RESPA Lawyer Blog

The Obama Administration is pushing new legislation which would create a financial services regulatory commission. The commission would be called "The Financial Product Safety Commission" and it would regulate all mortgages, credit cards, and mutual funds. The Washington Post's Zachary A. Goldfarb, Binyamin Appelbaum and David Cho wrote an article on May 20, 2009.

The Senate version of this bill under Section 10: Enforcement has some very strong criminal and civil money penalties that could further strengthen consumer protections against businesses. The current senate & house versions of the bill could add considerable consumer protections against loan servicing companies which under Section 6 of RESPA offer consumers very little protection from some mortgage servicing companies abusive practices. This is definitely one of those bills to keep an eye on as the ramifications could be huge for businesses and consumers.

Continue reading "RESPA: THE FINANCIAL PRODUCT SAFETY COMMISSION ACT OF 2009" »

Posted by Marx Sterbcow | Permalink | Email This Post | Comments (0)

Posted In: Administrative Brokerage Commission Fees (ABC) , Affiliated Business Arrangements (AfBA) , Affiliated Business Disclosure Form , GOOD FAITH ESTIMATE "GFE" , REQUIRED USE: Section 9 under the new RESPA rule , RESPA , RESPA LITIGATION , RESPA Marketing Agreements , RESPA Reform , RESPA SECTION 6: LOAN SERVICING , RESPA SECTION 8(b): UNEARNED FEES , RESPA SECTION 9: REQUIRED USE , RESPA VIOLATIONS , RESPA: SECTION 10 ESCROW ACCOUNTS

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October Research has selected Charles C. Cain to be a speaker at the 2009 National Compliance Summit on February 19-20, 2009 at The Westin Casuarina Las Vegas Hotel, Casino & Spa. Charles Cain is Of Counsel to the Sterbcow Law Group LLC in New Orleans, Louisiana and is President of Alliance Solutions LLC based in Cincinnati, Ohio.

Posted by Marx Sterbcow | Permalink | Email This Post | Comments (0)

Posted In: Administrative Brokerage Commission Fees (ABC) , Affiliated Business Disclosure Form , REQUIRED USE: Section 9 under the new RESPA rule , RESPA , RESPA CONFERENCE , RESPA LITIGATION , RESPA Marketing Agreements , RESPA Reform , RESPA SECTION 6: LOAN SERVICING , RESPA SECTION 9: REQUIRED USE

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According to Kenneth R. Harney in his Washington Post article, Lawsuit Takes Aim at Junk Fees Administrative Brokerage Commission (ABC) fees have been charged by real estate brokerages across the United States and a RESPA class action lawsuit seeks to do away with this practice. Although HUD's RESPA division has not given guidance yet on whether they believe this practice is illegal or legal the general rule of thumb is that if a real estate brokerage does charge an ABC fee then they better document the services that were performed to demonstrate the fee they charged was legitimately earned.

If a brokerage just charges a $400.00 ABC fee on the borrower and admits they didn't perform any services to justify that amount then they could find themselves in deep trouble. The rule of thumb on ABC fees is that if one is charged by a real estate brokerage then the brokerage better account for what services were performed. An example of this would be the real estate brokerage charges an ABC to the borrower and the fee goes towards something like storage of documents and electronic scanning. There are several other examples of how to charge an ABC legitimately but if you don't do any of these functions then you could be held to be violating Section 8(b) under RESPA--the dangerous unearned fee provision.

Posted by Marx Sterbcow | Permalink | Email This Post

Posted In: Administrative Brokerage Commission Fees (ABC)

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