Articles Tagged with Section 8

The Federal Deposit Insurance CorporationFDIC” on November 30, 2019 entered into a Consent Order FDIC-18-0142k which ordered HomeStreet Bank, a Seattle, Washington based bank to pay a civil money penalty of $1.35 million dollars.  The FDIC alleged that HomeStreet Bank’s now discontinued Home Loan Center-based mortgage banking business line violated Real Estate Settlement Procedures Act, 12 U.S.C. § 2607, and its implementing regulation, Regulation X, 12 C.F.R. Part 1024, by entering into certain co-marketing agreements using online platforms and desk rental agreements which resulted in the payment of fees to real estate brokers and home builders for their referrals of mortgage loan business.  The FDIC also stated that all of HomeStreet Bank’s agreements with those real estate brokers and home builders have been terminated.

The FDIC’s Consent Order stated that HomeStreet Bank entered into the settlement without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation.

Unfortunately though, the FDIC’s Consent Order did not provide any industry guidance on what it found objectionable in the co-marketing agreements using online platforms or the desk rental agreements.  The Sterbcow Law Group hopes the FDIC will in the future provide more detail in its enforcement actions in order to help provide more clarity to the real estate and mortgage industry.

Marx Sterbcow, Managing Attorney, of the Sterbcow Law Group will present in two sessions at the 2017 Real Estate Service Providers Council “RESPRO” Annual Conference at the Bellagio Hotel in Las Vegas, Nevada on April 19, 2017.  The RESPRO Conference is from April 18-20, 2017.

The first session “Unfair Deceptive Abusive Acts Practices UDAAP: The Cloud Still Hangs Low” is from 1:30 PM– 2:30 PM in the DaVinci 3 Ballroom. Mr. Sterbcow is co-presenting with Francis (Trip) Riley with Saul Ewing. The presentation will focus on how UDAPP will continue to effect CFPB’s actions on settlement service providers and how RESPA regulated Affiliated Business Arrangements (AfBAs) need to be cognizant of their marketing and advertising efforts. We will address cases of interest and suggest tips that every company should incorporate.

The second session “RESPA: Stretching the Envelope on Prohibited Referrals” is from 2:45 PM – 3:45 PM in the DaVinci 3 Ballroom.  Mr. Sterbcow is co-presenting with Stan Gordon with Gordon & Associates and Francis (Trip) Riley with Saul Ewing.  The presentation will focus on the basic parameters of what is prohibited referral activity have expanded under CFPB which has resulted in a chilling effect on the financial settlement service industry.  The ambiguity in RESPA on defining a referral and the perceived risks in marketing activities in various circumstances will be discussed.  The presentation will provide some clarifications on when an endorsement of a service provider becomes a prohibited referral.  The session will also address whether it is a violation of Section 8 for a nationwide real estate brokerage group to promote a service provider throughout its owned or affiliated companies to their management and sales agents.  How considerations under PHH and RESPA exception Section 8(c)(2) need to be considered and is the exception absolute as implied by the current ruling.