On July 10, the CFPB announced proposed rules for mortgage servicers, aimed at helping homeowners avoid foreclosures. The new rules, which would modify RESPA and Regulation X’s existing mortgage servicing framework, are designed to streamline the process for obtaining mortgage assistance, and incentivize servicers to prioritize borrower aid over foreclosure.Continue Reading CFPB Proposes Revamped RESPA Mortgage Servicing Rules

On May 23, the U.S. Department of Housing and Urban Development (HUD) announced that Federal Housing Administration-approved Mortgagees are subject to a heightened cybersecurity incident reporting regime. The new requirement, which amends the Single Family Housing Policy Handbook 4000.1, requires FHA-approved Mortgagees to report “suspected” “Significant Cybersecurity Incidents” within 12 hours of detection. Continue Reading FHA’s Releases 12-Hour Cyber Incident Notification Rule

On May 16, the CFPB filed a motion for summary judgement in the U.S. District Court in the Southern District of Florida seeking a $20 million civil penalty against a California-based mortgage provider for allegedly submitting inaccurate government mortgage loan data.Continue Reading CFPB Files Motion for Summary Judgment on HMDA Enforcement Action

On April 26, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2024-06, announcing changes to the Home Equity Conversion Mortgages (HECMs) for purchases (H4P loans), a mortgage program designed for older homeowners who wish to buy a primary residence using a reverse mortgage. The program allowed seniors to purchase a new home that better suits their needs without the burden of monthly mortgage payments.Continue Reading HUD Updates Home Equity Conversion Rules for Purchases

In an April 16 unpublished opinion, the U.S. Ninth Circuit Court of Appeals affirmed the Bankruptcy Appellate Panel’s earlier decision finding that a mortgage lender not licensed in California violated the state’s usury law when it extended the term of the loan and lowered the borrower’s interest rate on a broker-arranged mortgage loan that it owned. Continue Reading Ninth Circuit Holds Loan Modification Made By Unlicensed Lender Violates State Usury Law

On January 11, 2024, an administrative law judge for the NLRB issued an opinion holding that the employment agreement used by a major mortgage lender for all of its approximately 6,000 employees violates the National Labor Relations Act (NLRA). The mortgage lender’s standard employment contract included provisions that: 1) restricted disclosure of confidential information; 2) governed the use and return of company property, information, and communications; and 3) required that certain disputes be resolved through arbitration. Many of these provisions are common in employment agreements between lenders and their employees. Nevertheless, the ALJ found that parts of these provisions violated the NLRA because they had a reasonable tendency to interfere with, restrain, or coerce an employee contemplating engaging in activity protected by the statute.Continue Reading NLRB Finds Common Provisions in Mortgage Lender Employment Contract Illegal

On September 27, the CFPB released its annual report on residential mortgage lending activity and trends for 2022. Under the Home Mortgage Disclosure Act (HMDA), the CFPB requires financial institutions to collect and provide loan-level information on mortgage loan applications and originations. Not surprisingly given the dramatic rise in interest rates last year, the report found that overall affordability is declining, that borrowers spent more of their income on mortgage payments, that loan fees increased dramatically due primarily to many borrowers electing to buy down their interest rate by paying discount points, and that lenders more often denied applications for insufficient income.Continue Reading CFPB 2022 Loan Data: Decrease in Originations; Increase Loan Payments, Fees

On April 26, 2023, the CFPB issued an advisory opinion, which reiterated that the FDCPA and Regulation F prohibit certain debt collectors from suing to collect on debt or threatening to foreclose on homes with mortgages past the statute of limitations, or “time-barred” debt. Such guidance is a result of actions by certain debt collectors to foreclose on silent second mortgages, referred to as “zombie mortgages,” that consumers thought had been satisfied and that are likely not enforceable in court.Continue Reading CFPB Issues Guidance to Protect Homeowners from Zombie Mortgages

On February 27, the California Department of Financial Protection and Innovation (DFPI) issued new guidance with respect to the performance of remote work by mortgage loan originators (MLOs) working for licensees under the California Residential Mortgage Lending Act (California Financial Code Sections 50000 et seq., the “CRMLA”). The CRMLA does not expressly prohibit employees of a licensee from working at a remote location, such as an employee’s home. A licensee may authorize an employee to perform limited functions at a remote location that is not considered a branch office, provided that the location does not have the indicia of a branch office and is not advertised to the public as a business location. However, the guidance noted that a branch manager must continue to supervise employees who are working remotely, and that the DFPI will continue to examine the supervisory activities of a branch manager to ensure that the branch manager is adequately supervising each MLO and employee regardless of whether they are working at a remote location or a branch office.Continue Reading California DFPI Publishes New Guidance on Remote Work by MLOs

On March 9, the FTC unanimously voted to block the proposed merger between the nation’s largest provider of home mortgage loan origination systems (LOS) and other key lender software tools, and its top competitor that offers the same services. In its complaint, the FTC alleged that one company owns the country’s dominant LOS platform, while the other company owns and operates the second-largest platform. In a press release announcing the administrative complaint, the FTC stated that the deal “would drive up costs, reduce innovation, and reduce lenders’ choices for tools necessary to generate and service mortgages.”Continue Reading FTC Seeks to Block Deal Between Top Mortgage Loan Technology Providers

On February 7, the CFPB issued an Advisory Opinion to address the applicability of RESPA section 8 to operators of certain digital technology platforms that enable consumers to comparison shop for mortgages and other real estate settlement services, including platforms that generate potential leads for the platform participants through consumers’ interaction with the platform. Continue Reading CFPB’s RESPA Advisory Addresses Digital Mortgage Comparison-Shopping Platforms, Lead Generation