Source: https://www.respalawyer.com/category/respa-reform/
Timestamp: 2019-04-24 19:56:05+00:00

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On October 30, 2013, the Office of the Comptroller of the Currency “OCC” issued a bulletin on “Risk Management Guidance” which will have wide ranging implications for all vendors of national banks and federal savings associations. The bulletin provides new guidance for assessing and managing compliance risks associated with third-party relationships. A 3rd party relationship is any business arrangement between a banks and another entity, by contract or otherwise.
3rd party relationships include activities that involve outsourced products and services, use of independent consultants, networking arrangements, merchant payment processing services, services provided by affiliates and subsidiaries, joint ventures, and other business arrangements where the bank has an ongoing relationship or may have responsibility for the associated records. Affiliate relationships are also subject to sections 23A and 23B of the Federal Reserve Act (12 USC 371c and 12 USC 371c-1) as implemented in Regulation W (12 CFR 223). Third-party relationships generally do not include customer relationships.
(6) contracting with third parties whose employees, facilities, and subcontractors may be geographically concentrated; and (7) working with a third party to address deficiencies in bank operations or compliance with laws or regulations.
(1) failed to properly assess and understand the risks and direct and indirect costs involved in third-party relationships.
(2) failed to perform adequate due diligence and ongoing monitoring of third-party relationships.
(3) entered into contracts without assessing the adequacy of a third party’s risk management practices.
(4) entered into contracts that incentivize a third party to take risks that are detrimental to the bank or its customers, in order to maximize the third party’s revenues.
(5) engaged in informal third-party relationships without contracts in place.
These examples represent trends whose associated risks reinforce the need for banks to maintain effective risk management practices over third-party relationships.
Posted in: Affiliated Business Arrangements (AfBA), Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU, CONSUMER FINANCIAL PROTECTION BUREAU: FAIR LENDING LAWS, CONSUMER FINANCIAL PROTECTION BUREAU: RESPA, CONSUMER FINANCIAL PROTECTION BUREAU: SERVICE PROVIDER COMPLIANCE, EQUAL CREDIT OPPORTUNITY ACT, FAIR HOUSING ACT, HOME VALUATION CODE OF CONDUCT (HVCC), HUD-1 Settlement Statement, MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), OCC: THIRD PARTY VENDOR MANAGEMENT BULLETIN, QRM: QUALIFIED RESIDENTIAL MORTGAGE PROPOSAL, REGULATION Z, REQUIRED USE: Section 9 under the new RESPA rule, RESPA, RESPA COMPLIANCE, RESPA Marketing Agreements, RESPA SECTION 5: SPECIAL INFORMATIONAL BOOKLET, RESPA SECTION 6: LOAN SERVICING, RESPA SECTION 8: ILLEGAL KICKBACKS & REFERRAL FEES, RESPA SECTION 8: SERIES LLC, RESPA SECTION 8(b): UNEARNED FEES, RESPA SECTION 9: REQUIRED USE, RESPA VIOLATIONS, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: SHAM JOINT VENTURE GUIDELINES, RESPA: YIELD SPREAD PREMIUM, THE CLOSING DISCLOSURE (Combined HUD-1 and TILA forms), TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"
The 8th Circuit Court of Appeals overturned a district court decision in the Charvat v. Mutual First Federal Credit Union case. The case involved a violation of the Electronic Fund Transfer Act (“EFTA”) 15 U.S.C. §1693 where the Charvat’s made several ATM withdrawals from two Nebraska banks. The 8th Circuit stated “The EFTA requires ATM operators to provide two forms of notice, one “on or at” the ATM machine and another on-screen during the ATM transaction, if the bank operators charged a ATM transaction fee. The ATM machines in question failed to provide the required notice disclosure on the “on ATM machine” and this was the basis for the class action.
The 8th Circuit held that “[D]ecisions by this Court and the Supreme Court indicate that an informational injury alone is sufficient to confer standing, even without an additional economic or other injury.” The 8th Circuit further stated that Charvat identified a variety of instances where the denial of a statutory right to receive information was sufficient to establish standing and cited to the Fed. Election Comm’n v. Akins case and more importantly the Dryden v. Lou Budke’s Arrow Fin. Co. which was a Truth-In-Lending Act case.
Posted in: Affiliated Business Arrangements (AfBA), Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU: FAIR LENDING LAWS, CONSUMER FINANCIAL PROTECTION BUREAU: SERVICE PROVIDER COMPLIANCE, EQUAL CREDIT OPPORTUNITY ACT, FAIR HOUSING ACT, GOOD FAITH ESTIMATE "GFE", MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), QRM: QUALIFIED RESIDENTIAL MORTGAGE PROPOSAL, REGULATION Z, REQUIRED USE: Section 9 under the new RESPA rule, RESPA CLASS ACTION LAWSUITS, RESPA COMPLIANCE, RESPA LITIGATION, RESPA Marketing Agreements, RESPA SECTION 6: LOAN SERVICING, RESPA SECTION 8: ILLEGAL KICKBACKS & REFERRAL FEES, RESPA SECTION 8: SERIES LLC, RESPA SECTION 8(b): UNEARNED FEES, RESPA SECTION 9: REQUIRED USE, RESPA VIOLATIONS, RESPA: HOME WARRANTY COMPENSATION, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: SHAM JOINT VENTURE GUIDELINES, RESPA: YIELD SPREAD PREMIUM, THE CLOSING DISCLOSURE (Combined HUD-1 and TILA forms), TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"
The Consumer Financial Protection Bureau “CFPB” and the United States Department of Justice “DOJ” formally entered into an Memorandum of Understanding Agreement “MOU” pursuant to Section 1054(d)(2)(B) of the Dodd-Frank Wall Street Reform and Consumer Protection Act which mandated the two agencies to establish an agreement between themselves to help prevent enforcement conflicts and help streamline fair lending law litigation under Federal law. The MOU involves Federal fair lending laws such as the Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and Truth In Lending Act.
1. Information sharing and confidentiality issues: the agencies will be sharing information in matters that the CFPB refers to the Justice Department, in joint investigations under the ECOA, and in order to coordinate fair lending enforcement. The MOU establishes strict confidentiality protections for this shared information.
Posted in: Affiliated Business Arrangements (AfBA), Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU, CONSUMER FINANCIAL PROTECTION BUREAU: RESPA, CONSUMER FINANCIAL PROTECTION BUREAU: SERVICE PROVIDER COMPLIANCE, EQUAL CREDIT OPPORTUNITY ACT, FAIR HOUSING ACT, Federal Housing Administration FHA, GOOD FAITH ESTIMATE "GFE", HUD-1 Settlement Statement, MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), QRM: QUALIFIED RESIDENTIAL MORTGAGE PROPOSAL, REGULATION Z, RESPA, RESPA LITIGATION, RESPA Marketing Agreements, RESPA SECTION 5: SPECIAL INFORMATIONAL BOOKLET, RESPA SECTION 6: LOAN SERVICING, RESPA SECTION 8: ILLEGAL KICKBACKS & REFERRAL FEES, RESPA SECTION 8(b): UNEARNED FEES, RESPA SECTION 9: REQUIRED USE, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: SHAM JOINT VENTURE GUIDELINES, RESPA: YIELD SPREAD PREMIUM, THE CLOSING DISCLOSURE (Combined HUD-1 and TILA forms), TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"
The Consumer Financial Protection Bureau “CFPB” released the “Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act” (Regulation Z) proposed rule today. The CFPB is asking the public to comment on the rule on or before November 6, 2012 with the exception of 12 CFR 1026.1(c) and 1024.4 in which comments are due on or before September 7, 2012. The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the CFPB to issue proposed rules and forms that combine certain disclosures that consumers recieve in connection with applying for and closing on a mortgage loan under the TILA and RESPA. The CFPB has proposed to amend Regulation X (RESPA) and Regulation Z (TILA) to establish new disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property.
To read a copy of this proposed rule please click the link below. Warning the document is 1099 pages so becareful before hitting the print button on your computer!
The Consumer Financial Protection Bureau “CFPB” announced plans today to implement an early warning enforcement action plan (“the Early Warning Notice“) which would allow those under investigation the ability to respond to the CFPB. The CFPB Bulletin 2011-04 (Enforcement) announced the first in a series of periodic bulletins the CFPB will release which are aimed at providing information about the policies and priorities of the CFBP’s Bureau of Enforcement.
It is important to note that if the subject(s) of an investigation is asked to provide the Bureau of Enforcement a response statement and the subject prepares and submits the response statement under oath to the Bureau the response may be discoverable by third parties.
The Early Warning Notice also allows any person involved in an investigation to voluntarily submit a written statement at any point during an investigation.
Posted in: Affiliated Business Arrangements (AfBA), Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU, CONSUMER FINANCIAL PROTECTION BUREAU: EARLY WARNING NOTICE, CONSUMER FINANCIAL PROTECTION BUREAU: RESPA, FEDERAL RESERVE BOARD: LOAN OFFICER COMPENSATION, GOOD FAITH ESTIMATE "GFE", HUD-1 Settlement Statement, MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), QRM: QUALIFIED RESIDENTIAL MORTGAGE PROPOSAL, REGULATION Z, REQUIRED USE: Section 9 under the new RESPA rule, RESPA, RESPA LITIGATION, RESPA Marketing Agreements, RESPA Reform, RESPA SECTION 5: SPECIAL INFORMATIONAL BOOKLET, RESPA SECTION 6: LOAN SERVICING, RESPA SECTION 8: ILLEGAL KICKBACKS & REFERRAL FEES, RESPA SECTION 8: SERIES LLC, RESPA SECTION 8(b): UNEARNED FEES, RESPA SECTION 9: REQUIRED USE, RESPA VIOLATIONS, RESPA: HOME WARRANTY COMPENSATION, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: SHAM JOINT VENTURE GUIDELINES, RESPA: YIELD SPREAD PREMIUM, TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"
The United States Department of Housing and Urban Development “HUD” announced a settlement with Fidelity National Financial (NYSE: FNF) in the amount of $4.5 million dollars for HUD’s contention that Fidelity violated the Real Estate Settlement Procedures Act “RESPA” when it paid real estate brokers and other settlement service providers illegal kickbacks and improper referral fees for referring business through an “Application Service Provider Agreement.” The Application Service Provider Agreement provided real estate brokers and other settlement service providers with access to Fidelity’s TransactionPoint closing software. TransactionPoint allowed real estate brokers and others to select real estate settlement service providers for a particular real estate transaction. The real estate brokerages would then enter into Sub-License Agreements with subsidiaries of Fidelity to enable Fidelity’s subsidiaries to be listed in TransactionPoint as a provider of settlement services.
The settlement said Fidelity’s subsidiaries would then in turn compensate the real estate brokerages a fee for each referral of real estate. Re-insider.com was the first to break this story and has extensive coverage on the topic for those who wish to learn more. It is important to note that HUD’s Settlement Agreement only applies to Fidelity and not to the real estate brokerages who recieved the kickbacks and illegal referrals fees so it is possible that more settlements will be announced as it pertains to those companies who recieved the kickbacks and improper referral fees.
The United States Supreme Court granted First American Financial Corporation’s Writ of Certiorari it filed in the Denise P. Edwards et al. v. First American Financial Corporation, et al. RESPA class action lawsuit today (June 20, 2011). The Supreme Court will now decide whether a plaintiff has standing to sue, on behalf of a nationwide class, when a plaintiff asserts that a real estate company violated the Real Estate Settlement Procedures Act of 1974 (RESPA) without showing the RESPA violation affected the services rendered.
The Edwards lawsuit accuses First American and others of operating an illegal kickback scheme which violated Section 8 of RESPA. The Supreme Court decision will focus strictly on Question 2 presented in the Writ of Certiorari. The issue presented in Question 2 is whether the a privte purchaser of real estate has standing to sue under Article III, Sec. 2 of the United States Constitution.
The case is First American Financial v. Edwards, 10-708.
The US Department of Housing and Urban Development’s (HUD) Real Estate Settlement Procedures Act (RESPA) Division released its latest RESPA ROUNDUP newsletter (Volume 5, April 2011). The newsletter asks and answers one question each on HUD-1 Line 803 tolerance violations, credit report charges, what happens if a loan originator fails to issue a Good Faith Estimate “GFE”, and clarifies 4506-T “Tax Transcript Fees” disclosure.
“Does zero tolerance for HUD-1 Line 803 (see “adjusted origination charges”; 24 CFR § 3500.7(e)(1)(iii)) mean that loan originators must double the cure of a tolerance violation of Line 801 or Line 802 because each tolerance violation on those Lines also results in an increase in the Adjusted Origination Charge on Line 803?
No. Correcting a Line 801 or Line 802 tolerance violation will serve to correct a tolerance violation that stems from the calculation of Line 803.
Loan originators should carefully monitor their own charges to avoid tolerance violations. However, if the loan originator fails to correct Line 801, 802 or consequently Line 803 tolerance violations before settlement, the loan originator can effectuate a cure within 30 days by listing and describing a credit in either the 200 Series on Page 1 or in a blank line in the 800 Series on Page 2. Whether the cure is shown in the 200 Series or 800 Series, the settlement agent should include a notation of P.O.C.(lender), to indicate that the lender has made a payment of a specified amount to correct a potential tolerance violation.
Whether the cure is shown in the 200 Series on Page 1 or the 800 Series on Page 2, a cure to correct a tolerance violation on Lines 801 and/or 802 will serve to correct the tolerance violation on Line 803.
“The regulations provide that the only charge that a loan originator may impose on a potential borrower before issuing a GFE is a charge limited to the cost of a credit report (see 24 CFR §§ 3500.7(a)(4) and (b)(4) “…the [loan originator] may, at its option, charge a fee limited to the cost of a credit report”). Only after a loan applicant both receives a GFE and indicates an intention to proceed with the loan covered by the GFE may the loan originator collect fees beyond the cost of a credit report.
For example, if the loan originator’s cost for a credit report is an $8.75 charge from a third party, the total amount that the loan originator can charge the borrower before the GFE is issued is $8.75. In this case, the actual charge of the credit report listed on Line 805 of the HUD-1 is $8.75.
Question #2: What if the Loan Originator fails to issue a Good Faith Estimate “GFE”?
If a loan originator fails to deliver a GFE in clear violation of 24 CFR § 3500.7(a) and (b), the loan originator will have significant potential tolerance violations at settlement. See RESPA § 3500.7(e).
Where the loan originator has not provided the consumer with a GFE, when completing the HUD-1 comparison chart the loan originator’s instructions to the settlement agent must indicate that the settlement agent must fill in the GFE columns with $0 and the HUD-1 columns with the actual charges from Page 2 of the HUD-1. If this results in one or more tolerance violations, the loan originator may cure the tolerance violation(s) by reimbursing the borrower the amount by which the tolerance was exceeded at settlement or within 30 calendar days after settlement.
As with other compliance areas, loan originators should adopt policies and procedures to ensure that GFEs are delivered timely, in accordance with the requirements of RESPA.
The fee for obtaining a tax transcript using IRS Form 4506-T, “Request for Transcript of Tax Return” is an administrative charge that is part of processing and underwriting that should be disclosed as part of Block 1, “Our Origination Charge,” on the GFE regardless of whether the charge is paid to a third party or directly to the IRS.
The United States Department of Treasury has hired Richard Cordray to lead the Enforcement Division of the Consumer Financial Protection Bureau (CFPB) which was created under the Dodd-Frank Bill. Richard Cordray was elected as the Ohio Attorney General in 2008. Cordray has filed numerous lawsuits during his tenure as the Ohio Attorney General, most notably against AIG, Marsh & McLennan, Bank of America, and Merrill Lynch which resulted in more than 2.5 billion dollars in settlements.
Given Cordray’s history it appears that he will be focusing on federal preemption of nationally chartered banks and the problems state regulators have had with their inability to enforce laws. The doctrine of preemption was used by the Office of Comptroller of the Currency as a way to stop states from enforcing rules and regulations against nationally chartered banks. He has pledged to jointly work with state attorney generals while at the CFPB in his investigations which could significantly hamper nationally chartered banks argument of federal preemption against state laws. Cordray and The American Bankers Association have opposing stances on the bank preemption issue. The underlying premise is that nationally chartered banks who engage in abusive and fraudulent tactics better be prepared for an onslaught of litigation and penalties when the enforcement team starts working with the states.
Richard Cordray’s reputation is that of a staunch advocate for consumer rights against financial services companies who break the law. Cordray is responsible for selecting the enforcement team and preparing for the exercise of enforcement powers. RESPA enforcement under Cordray appears to be a priority based on his past history and Section 6 of RESPA is a prime target for future regulatory enforcement action by the CFPB.
Posted in: Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU, GOOD FAITH ESTIMATE "GFE", HUD-1 Settlement Statement, MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), REGULATION Z, REQUIRED USE: Section 9 under the new RESPA rule, RESPA, RESPA LITIGATION, RESPA Marketing Agreements, RESPA Reform, RESPA SECTION 5: SPECIAL INFORMATIONAL BOOKLET, RESPA SECTION 6: LOAN SERVICING, RESPA SECTION 8: ILLEGAL KICKBACKS & REFERRAL FEES, RESPA SECTION 8(b): UNEARNED FEES, RESPA SECTION 9: REQUIRED USE, RESPA VIOLATIONS, RESPA: HOME WARRANTY COMPENSATION, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: SHAM JOINT VENTURE GUIDELINES, RESPA: YIELD SPREAD PREMIUM, THE CONSUMER FINANCIAL PROTECTION AGENCY (CFPA), TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"
The National Association of Realtors (NAR) and the Department of Housing and Urban Development (HUD) collaborated to produce a series of videos on YouTube.com which are geared at educating future home buyers on the real estate buying process. The joint effort was unveiled at the National Association of Realtors 2010 National Conference in New Orleans last week.
The first 10 minute video “Shopping for your home” features HUD associate deputy assistant secretary Teresa Baker Payne explaining the home buying process.
Posted in: Affiliated Business Disclosure Form, CONSUMER FINANCIAL PROTECTION BUREAU: RESPA, Federal Housing Administration FHA, GOOD FAITH ESTIMATE "GFE", HUD-1 Settlement Statement, MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA), REGULATION Z, REQUIRED USE: Section 9 under the new RESPA rule, RESPA, RESPA Reform, RESPA SECTION 5: SPECIAL INFORMATIONAL BOOKLET, RESPA SECTION 9: REQUIRED USE, RESPA: SECTION 10 ESCROW ACCOUNTS, RESPA: YIELD SPREAD PREMIUM, THE CONSUMER FINANCIAL PROTECTION AGENCY (CFPA), TRUTH IN LENDING ACT and YIELD SPREAD PREMIUM "YSP"

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