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On April 14, 2016, the Federal Housing Finance Agency (“FHFA”) announced the launch of a principal reduction program for first-lien mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac. According to the announcement, this program is a “last chance” for some borrowers to avoid foreclosure by allowing them to obtain a loan modification that permanently forgives a portion of their mortgage debt. The FHFA estimates that this program will impact approximately 33,000…
On Thursday, February 25, 2016, the CFPB held a Consumer Advisory Board meeting in which it outlined its forward-looking supervision and enforcement priorities. After the Board meeting, the CFPB published a summary of these priorities that promises the following, among other things, during the next two years: Rulemakings related to arbitration and debt collection; Rigorous supervision and enforcement of debt collection-related institutions; A final small-dollar rule; Beginning the research and outreach process for a rule…
On January 15, 2016, the CFPB filed a brief opposing a motion to dismiss in the Matter of Integrity Advance, LLC (“Integrity”) asserting that there is no time bar for certain CFPB actions under its UDAAP authority.  The CFPB’s argument cites its own RESPA enforcement action, which is currently on appeal, in contending that the UDAAP statute of limitations only applies to “civil actions in court, not to administrative proceedings. . . .” In its…
On September 30, 2015, the CFPB ordered an indirect auto lending company and its auto lending subsidiary to pay $48.3 million in fines for alleged FDCPA, TILA, and UDAAP violations. The CFPB alleges that the companies manipulated borrowers by using phony caller ID information and lying about imminent repossession or criminal charges in order to induce loan payments. The CFPB also alleges that the companies also contacted third parties of the borrowers and made similar…
On August 5, the CFPB released a 90-page report summarizing the results of its eClosing pilot program, a research initiative launched in April 2014 to explore whether electronic closing processes offer measurable benefits to mortgage borrowers. According to the CFPB, the pilot program was part of the agency’s overall “Know Before You Owe” campaign, through which the CFPB developed the TILA-RESPA integrated disclosure (TRID) regime. In the report, the CFPB pointed out eClosings may benefit…
After months of playing hard-to-get with industry advocates, the CFPB’s Director Richard Cordray put out a statement that the CFPB is proposing to delay the effective date of the TILA-RESPA Integrated Disclosure (TRID) by two months, from August 1 to October 1. According to Cordray, the time extension is being granted to correct an “administrative error . . .in meeting” federal law requirements but the additional time will also protect consumers from disruptions during a…
Over the past couple of weeks, the CFPB has kept itself busy in the mortgage origination enforcement arena. In one complaint, the CFPB ordered a residential mortgage lender and its CEO to each pay a $1 million civil penalty for compensating loan originators in a way that allegedly steered borrowers into mortgage loans with higher interest rates. Additionally, the company was ordered to pay $18 million in consumer redress. According to the CFPB, the…
In a decision published on March 9, 2015, the Supreme Court ended the D.C. Circuit Court’s Paralyzed Veterans doctrine, which required administrative agencies to utilize the Administrative Procedure Act’s (APA) notice-and-comment process in order to substantially alter an interpretation. See Perez v. Mortgage Bankers Assoc., 575 U.S. ___, No. 13-1041, slip op. (March 9, 2015). According to the Court, this doctrine improperly imposed procedural requirements on agencies that are not required by the APA. Read…
On February 10, 2015, the Consumer Financial Protection Bureau (“CFPB”) added another company to its litany of alleged Real Estate Settlement Procedures Act (RESPA) Section 8 offenders (Lighthouse Title, PHH Corporation, Stonebridge Title, Fidelity Mortgage Corporation). In its Consent Order (“Order”) against NewDay Financial, LLC (“NewDay”), the CFPB claimed that the company violated Section 8’s prohibition against kickbacks by paying “licensing fees” and “lead generating fees” in exchange for referrals from a non-profit organization that…
On January 27, 2015, the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin 2015-1 (the “Bulletin”) reminding supervised financial institutions about regulatory requirements surrounding Confidential Supervisory Information (CSI), specifically the requirement to keep such information confidential. In the Bulletin, the CFPB offers examples of what constitutes CSI, including: (1) CFPB examination reports and supervisory letters; (2) information related to an institution’s supervisory rating, information, and communications; (3) communications between the supervised institution and the…