mortgages may become junior to unlimited condominium association liens for unpaid common expenses.

To read the full alert, click here.

Webinar: The Mortgage Lifecycle: Litigation Hotspots From Origination Through Foreclosure

Please join a group of our seasoned Financial Institutions and Services Litigation attorneys for a webinar addressing hot litigation topics concerning residential mortgages. We will begin with loan origination, navigate through loan servicing, and end with foreclosure and loan termination. Along the way, we will touch upon litigation arising from various consumer protection statutes, as well as notable common law claims. The webinar will wrap up with our thoughts on anticipated litigation trends and time for Q&A.

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Will Assignee Liability Increase as FTC Seeks Comments on the Holder Rule?

The “Adam’s Rib” of assignee liability ̶ the “Holder Rule” issued by the Federal Trade Commission (“FTC”) in 1976 ̶ is up for review. Imposing liability on innocent purchasers of consumer credit loans for the legal violations of the originating creditors has long been a controversial issue in the capital markets. The FTC is seeking public input as it reviews the Trade Regulation Rule Concerning Preservation of Consumers’ Claims and Defenses, commonly known as the Holder Rule. Although the Rule has not garnered significant attention over its 40-year existence, industry members should consider commenting by the February 12 deadline. Changes to the Holder Rule, including the scope and types of claims and defenses that can be asserted against a holder, could have a material impact on the market. The Consumer Financial Protection Bureau can also enforce the Holder Rule against covered institutions.

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