Articles Posted in CONSUMER FINANCIAL PROTECTION BUREAU: RESPA

Marx Sterbcow, managing attorney with the Sterbcow Law Group, and James Milano, member with Weiner Brodsky Kider PC will speak on RESPA News’s webinar series on the topic of Lead Generation Compliance. The webinar is scheduled for Tuesday, November 10, 2015 from 2:20-3:15 PM EST. The Editor of RESPA News, Justine Jones will moderate the webinar.

We will train participants on the regulations governing the real estate lead generation industry and what increased attention the CFPB, Federal Trade Commission, and other agencies mean for your business practices. The webinar will focus on how the CFPB expanded its authority with the use of UDAAP, the potential ramifications of Regulation Z’s Loan Officer Compensation Rule, the dangers of co-marketing with other settlement service providers, and how to carefully vet lead generation companies.

Marx Sterbcow, managing attorney, of the Sterbcow Law Group, has been invited to speak at the Louisiana Bankers Association 2015 Bank Counsel Conference on the topic of “Who’s Your Vendor? Secondary Market Compliance & Title Agent Vendor Management.” The session will provide insight into how banks should be managing their vendors and what requirements they should be requiring their title agent vendors to have in place. The presentation will also focus on managing the third party vendor management risks in a Post-TRID world and the expectations the secondary market will be playing in this new changing regulatory landscape.

The 2015 Bank Counsel Conference will be held on December 10-11, 2015 at the Ritz Carlton Hotel in New Orleans.

Marx Sterbcow, the managing attorney, of the Sterbcow Law Group, has been invited to speak to the Kansas Land Title Association, Mortgage Bankers Association of Greater Kansas City, and Missouri Land Title Association‘s Midwest TRID and Compliance Summit on September 23, 2015 in Kansas City, Kansas at Arrowhead Stadium, Tower Club East, One Arrowhead Drive, Kansas City, MO 64129.

The presentation “Vendor Management and the Secondary Market” will discuss the secondary market investors expectations for settlement agents and how you should be monitoring your third party and fourth party vendors.

Mr. Sterbcow will then moderate a Lender Panel where he will ask TRID and Vendor Management questions to Kate Steineman from Wells Fargo, Ruth Battle from Central Bank, and Amy Prater from Bank Midwest to help title agents understand what they need to do to get ready for the TILA-RESPA Integrated Disclosure implementation date on October 3, 2015.

The United States Court of Appeals for the Ninth Circuit issued their 24 page Opinion today, August 24, 2015, in the Denise P. Edwards versus The First American Corporation; First American Title Insurance Company class action lawsuit. No. 13-55542 D.C. No. 2:07-cv-03796-SJO-FFM.

The Edwards v. First American class action lawsuit was originally filed on June 12, 2007 and has spent over 8 years bouncing from federal court to federal court.

The 9th Circuit Court of Appeals affirmed in part and vacated in part the United States District Court for the Central District of California’s order denying class certification in a case where the Plaintiffs alleged that First American Title engaged in a national scheme of paying title agencies things of value in exchange for the title agencies’ agreement to refer future title insurance business to First American in violation of the Real Estate Settlement Procedures Act “RESPA”.

The CFPB announced on Feb. 12, 2015 another consent order for issues involving a lender mortgage origination advertising practices. Flagship Financial Group, LLC was alleged to have made material misrepresentations in commercial communications that improperly suggested that Flagship Financial was affiliated with a United States government entity and Flagship made material misrepresentations that it was endorsed or sponsored by a governmental program. This consent order is very similar to the American Preferred Lending consent order.

The Consumer Financial Protection Bureau alleged that Flagship disseminated advertisements promoting FHA streamline refinance loans and that the format & design of these advertisements looked like a government notice and implied that a governmental agency was the source of the advertisement.

The FHA streamline refinance mailers contained the heading “PURSUANT TO THE FEDERAL HOUSING ADMINISTRATION (FHA) HUD No. 12-045,” and “United States Housing and Urban Development 12-045 Program,” and instructed consumers to call their “assigned FHA loan specialist.” Flagships name appeared only on the back of the FHA streamline advertisement mailers in the disclaimer section that Flagship was not an agency of the federal government and wasn’t affiliated with the borrower’s current lender.

The Consumer Financial Protection Bureau has been sending strong messages across the real estate industry lately with its aggressive campaign against companies who they believe have made material misrepresentations which improperly suggested the lender was affiliated with a United States governmental entity or the company advertising its mortgage products was endorsed, sponsored by, or affiliated with a governmental program to consumers. The first consent order is American Preferred Lending.

On Feb. 12, 2015 the CFPB entered into a consent order with American Preferred Lending, Inc. whereby the bureau deemed American Preferred Lending violated Regulation N, 12 C.F.R. 1014.3(n) and UDAAP. The consent order found that American Preferred Lending disseminated direct-mail mortgage loan advertisements that improperly suggested that American Preferred Lending was affiliated with a governmental agency, and misrepresented that the advertised mortgage loan products were endorsed, sponsored by, or affiliated with a governmental program. The CFPB said the direct mail pieces appeared as if they were United States government notices.

The CFPB noted that “the overall format of the advertisements, including the use of plain text in labeled boxes and the title ‘Payment’ Reduction Notice,’ evoked a government form.” The advertisements were also not clearly marked so consumers could see they came from American Preferred and not the Government.

The CFPB made a last minute surprise decision that they would be issuing a proposed amendment to delay the effective date of the TILA-RESPA Integrated Disclosure Rule “TRID” from August 1, 2015 to October 1, 2015.

Consumer Financial Protection Bureau “CFPB” Director Richard Cordray issued the following statement with respect to the TRID delay proposal:

“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

The Consumer Financial Protection Bureau “CFPB” announced today they will delay “enforcement” of the new Truth In Lending-RESPA Integrated Disclosure “TRID” rule for an undefined period of time. Over two hundred members of Congress were pushing for an enforcement delay until December 31, 2015 but the CFPB did not place a definitive time frame for compliance thus leaving the date that CFPB enforcement starts very murky.

The CFPB also said they will apply a standard of “sensitivity” in their TRID enforcement oversight with companies who provide “good-faith efforts” to comply with TRID. However, the Bureau failed to define what “sensitivity” or “good-faith efforts” actually mean and how they will be applied.

The enforcement delay is certainly a good step because the CFPB clearly heard from the industry that a number software companies were unable to get their lending customers ready in time. The American Bankers Association recently conducted a study which said that 8 out of 10 bank members couldn’t verify when their software system would be ready or were informed their software system wouldn’t be ready before June. The Loan Originator System “LOS” troubles were discussed in a blog post we did in January.