On February 10, 2015, the CFPB announced that it had entered a consent order with a Maryland-based nonbank mortgage lender to resolve allegations that the lender had engaged in deceptive advertising and an illegal kickback scheme. The CFPB alleged that the lender advertised VA mortgage products to veterans, claiming that…
On January 23, 2015, the California Department of Business Oversight (“CBO”) announced that it reached a settlement with a national mortgage lender over allegations that the lender failed to comply with state recordkeeping requirements to assess compliance with state mortgage lending laws. The CBO claims that the mortgage lender repeatedly…
On January 19, 2015, the New York Attorney General announced a settlement with a regional bank for possible discriminatory lending practices. The settlement was reached after the Attorney General investigated the bank for categorically excluding borrowers who lived in certain minority neighborhoods from obtaining loans, designating loans from minority areas…
The CFPB recently proposed additional amendments to its Mortgage Servicing Rules which, if implemented, would provide additional protections for mortgage borrowers facing default or foreclosure. These amendments, which the CFPB announced on November 20, 2014, are the latest in a series of revisions to the Rules (which we have discussed…
According to the CFPB, Franklin Loan Corporation paid its loan officers $730,000 in quarterly bonuses over 26 months – but the bonuses were allegedly based in part on the interest rates on loans, thus violating the Loan Originator Compensation Rule in Regulation Z. As a result, the CFPB entered into a…
The U.S. Supreme Court recently declined to review a debt collector’s appeal of the Third Circuit’s decision this summer that debtors were not required to dispute their debt under the Fair Debt Collection Practices Act (FDCPA) before filing suit. The Third Circuit decision reversed a district court’s dismissal of a class…
On October 22, the CFPB issued amendments to the Dodd-Frank Act mortgage rules that took effect in January 2014. The amendments include: ATR/QM Cure Provision: Under the Ability-to-Repay/Qualified Mortgage Rule, a mortgage loan must meet certain requirements to be considered a “qualified mortgage”. One such requirement is that the points and fees…
The Consumer Financial Protection Bureau (CFPB) has entered a consent order with a mortgage bank following CFPB’s allegations that the bank violated the new mortgage servicing rules. CFPB claimed that the bank: took an unreasonably long time to process borrowers’ applications for loan modifications or other foreclosure relief; failed to…
On August 27, 2014, the California Supreme Court granted a petition for review in which the Second Appellate District of the California Court of Appeals dismissed a mortgagor’s challenge to foreclosure proceedings, ruling that she had no standing to challenge assignment of her promissory note and the deed of trust…
Borrowers who rescind their loans pursuant to the Truth in Lending Act (TILA) must return to the creditor what they borrowed. But a July 16, 2014 ruling by the Court of Appeals for the Ninth Circuit in Merritt v. Countrywide Financial Corp. makes it more difficult for lenders to win…
On May 28, the U.S. Court of Appeals for the Seventh Circuit affirmed a decision requiring two borrowers who prevailed on their TILA rescission claims to tender the principal loan balance before the lender would release its security interest and return the borrowers’ prior loan payments. Iroanyah v. Bank of…
On April 28, 2014, the U.S. Supreme Court granted certiorari in an Eighth Circuit case which held that a borrower exercises and preserves her TILA rescission right by filing a lawsuit within three years of consummating the loan, not simply by providing written notice of rescission to the creditor in…
The future of the Government Sponsored Enterprises might be uncertain, but one aspect of their existence is becoming more clear: courts have repeatedly ruled that Fannie Mae and Freddie Mac are exempt from real property transfer taxes. And those decisions likely benefit servicers too. The cases deal with the exemptions…