Mortgage Servicers

News & Analysis as of

RESPA Amendment Changes Rules, Deadlines Regarding Errors Communications

In July of 2010, the Real Estate Settlement Procedures Act (RESPA) was amended by Congress to reduce the time period from twenty days to five days for a servicer to acknowledge receipt of a qualified written request, and from...more

ABA seeks CFPB clarification of mortgage servicing rules

The American Bankers Association has sent a letter to the CFPB requesting several clarifications to the mortgage servicing rules. The ABA asks the CFPB to make the clarifications part of “regulatory guidance (or regulatory...more

Mortgage Servicers Face Consumer Lawsuits Under CFPB “Periodic Statement” Final Rule

The CFPB’s final rule amending Regulation Z, which implements the Truth in Lending Act (TILA) as amended by Dodd-Frank, became effective January 10. Among other things, the new rule requires mortgage servicers to provide...more

Inspector General Report Urges FHFA To Consider Lender-Placed Insurance Suits

On June 25, the FHFA Office of Inspector General (OIG) published a report that urges the FHFA to consider whether to pursue servicers and insurers for alleged lender-placed insurance (LPI) losses. The OIG cited prior...more

Second Circuit Affirms Dismissal Of RESPA Claims Based On Faulty QWR

On June 24, the U.S. Court of Appeals for the Second Circuit held that a borrower failed to state a claim under RESPA because her purported qualified written requests (QWRs) did not trigger the servicer’s RESPA duties. Roth...more

Freddie Mac Updates MERS Requirements, Fraud Reporting, Other Selling And Servicing Policies

On June 19, Freddie Mac issued Bulletin 2014-12, which updates and revises numerous selling and servicing requirements. According to the Bulletin, Freddie Mac has determined that because sellers/servicers will have difficulty...more

OIG Urges FHFA To Sue Over Force-Placed Insurance

The Office of Inspector General (“OIG”) for the Federal Housing Finance Agency (“FHFA”) is urging the FHFA to sue its servicers and lender-placed insurance (“LPI”) providers because Fannie Mae and Freddie Mac have suffered...more

Massachusetts AG Requires Mortgage Servicer To Provide Foreclosure-Related Relief

On June 16, Massachusetts Attorney General (AG) Martha Coakley announced that a large mortgage servicer agreed to provide $3 million in borrower relief and pay $700,000 to the Commonwealth to resolve allegations that the...more

Colorado Adds Mortgage Servicer Requirements

Recently, Colorado enacted legislation that requires servicers of residential loans, including lenders and other parties that offer a borrower a loss mitigation option or seek to enforce the power to foreclose and sell the...more

Navigating Foreclosure in States with 'One Action Rules'

Late last year, the New York Supreme Court decided 172 Madison (NY) LLC v. NMP Grp., LLC, in which it examined New York’s one-action rule, a complex and often misunderstood rule that can have huge implications for lenders...more

Illinois Federal Court Rules on Dodd-Frank’s Truth in Lending Act Amendment

The United States District Court for the Northern District of Illinois granted summary judgment denying a putative class action suit against a mortgage servicer for alleged violations of the Truth in Lending Act concerning...more

Freddie Mac Announces Numerous Servicing Policy Updates

On June 3, Freddie Mac announced revisions to numerous servicing policies, including policies regarding, among other things, short sales and deeds-in-lieu of foreclosure (DILs), the CFPB’s mortgage servicing rules, and...more

Financial Institutions and Creditors’ Rights: Ninth Circuit Finds SCRA Liability Based on Prior Servicer’s Actions

The Servicemembers Civil Relief Act (“SCRA”) was signed into law in 2003, greatly expanding prior legislation in order to better assist servicemembers in avoiding default and foreclosure while they are on active duty. The...more

Comptroller Curry: Check The Shadows For Banking Threats

Where are the seeds of the next financial crisis? - Speaking at the Conference of State Bank Supervisors, Comptroller of the Currency Thomas Curry discussed threats to the national banking system and warned listeners...more

The Consumer Financial Protection Bureau (CFPB): The New Federal Landscape For Lenders and Servicers

Following the recession and financial crisis of the late 2000s, the “Bureau of Consumer Financial Protection”—commonly known as the Consumer Financial Protection Bureau (CFPB)—was created. Aimed at promoting “fairness and...more

Illinois Federal Court Rejects Putative Class Challenge To Crediting Of Online Mortgage Payments

On May 27, the U.S. District Court for the Northern District of Illinois held that a mortgage servicer did not violate Regulation Z when it credited a payment two days after the borrower submitted the payment online....more

New York DFS Superintendent Promises Scrutiny Of Nonbank Servicer Affiliates, Previews Originator Licensing Changes

On May 20, New York DFS Superintendent Benjamin Lawsky spoke during the Mortgage Bankers Association’s National Secondary Market Conference and extended his recent focus on nonbank mortgage servicers....more

New York Department of Financial Services Plans to Expand Investigation of Nonbank Mortgage Servicers

In a speech delivered to the Mortgage Bankers Association 2014 National Secondary Market Conference, Benjamin M. Lawsky, Superintendent of New York’s Department of Financial Services, targeted nonbank mortgage servicers with...more

Fannie Mae Updates Delinquency Management, Default Prevention Policies

On May 16, Fannie Mae announced through Servicing Guide Announcement SVC-2014-07, that for a borrower who submits a complete Borrower Response Package (BRP) or incomplete documentation 37 days or less prior to a foreclosure...more

New York DFS: Nonbank Servicers Can Expect Increased Scrutiny

New York's top financial regulator plans to aggressively expand his agency’s investigation into nonbank servicers and the firms' affiliates that provide ancillary services. Speaking at the Mortgage Bankers Association's...more

CFPB Proposes Amendments to Mortgage Rules

On April 30th, the Consumer Financial Protection Bureau (CFPB) announced certain limited amendments to the Ability to Repay/Qualified Mortgage Rule (“ATR/QM”) and the Servicing Rules which took effect in January of this year....more

Federal District Court Rejects Putative Class Challenge To Servicer’s Compliance With IFR Order

On May 12, the U.S. District Court for the Western District of Kentucky held that it lacks jurisdiction to review allegations that a mortgage servicer operating under an OCC consent order was negligent in its maintenance of...more

Financial Stability Oversight Council’s Annual Report Highlights Problems with Non-Bank Mortgage Servicers

As required by Section 112(b)(2) of the Dodd-Frank Act, the Financial Stability Oversight Council released its 2014 Annual Report, which included, among other things, recommendations to address the risks posed by nonbank...more

CFPB Report Highlights Focus On Mortgage Servicing

Under Dodd-Frank, the CFPB supervises depository institutions and credit unions with total assets of more than $10 billion, as well as certain nonbanks, regardless of size, including mortgage companies, originators, brokers,...more

The False Conception That FCA Claims Are Not Covered

In 2013, the United States Department of Justice recovered $3.8 billion under the False Claims Act (“FCA”), bringing the total amount secured by the Justice Department since 2009 to $17 billion. Whistleblowers recovered...more

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