Loan Servicer

News & Analysis as of

Second Federal Circuit Court Refuses To Enforce Arbitration By South Dakota Tribe

Using a different analysis, but reaching the same result as a recent decision from the Seventh Circuit, the Eleventh Circuit agreed that a defendant could not compel arbitration of consumer claims before the Cheyenne River...more

Eleventh Circuit Refuses To Compel Arbitration In Dispute Between Loan Servicer and Borrower

On October 2, the Eleventh Circuit affirmed a district court’s decision refusing to compel arbitration sought by a servicer in a dispute with a borrower over the terms of a loan agreement. Inetianbor v. Cashcall, Inc. No....more

Fannie Mae Authorizes Servicers To Waive Deficiency Judgment Rights, Announces Other Servicing Policy Updates

On September 8, Fannie Mae advised in Servicing Guide Announcement SVC-2014-16 that servicers now have discretion to waive Fannie Mae’s deficiency judgment rights if doing so will help resolve foreclosure delays based upon...more

Rohit Chopra from CFPB focuses on student loan modifications at ABA Consumer Financial Services Committee program in Chicago

I attended a program this morning entitled “All I Need to Know I Learned from the Government: A Look at the Regulatory and Enforcement Landscape for Student Lending.” Among the panelists was Rohit Chopra. Rohit serves as an...more

Rhode Island Adds Loan Servicer Licensing, Other Requirements

On July 8, Rhode Island Governor Lincoln Chafee signed HB 7997, which extends the state’s licensing requirements to include companies servicing a loan, directly or indirectly, as a third-party loan servicer. Under the...more

SunTrust Settles with DOJ for US$968 Million

On June 17, the United States Department of Justice announced a US$968 million settlement with SunTrust Mortgage Inc. Other parties to the settlement are the Department of Housing and Urban Development, the Consumer Financial...more

Loan Servicer Properly Identified as Party with Authority To Negotiate Mortgage Terms in Foreclosure Notice, Georgia Court Holds

A recent decision by the Georgia Court of Appeals helps to add further clarity to the state’s foreclosure notice statute. The statute, which was amended in 2008, requires that the written notice of a foreclosure sale “shall...more

Louisiana Requires Mortgage Loan Servicers To Obtain License

On May 29, Louisiana Governor Bobby Jindal signed HB 807, which requires companies that service mortgage loans in the state to obtain a state license. The bill amends the state’s Residential Mortgage Lender Law to require a...more

Senate Committees Hold Hearings on Student Loans

In the wake of recent focus on student loan debt, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on the “Student Loan Servicing: the Borrower’s Experience.” The concern shown in some testimony at...more

Fannie Mae Updates Unemployment Forbearance Policies

On June 4, Fannie Mae issued Servicing Guide Announcement SVC-2014-10, which updates policies related to unemployment forbearance. The announcement states that, effective immediately, a servicer may approve a borrower for the...more

Claims Against Loan Servicer And Force-Placed Insurer Alleging Commission And Reinsurance Kickback Scheme Survive Dismissal

A putative class action involving force-placed home insurance and an alleged scheme for mortgage lenders to obtain kickbacks in the form of commissions, reinsurance premium, and other fees, has survived a motion to dismiss. ...more

Has the SCRA been amended for everyone?

Not only student loan servicers, but all companies, particularly those subject to the CFPB’s supervisory authority, face new compliance risk under the Servicemembers Civil Relief Act (the “SCRA”) as a result of the stunning...more

Cordray stresses individual accountability and service provider oversight in remarks to Chicago Fed

In remarks to the Chicago Federal Reserve Bank on May 9, Director Cordray outlined the past and future of the Bureau’s enforcement efforts. Director Cordray’s theme was to outline Bureau expectations in what he calls a “new...more

Fair Servicing: Regulators Watch for Discrimination by Servicers

Federal regulators delivered that message in October 2013, reminding loan servicers that they are subject to fair lending liability and must manage their fair lending risks. The regulators’ message concerning “fair servicing”...more

Federal Preemption Does Not Preclude State Law Claim Based on Alleged HAMP Violations, Minnesota Supreme Court Holds

The Supreme Court of Minnesota last week reversed the dismissal of a borrower’s action against a loan servicer arising out of the servicer’s alleged breach of its Servicer Participation Agreement (SPA) with Fannie Mae under...more

CFPB supervision of student loan servicers to begin March 1

Later this week, on March 1, the CFPB’s final rule defining larger participants of the student loan servicer market becomes effective. We expect the CFPB to immediately begin examining entities that qualify as larger...more

CFPB’s Private Student Loan Payment Report Serves as a Guide to Preemptively Revising Loan Payment Policies

The CFPB released its student loan ombudsman report analyzing complaints that the CFPB received from private student loan borrowers. In its second annual review of student loan practices, the CFPB reported that lenders make...more

E.D.N.C. Bankruptcy Court Rules that Borrower Can Raise Unfair and Deceptive Trade Practices Claims Against Lender Based on...

Does a lender have a duty to act in good faith when negotiating with a borrower during a commercial loan modification? In an order issued recently by the United States Bankruptcy Court for the Eastern District of North...more

Massachusetts Amends Debt Collector and Third-Party Loan Servicer Regulations

The Massachusetts Division of Banks recently amended 209 CMR 18, "Conduct of the Business of Debt Collectors and Loan Servicers." The final amended regulations clarify and establish new standards of conduct for debt...more

CFPB Seeks Information from Private Student Loan Servicers

The CFPB announced that it is soliciting information from private student loan servicers on the options available to borrowers seeking to make extra payments on their student loans. Specifically, the CFPB is seeking input...more

CFPB asks private student loan servicers for information on handling extra payments

The CFPB recently sent a letter to private student loan servicers asking them for information about their practices for handling extra payments from borrowers (i.e., payments in excess of the minimum amount due). This past...more

CFPB Settles With Mortgage Company, Senior Executives Over Alleged Loan Officer Compensation Practices

On November 7, the CFPB announced it reached a settlement with a mortgage company and two of its executives accused of using compensation to incentivize loan officers to steer consumers into costlier mortgages. The proposed...more

Final student loan servicer “larger participant” rule expected by year end

In remarks to the National Council of Higher Education Loan Resource’s “2013 Knowledge Symposium” held this week in St. Pete Beach, Florida, Rohit Chopra, the CFPB’s Student Loan Ombudsman, indicated that the CFPB’s final...more

Students, Loan Servicers And The Servicemembers Civil Relief Act

Over the past two years, mortgage loan servicers have faced an onslaught of regulatory scrutiny, enforcement actions and targeted litigation. The Department of Justice, state attorneys general and the federal banking...more

D.C. Circuit Halts Department of Labor's Reclassification of Loan Officers

The D.C. Circuit Court of Appeals on Wednesday handed the Mortgage Bankers Association a huge win by refusing to grant a full court review of a panel decision that struck down a 2010 U.S. Department of Labor (DOL)...more

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