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Inside the CFPB

June 28, 2010

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Conferees Agree on Final Reform Package

Working through one night last week, the House-Senate Conference Committee emerged with a completed draft on financial reform legislation that would bring the biggest changes in financial regulation since the Great Depression. The House conferees approved the bill by a final vote of 20-11; the Senate conferees passed it 7-5. It was 5:40 a.m., June 25, when the conference adjourned... Read More

Warning on Illegal Pitches for Home Warranties

If you are a home warranty company, paying a real estate broker or agent for marketing services to homebuyers or sellers on your behalf would be a violation of the Real Estate Settlement Procedures Act, according to the Department of Housing and Urban Development.Specifically, such compensation would be deemed an “illegal kickback for a referral under Section 8... Read More

Mortgage Reform, Underwriting, HOEPA Protections Amended

Mortgage reform, minimum underwriting standards, and the definition of high-cost mortgages also saw significant changes as House-Senate conferees worked to reconcile competing versions of regulatory reform legislation. The bill requires mortgage lenders to ensure a borrower’s ability to repay; prohibits unfair lending practices and fees, such as yield-spread premiums; and establishes... Read More

Risk Retention Becomes Reality, CRAs under Tighter Regulation

The Dodd-Frank Act requires federal banking regulators, the Department of Housing and Urban Development, and the Securities and Exchange Commission to set a 5 percent risk retention requirement for assets that are not “qualified residential mortgages.” An asset that is not a qualified residential mortgage but meets underwriting standards will be... Read More

Regulators to Hold Public Hearings On Possible CRA, HMDA Updates

Federal banking regulators will hold public hearings over the summer to discuss modernizing Community Reinvestment Act regulations and revising rules implementing the Home Mortgage Disclosure Act. The CRA hearings will tackle a host of issues, including the scope of geographic coverage, performance tests for asset thresholds and designations, affiliate activities, and small business... Read More

Servicers Establish Fair Lending Policies in Loss Mit Initiatives

With fair lending enforcement shifting from loan origination to servicing in light of the foreclosure problem, mortgage servicers are carefully laying out their fair lending policies and procedures as they implement foreclosure-prevention initiatives. Testifying before the House Committee on Oversight and Government Reform last week, mortgage servicers said... Read More

Morgan Stanley Agrees to Repay Massachusetts Subprime ‘Victims’

Wall Street firm Morgan Stanley has agreed to pay $102 million to institutional investors, distressed borrowers and the Commonwealth of Massachusetts to settle dispute over the firm’s role in the financing and securitization of subprime loans made in the Bay State. The agreement was reached with State Attorney General Martha Coakley as part of a continuing Read More

Wells Fargo Lashes Out Against Cities’ ‘Public Nuisance’ Suits

Predatory lending lawsuits brought by the Cities of Baltimore and Memphis falsely blamed Wells Fargo for tax revenue losses and increased spending on public safety that largely resulted from long-running socio-economic ills and urban decay, said a company executive. In testimony before the House Committee on Oversight and Government Reform last week, Michael Heid... Read More

State Roundup

Illinois: The state legislature has amended its foreclosure statute, allowing a borrower to undo a foreclosure sale if the borrower proves he or she applied for a loan modification under the Home Affordable Modification Program, and that the property was sold nevertheless in violation of the... Read More

Federal Roundup

New Net Worth, Correspondent Rule Clarified. HUD has issued Mortgagee Letter 2010-20 to clarify and explain the implementation of recently issued final rules increasing approved FHA lenders’ net worth requirements and eliminating the approval requirement for loan correspondents. The new rules also will affect the relationship of principals and authorized agents... Read More

Worth Noting

More than 3.2 million homeowners have saved their homes through permanent loan modifications... The Property Records Industry Association has published an updated Version 3.0 Candidate Recommendation... SEC3 Compliance Consultants has scheduled two West Coast compliance roundtables for July 19 in Los Angeles... The American Land Title Association will have its annual convention Oct. 13-16 at... Read More

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