Last year, on January 10, 2014, extensive amendments by the Consumer Financial Protection Bureau Regulation X, which implements the Real Estate Settlement Procedures Act (“RESPA”) and Regulation Z, which implements the Truth in Lending Act (“TILA”), went into effect. Among the numerous new requirements imposed upon mortgage lenders and servicers were significant changes to written
FTC Issues Follow-Up Study on Credit Reporting Accuracy
The Federal Trade Commission has issued a follow-up study of credit report accuracy (the “Follow-Up Study”) that found most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate.
The congressionally-mandated study is the sixth
Supreme Court Clarifies Borrowers’ Right to Rescind Under TILA
In a major, unanimous decision on the Truth in Lending Act, the Supreme Court resolved a circuit split and clarified borrowers’ rescission rights under TILA, potentially making rescission of a loan transaction easier for borrowers. Under TILA, the time period governing the right to rescind a loan transaction depends on whether all required disclosures have
Rescue Scammers Stall Foreclosures by Filing False Documents to Cloud Title
In recent years, the industry has seen various types of foreclosure rescue fraud perpetrated against borrowers, lenders, and servicers. One example is a California-based scam that caused losses of more than $2.5 million whereby the scam’s orchestrators recorded fraudulent documents in local courthouses in an effort to “cloud title” and halt or stall the foreclosure
FHFA Issues Advisory Bulletin to Improve Fannie and Freddie Oversight of Non-Bank Mortgage Servicers
We have previously reported on the Federal Housing Finance Agency’s concern that the recent explosive growth of nonbank specialty mortgage servicers may pose operational and liquidity risks to such servicers and put in jeopardy Fannie Mae and Freddie Mac (collectively, the Enterprises) that guarantee these mortgages. In particular, FHFA concluded that the nonbank servicers’ use
U.S. Supreme Court Vindicates Broad Jurisdiction of Federal Courts over Class Actions Under CAFA
On December 15, 2014, the U.S. Supreme Court rejected the notion that class actions defendants should be forced to proffer affirmative evidence with their removal petition in order to remove their cases from state to federal court. In a 5-4 decision, the Court held in Dart Cherokee Basin Operating Co. LLC v. Owens that a
Seventh Circuit Affirms Dismissal of FDCPA Lawsuit Under The Rooker-Feldman Doctrine
In Harold v. Steel, the United States Court of Appeals for the Seventh Circuit affirmed dismissal of a Fair Debt Collection Practices Act (FDCPA) suit based on the Rooker-Feldman doctrine. In the case, a small claims court in Marion County, Indiana, entered a judgment against Kevin Harold for a little more than $1,000. He
CFPB Requires Major Credit Reporting Agencies to Inform on Furnishers
On December 11, 2014, the Consumer Financial Protection Bureau (CFPB) issued a report and announced that it will be requiring major credit reporting agencies (CRAs) to provide regular reports to the CFPB identifying, by name, potentially problematic furnishers of information. In other words, the CFPB will be co-opting the major CRAs into helping the CFPB
No End in Sight Yet for Conservatorship of Fannie Mae and Freddie Mac
At a recent hearing before the Senate Banking, Housing, and Urban Affairs Committee, Melvin Watt, Director of the Federal Housing Finance Agency, remarked that he did not see an immediate end to the federal government’s conservatorship of Fannie Mae and Freddie Mac. In 2008, both government-sponsored enterprises were placed into conservatorship by the federal government
FHFA to Issue Risk Management Guidance for Nonbank Mortgage Servicers Today
Today is the deadline when the Federal Housing Finance Agency (FHFA) is scheduled to unveil its risk management guidance intended to curb financial and operational risks associated with loan servicing by nonbank entities.
The backdrop for FHFA’s initiative is the fact that the nation’s three largest nonbank mortgage servicers have tripled in size since 2012,