In a competitive mortgage market with increasingly knowledgeable and demanding borrowers, it is essential that originators implement proper processes and controls to produce accurate property tax data collection, analysis and estimation, according to an online blog posting by Dominique Lalisse, an analyst with CoreLogic. One of the critical components of the new loan origination process that has emerged under the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule is property- tax amount estimation for residential properties, she pointed out. “The estimating process is conducted during the initial stages of origination in order to complete the required loan estimate (LE) provided to the borrower,” Lalisse said. “With increased scrutiny around the preparation of the LE, lenders must ...

Could this be an omen of the decision to come? Earlier this month, the U.S. Court of Appeals for the District of Columbia Circuit granted the CFPB’s request for an en banc rehearing in its controversial legal dispute, PHH Corp. v. CFPB. “Upon consideration of respondent’s [CFPB] petition for rehearing en banc, the briefs amici curiae in support of the petition, the response of the United States to the petition, the response of the petitioners [PHH Corp.] to the petition, the supplemental response of petitioners, and the vote in favor of the petition by a majority of judges eligible to participate, it is ordered the petition be granted,” 10 of the court’s 11 justices wrote in their ruling. One of ...

President Donald Trump has put the Dodd-Frank Act in his crosshairs, issuing an executive order earlier this month that directs the Treasury secretary to work with the members of the Financial Stability Oversight Council to review the current regulatory regime and evaluate it according to a handful of “core principles” Trump believes should shape the regulation of the U.S. financial system. The principles include fostering informed consumer choices, preventing bailouts, promoting economic growth, tailoring regulations and ensuring regulatory accountability. Industry observers and Republicans and Democrats alike on Capitol Hill saw the order as the beginning of an attack on Dodd-Frank and perhaps even a shot across the bow of the CFPB, with negative implications for the agency’s mortgage lending and ...

The CFPB recently brought a more traditional interpretation to its enforcement of the Real Estate Settlement Procedures Act in an action against Prospect Mortgage, two real estate brokers and a mortgage servicer that focuses on alleged kickbacks for referrals of mortgage business. Among the lender’s alleged violations of RESPA was the use of lead agreements to pay brokers for referrals. According to the CFPB’s consent order, Prospect entered into such agreements with more than 200 different counterparties, most of which were real estate brokers. Under these arrangements, Prospect paid the counterparty for each lead it received. However, these counterparties went “well beyond simply transferring information about prospective buyers,” the CFPB alleged. They also referred prospective buyers to Prospect’s loan officers....

In addition to bringing an enforcement action against Prospect Mortgage for alleged violations of the Real Estate Settlement Procedures Act, the CFPB also acted against ReMax Gold Coast and Keller Williams Mid-Willamette, two real estate brokers, and Planet Home Lending, a mortgage servicer – all of whom it accused of taking illegal kickbacks from the lender. Specifically, the CFPB accused both brokers of participating in “certain lead agreements and desk license agreements” with Prospect Mortgage, and of accepting payments from the lender in exchange for referrals in violation of RESPA and its implementing regulation, Regulation X.The bureau also said RGC’s agents “required hundreds of consumers wishing to place an offer on one of their properties offered for sale to pre-qualify ...

An analysis by the Mortgage Bankers Association of the CFPB’s latest foray back into the enforcement of the Real Estate Settlement Procedures Act noted that some of the allegations in the consent orders would have been troubling under the enforcement regime of the Department of Housing and Urban Development.However, the orders also highlight several new points in the way the bureau is enforcing Section 8 of RESPA, the MBA said. “These include that the arrangements steer consumers, exclude other competitors, and were arrived at based on internal analyses of business and that click-throughs to lenders in joint marketing arrangements somehow amount to compensated referrals,” the trade group said. Further, the consent order addressing Planet Home Lending also clarifies that ...

PHH Corp. won another round against some new antagonists in its dispute with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. Earlier this month, a three-judge panel of the U.S. District Court of Appeals for the District of Columbia Circuit agreed with the lender and refused to allow three separate efforts to intervene in the case. In a simple, single-page order, the three judges “ordered that the motions be denied.” The ruling affects an effort by Sen. Sherrod Brown, D-OH, and Rep. Maxine Waters, D-CA, to insert themselves in the case on behalf of the CFPB. The lawmakers had warned the appeals court that if their effort to intervene was denied, they would seek recourse from ...

President Trump late last week signed an executive order laying out his “core principles” for regulating the U.S. financial system, and giving the head of the Treasury Department 120 days to detail how the current massive regulatory regime measures up. Trump’s core principles include fostering informed consumer choices, preventing bailouts, promoting economic growth, tailoring regulations and ensuring regulatory accountability. The broadly-worded order specifies, “Nothing in this order shall be construed to impair or otherwise affect ... the authority granted by law to an executive department or agency, or the head thereof.” The order was...

The Consumer Financial Protection Bureau this week announced a Real Estate Settlement Procedures Act enforcement action against a nonbank lender that appears to reflect a traditional interpretation of the law’s anti-kickback provisions, while a flurry of new paperwork fell on its controversial legal battle with PHH Mortgage. The bureau this week brought a $3.5 million enforcement action against Prospect Mortgage, accusing the firm of illegal kickbacks for mortgage business referrals from real estate brokers, and in an unusual twist, a mortgage servicing operation. The CFPB said...

Late last week, PHH Corp. followed up on the opportunity afforded it by the U.S. Court of Appeals for the District of Columbia Circuit and filed its legal response to the arguments the Department of Justice made late last year in defense of the CFPB’s petition for an en banc rehearing in its dispute with the mortgage lender.The DOJ’s brief “asserts support for rehearing en banc, but not for any of the reasons advanced by the CFPB,” PHH said. “Indeed, the brief never actually defends the CFPB’s structure as consistent with the Constitution. Nor does the brief claim anywhere that the panel erred in its choice of remedy, its decision to reach the separation-of-powers issue, or its discussion of ...