RESPA Lawyer Blog

The Sterbcow Law Group is pleased to announce that Charles C. Cain will join the law firm effective January 1, 2009. Charles will be "Of Counsel" and will work out of his Cincinnati, Ohio office. Charles is highly regarded as one of the country's top RESPA compliance and regulatory attorneys by many in the legal and real estate industry. He will add tremendous depth to the firm in our rapidly expanding RESPA litigation and compliance practice.

Charles joins The Sterbcow Law Group from LandAmerica Financial Group, Inc. where he was the Vice President of LandAmerica's Senior Alliance Business Partner division where he focused on management and creation of over 400 RESPA compliant affiliated business relationships in over 28 states. He also provided employee and independent agent RESPA training. Charles is also President of Alliance Solutions LLC in Cincinnati, Oho.

Charles has been a featured speaker at various events such as The Real Estate Settlement Providers Organization, October Research's programs such as Title Radio and the National Settlement Services Summit, Ohio Bar Association, Kentucky Bar Association, Ohio Land Title Association, Indiana Land Title Association, Missouri Land Title Association, and Michigan Land Title Association. His reputation and knowledge are one of the many reasons that numerous state regulators throughout the United States consult with him for RESPA guidance.

The United States Department of Housing and Urban Development awarded him the "Special Citation" for Fair Housing Best Practices. He is the Past Chairman of the Real Property Section of the Cincinnati Bar Association, former Trustee of the Cincinnati Mortgage Bankers Association, Member of the Mayor of Cincinnati's Blue Ribbon Committee of the Cincinnati Housing Partnership, and a Member of the Cincinnati Area Fair Mortgage Credit Project through the Federal Reserve Bank of Cleveland.

Charles is admitted to practice law in Ohio, Kentucky, various Federal Courts, and the U.S. 6th Circuit Court of Appeal.

Continue reading " NATIONALLY ACCLAIMED RESPA ATTORNEY, CHARLES "CHUCK" CAIN, JOINS THE STERBCOW LAW GROUP " »

Section 6 of the Real Estate Settlement Procedures Act (12 U.S.C. 2605) gives certain classes of borrowers rights, regardless of whether the borrowers loan was held by the lender or the loan service was transferred to one or more loan servicing companies. If a borrower believes there is an issue with the loan servicing (including escrow account questions) on their loan the following steps must be carefully followed:

1. The borrower or the borrower's attorney must send a "Qualified Written Request" to the loan servicer. *See below as to what is required on a Qualified Written Request Letter.

2. The loan servicer must provide the borrower or borrower's attorney with a written acknowledgment within twenty (20) Business Days of receipt of the borrower's request.

3. The loan servicer has no more than 60 days Business Days after receiving the borrower's request to correct the errors on the borrower's loan account or the loan servicing company must provide the borrower with a written clarification disputing any such error.

4. Its extremely important to note that during this sixty (60) Business Day period that the borrower's servicer is forbidden to provide a credit reporting agency any information concerning any overdue payment related to such period or qualified written request.

What kind of damages would a borrower or a loan servicing company potentially be entitled/subjected to? Well Section 6 of RESPA provides for actual damages, additional damages, and costs for individuals or classes of individuals in circumstances where the services are shown to have violated the requirements of Section 6.

Section 6 of RESPA has a 3 year statute of limitations.

It is important to note that borrowers who are experiencing loan servicing irregularities continue to make their monthly mortgage payments.

Continue reading " RESPA SECTION 6: LOAN SERVICING COMPLAINT INFORMATION FOR CONSUMERS " »

The National Association of Mortgage Brokers (NAMB) filed a lawsuit against the United States Department of Housing and Urban Development (HUD) last week. The lawsuit seeks to prevent to HUD from implementing the the new RESPA rule. While NAMB is the first trade association sue HUD, most real estate industry observers expect that dozens of other various local and national trade associations will file suit as well to stop this rule from going into effect.

NAMB believes that the new RESPA rule violates the Administrative Procedure Act (APA) and the Regulatory Flexibility Act (RFA). The lawsuit also alleges that HUD failed to examine the new rules impact on small businesses arguing that the implementation of this rule will significantly hurt consumers and cause unfair imbalances in the mortgage lending marketplace.

If the Obama Administration doesn't kill the new RESPA rule in its entirety next month when they take office then the odds are this will hot button rule will be mired in litigation and cost millions of dollars in legal fees on both sides.

HUD new RESPA rule changes the definition of "Required Use" to read as follows:

"Required use means a situation in which a borrower's access to some distinct service, property, discount, rebate or other economic incentive, or the borrower's ability to avoid an economic disincentive or penalty, is contingent upon the borrower using or failing to use a referred provider of settlement services. However, the offering by a settlement service provider of an optional combination of a bona fide settlement services to a borrower at a total price lower than the sum of the prices of the individual settlement services does not constitute a required use."

The new RESPA rule as defined would apply to the condition of the affiliated business arrangement exception to Section 8 that a consumer may not be required to use an affiliated business arrangement (AfBA) settlement service provider and the prohibition under Section 9 that a seller of the property may not require that title insurance be purchased by the buyer from any particular title company (whether affiliated or unaffiliated).

The proposed RESPA rule definition also places limits on incentives based on the use of one or more affiliated settlement services providers. The definition says that incentives can only be offered by settlement service providers, however the rule says that developers and/or homebuilders are not considered settlement service providers. Homebuilders and/or developers under this new rule are prohibited from offering incentives to borrowers to use their affiliated business arrangement companies.

The new RESPA rule says that any incentive must be limited to a reduction in the price for the settlement services. The rule also states that incentives can only be offered to borrowers which means that sellers or other third parties would be forbidden from receiving any sort of incentive.

Continue reading " RESPA REFORM: REQUIRED USE DEFINED " »

President Elect Barak Obama has selected Shaun Donovan to be the next United States' Secretary of Housing and Urban Development. Donovan, who was the head of the New York Department of Housing Preservation and Development, is viewed by many in the industry as someone who possesses a significant amount of experience in the housing field.

Donovan was Managing Director for Prudential Mortgage Capital Co's Lending and Affordable Housing Investments Division prior to his position with New York City. Real Estate Industry groups (the National Association of Realtors Mortgage Bankers Association, and others) have lauded Donovan's selection once his name became public.

Donovan will inherit a lot of controversial regulations including RESPA Reform and will have to address other areas including the Federal Housing Administration's (FHA) lending issues.

If the Senate confirms Donovan he will replace Steve Preston.

Continue reading " HUD: PRESIDENT ELECT OBAMA SELECTS SHAUN DONOVAN TO BE NEW SECRETARY " »