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In January 2025, the Maryland Office of Financial Regulation (the “OFR”) issued a guidance stating that assignees of residential mortgage loans, including certain passive trusts, were required to hold a Maryland mortgage lender license and, in certain circumstances, an installment loan license (previously discussed here). In response to this, the Maryland House and Senate passed separate but identical bills known as the Maryland Secondary Market Stability Act of 2025 (the “Act”). The Act was signed into law by Maryland Governor Wes Moore on April 22, and became effective immediately. Continue Reading Maryland Enacts Law Exempting Passive Trusts from Mortgage and Installment Loan Licensing Requirements

On March 26, the CFPB filed a motion to vacate its recent settlement against an Illinois-based mortgage lender accused of engaging in discriminatory marketing practices in violation of the Equal Credit Opportunity Act (ECOA) and the Consumer Financial Protection Act (CFPA). The lawsuit, initially filed in 2020, alleged that the lender’s public radio advertisements and commentary discouraged prospective applicants in majority- and minority- Black neighborhoods from applying for mortgage loans.Continue Reading CFPB Moves to Vacate Redlining Settlement Against Illinois-based Mortgage Lender

On February 18, the Maryland Office of Financial Regulation (OFR) issued an alert to address industry concerns regarding its January guidance on licensing requirements for assignees of residential mortgage and installment loans. In response to market pushback, the OFR has proposed new legislation to exempt certain entities from licensing requirements and has extended the enforcement deadline to allow for further regulatory clarity.Continue Reading Maryland OFR Responds to Market Concerns Over Licensing Requirements for Mortgage and Installment Loan Assignees

California Assembly Bill 3108 became effective on January 1, 2025 and could conceivably make certain business purpose loans secured by owner-occupied property subject to mortgage fraud claims by the borrowers. The primary goal of the new law—passed unanimously by the State Assembly and nearly unanimously by the State Senate (with one apparent absentee)—is to protect borrowers from certain predatory practices by mortgage lenders and brokers. However, unintended consequences may arise.Continue Reading California AB 3108 Creates Potential Mortgage Fraud Issue for Lenders on Owner-Occupied Mortgage Loans Made for a Business Purpose

On January 17, 2025, the CFPB filed a complaint against an Illinois-based non-depository mortgage lender for allegedly engaging in discriminatory practices. The CFPB alleges the lender engaged in improper redlining by deliberately excluding certain neighborhoods from its services based on the racial and ethnic composition of those areas, in violation of the Equal Credit Opportunity Act (ECOA). Continue Reading CFPB Takes Action Against Illinois Mortgage Lender for Redlining Violations

Today, the Consumer Financial Protection Bureau (CFPB) issued a report, consumer advisory, and filed an amicus brief addressing the risks associated with home equity contracts (HECs)—financial products often marketed as home equity “investments.” The Bureau highlighted the high costs, complexity, and risks these products pose to homeowners, including the potential for financial distress and forced home sales if repayment obligations become unmanageable. The Bureau’s amicus brief, filed in a lawsuit currently ongoing in the United States District Court for the District of New Jersey, is discussed in detail below.Continue Reading CFPB Issues Warning on Risks of Home Equity Contracts, Takes Legal Action to Ensure Compliance with TILA

On January 7, 2025, the United States Department of Justice (the “DOJ”) announced that a non-depository mortgage lender has agreed to pay $1.75 million in connection with allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods.Continue Reading DOJ Announces Third Settlement with a Non-Depository Lender to Resolve Alleged Redlining Claims

On January 6, 2025, the CFPB filed a lawsuit against a non-bank manufactured home financing company for violations of the Truth in Lending Act and Regulation Z. The lawsuit alleges that the mortgage lender engaged in predatory lending practices by providing manufactured home loans to borrowers it knew could not afford them.Continue Reading CFPB Sues Mortgage Lender for Predatory Lending Practices in Manufacture Homes Loans

In a September 26 settlement, the Massachusetts Attorney General’s office reached an agreement with a mortgage loan servicer to resolve allegations of violations of Massachusetts consumer protection laws and the Truth in Lending Act.Continue Reading Massachusetts AG Reaches Settlement with Loan Servicer Over Improper Debt Collection Practices

On October 15, the CFPB and the DOJ announced a settlement against a large mortgage lender for its alleged discriminatory redlining practices against residents of majority-Black neighborhoods in the greater Birmingham, Alabama area in violation of the Fair Housing Act, the Equal Credit Opportunity Act, and Consumer Financial Protection Act. Redlining occurs when lenders discourage credit applications, deny equal access to home loans and other credit services in certain areas, or avoid providing home loans based on applicants’ protected class status, such as the race, national origin, or color of the residents of those areas.Continue Reading CFPB and DOJ Target Mortgage Lender for Alleged Discriminatory Redlining Practices