On April 10, the Federal Trade Commission (FTC) announced that the U.S. District Court for the Central District of California had issued a temporary restraining order against a company offering mortgage-relief services to borrowers in financial trouble. The FTC’s complaint, filed on March 31, alleged that the company violated Section 5(a)…
On April 9, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced a settlement with a California-based mortgage lender over claims that the lender engaged in deceptive advertising practices. The company allegedly mailed advertisements bearing the logos of the Department of Veterans Affairs and the Federal Housing Administration, ostensibly to give…
On March 3, 2015 CFPB Director Richard Cordray appeared before the House Committee on Financial Services to deliver testimony regarding the Bureau’s work. Director Cordray spent much of his semiannual address touting the Bureau’s efforts in the mortgage space. In his written statement, Director Cordray commented on the Bureau’s Qualified…
On March 12, 2015, the Massachusetts Division of Banks entered into a consent order with a mortgage lender following a state investigation that determined that the mortgage lender was in substantial non-compliance with applicable state and federal statutes, rules, and regulations regarding its mortgage lending and determination and documentation of…
On February 25, the Department of Justice (DOJ) announced that it had reached a settlement with MetLife Home Loans LLC concerning its investigation into MetLife’s origination and underwriting practices of loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA loans). As part of…
On March 3, 2015, the Department of Justice (“DOJ”) announced a settlement with a national bank over allegations that the bank signed payment change notices in bankruptcy court without reviewing the accuracy of the documents and submitted inaccurate escrow statements. The U.S. Trustee initiated the investigation after the bank allegedly…
On February 27, 2015, the Massachusetts Division of Banks and the mortgage lender agreed to a consent order following an examination into a mortgage lender’s level of compliance with applicable Massachusetts and federal statutes. The Massachusetts Division of Banks’ examination found that the bank was in substantial non-compliance with state…
On February 12, 2015, the CFPB announced that it had entered a consent order with a California-based mortgage lender and broker to resolve allegations that the lender allegedly sent deceptive mailings signifying an FHA and VA affiliation in violation of Regulation N and the Consumer Financial Protection Act. The lender…
On February 12, 2015, the CFPB announced that it had entered into a consent order with a Utah-based mortgage broker and lender to resolve allegations that the lender sent deceptive mailings to VA homeowners in violation of Regulation N and the Consumer Financial Protection Act. The lender allegedly sent mailings…
On February 12, 2015, the CFPB announced that it had filed a complaint in the U.S. District Court for the District of Maryland alleging that a Maryland-based reverse mortgage lender and broker disseminated deceptive and misleading advertisements for mortgage credit products, thereby violating the Mortgage Acts and Practice Rule, 12…
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…