The U.S. Fourth Circuit Court of Appeals has ruled in favor of Wells Fargo and co-defendant Long & Foster in a class-action dispute involving an affiliated business arrangement. In Minter v. Wells Fargo Bank, NA et al, plaintiffs/appellants Denise Minter, Jason and Rachel Alborough, and Lizbeth Binks brought suit on behalf of a group of consumers alleging that Wells Fargo and Long & Foster Real Estate violated the Real Estate Settlement Procedures Act. Specifically, the plaintiffs alleged that defendants created a joint venture, Prosperity Mortgage Co., to skirt RESPA’s prohibition on kickbacks in exchange for the referrals of settlement service business while failing to disclose this business arrangement to its customers. Here’s...

Black Knight Financial Services – with a little help from its friends at Wells Fargo Home Mortgage – has repurposed some of its existing technology and combined it with some fresh capabilities to help lenders cope with the Consumer Financial Protection Bureau’s TILA/RESPA integrated disclosure rule. It also will enable mortgage lenders to automate the numerous multi-party processes required to close a loan these days, the company said. The new ...

Bureau Moves to Ensure Equal Treatment for Same-Sex Marrieds. The CFPB is synchronizing its internal policies with the U.S. Supreme Court decision in United States v. Windsor, striking down as unconstitutional Section 3 of the Defense of Marriage Act, which holds that the word ‘marriage’ means only a legal union between one man and one woman. According to a staff memorandum from CFPB Director Richard Cordray, the CFPB will regard a person who is married under the laws of any jurisdiction to be married nationwide for purposes of the federal statutes and regulations under the bureau’s jurisdiction regardless of the person’s place of residency. However, consistent with other federal regulatory agencies, the bureau will not regard persons who are joined ...

Any respite the mortgage industry had from enforcement actions under the Real Estate Settlement Procedures Act is over. If there’s one overarching theme about the Consumer Financial Protection Bureau’s vigorous RESPA activity of late, it’s that the basics still count when it comes to compliance, even as the bureau pushes the theoretical envelope in some instances, top industry attorneys say. “RESPA Section 8 enforcement is back. It was in abeyance during the transition of RESPA enforcement from the Department of Housing and Urban Development to the CFPB over the last few years,” said attorney Angela Kleine, an associate in the San Francisco office of the Morrison & Foerster law firm. “But the CFPB is picking up where HUD left off, and then some.” Kleine said...

The FHA is seeking comment on two new sections of a proposed single-family handbook for mortgage lenders. The handbook is in development. Once completed, it will serve as the centralized source of current and future FHA policies. Agency staff is collating policies from several handbooks, rules, mortgagee letters, notices and other sources to incorporate into the handbook. The FHA is publishing two new sections, “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and Compliance,” for comment. The “Doing Business” section lays out the requirements for FHA lender approval, including eligibility requirements, application processes, operating requirements and post-approval changes. The section also contains the recertification process as well as processes for applying for ...

There’s still more than a year left before the Consumer Financial Protection Bureau’s integrated mortgage disclosure final rule takes effect. But top industry representatives are urging lenders to begin preparations now, if they haven’t already done so, because of the depth and breadth of the new regulation – and the central role it will play in the origination process. During a general session of the American Bankers Association’s annual regulatory compliance conference, held in New Orleans earlier this month, Rod Alba, senior regulatory counsel for the trade group, said that the CFPB’s TILA/RESPA integrated disclosure – known as TRID – is a massive project. “We cannot take it lightly,” Alba said. He also emphasized...

The CFPB recently ordered a New Jersey company, Stonebridge Title Services Inc., to pay a $30,000 civil penalty to the bureau for allegedly paying illegal kickbacks for referrals. According to the CFPB, Stonebridge paid commissions to more than 20 independent sales representatives who referred title insurance business to Stonebridge. Stonebridge solicited people to provide it with referrals of title insurance business, offering to pay commissions of up to 40 percent of the title insurance premiums Stonebridge itself received, the bureau alleged. “These practices violated Section 8 of the Real Estate Settlement Procedures Act, which prohibits kickbacks and payment of unearned fees in the context of residential real estate transactions,” the CFPB said. Paying commissions for referrals is allowed under RESPA ...

Rod Alba, senior regulatory counsel for the American Bankers Association, told attendees at this year’s ABA regulatory compliance conference it will take the mortgage industry roughly 10 years for all the new rulemakings issued and still pending at the CFPB and elsewhere to reach a point of finality, stability and certainty. “I’ve said that it would take us possibly a full decade to get through all the rulemaking we have with mortgages. We’ve started about two or three years ago with the first being proposed and now at the beginning of this year with some of the rules [taking effect],” he said. Why a decade? “Well, not all the rules are done yet. As you know, we still have the ...

In its largest settlement under the Real Estate Settlement Procedures Act against a company that is not a mortgage insurer, the CFPB ordered Alabama real estate company RealtySouth to pay a $500,000 civil penalty to settle claims it gave inadequate disclosures of its relationship with an affiliated title insurance company. The practices identified by the CFPB’s investigation illegally benefited TitleSouth, an affiliated company owned by the same holding company that owns RealtySouth, according to the bureau, and left consumers unaware of their rights to choose service providers during the home-buying process. “RealtySouth’s preprinted form purchase contracts, which its agents provided to homebuyers preparing to make an offer on a home, either explicitly directed...

A small mortgage lender that mostly provides loss mitigation financing to distressed homeowners has strayed into the CFPB's crosshairs and was compelled to pay $83,000 in a civil money penalty to settle charges it illegally split fees in violation of the Real Estate Settlement Procedures Act. Begun in 2004, 1st Alliance Lending, LLC, is an East Hartford, CT-based lender that purchases troubled mortgages from servicers, and then reaches out to the affected borrowers and offers them new loans with reduced principal amounts under federal mortgage efforts such as the Hope for Homeowners program.