Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Protection Bureau Law Blog

CFPB Law Blog

News and analysisi of the priorities, initiatives and regulatory actions and proceedings of the Consumer Financial Protection Bureau

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Showing 16 posts in Real Estate Settlement Procedures Act.

Lesson Learned from CFPB’s Actions against Banks Engaging in Illegal Marketing Services Kickback Scheme

Under Section 8 of the Real Estate Settlement procedures Act (RESPA), it is illegal for anyone to give or receive a fee, kickback or anything of value in exchange for referrals of settlement service business to a particular person or organization relating to a federal mortgage loan. Violations of this section of RESPA are subject to civil and criminal penalties which could be assessed in the form of a fine, imprisonment or both. Read More ›

Eighteen Months after Bulletin 2013-01, CFPB Issues New Guidance on Mortgage Servicing Transfers

Mortgage servicers and subservicers should consider reviewing the August 19, 2014 bulletin from the Consumer Financial Protection Bureau (CFPB) on mortgage servicing transfers to ensure compliance with the most up-to-date guidance.  This bulletin replaces the February 2013 bulletin on the same topic, incorporating the January 10, 2014 revisions to Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA).  For servicers who have fully implemented the CFPB’s February 2013 guidance and the new servicing rule, we do not expect the information in the new bulletin to require significant changes to policies and practices.  Rather, the bulletin may provide a useful set of benchmarks and reminders.  Read More ›

CFPB Publishes Guide to the TILA-RESPA Loan Estimate and Closing Disclosure Forms

The Consumer Financial Protection Bureau (CFPB) on April 17, 2014 announced the release of a Guide to Completing TILA-RESPA Integrated Disclosure Forms (the Forms Guide). The CFPB states that the purpose of the Forms Guide is to provide instructions for completing the two new integrated TILA-RESPA disclosure forms, the Loan Estimate and Closing Disclosure, and to highlight common situations that may arise when completing the forms. Additionally, as the changes related to the TILA-RESPA Integrated Disclosure Rule may take time, resources, and planning to execute, the CFPB hopes the Forms Guide will help identify some of the necessary changes that may need to be implemented by organizations involved in the origination of closed-end residential mortgage loans. Settlement service providers, software providers, and other companies that serve as business partners to creditors may also find the Forms Guide helpful  Read More ›

CFPB Releases Small Entity Compliance Guide for TILA-RESPA Integrated Disclosure Rule

In late March, the Consumer Financial Protection Bureau (CFPB) issued a  Small Entity Compliance Guide (Guide) for the TILA-RESPA Integrated Disclosure Rule (TILA-RESPA Rule). In compliance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, the CFPB has issued the guide to help small businesses comply with the TILA-RESPA Rule, which is effective August 1, 2015. Read More ›

CFPB Enforces RESPA Referral Prohibition Against Mortgage Lender

On January 16, 2014, Director Richard Cordray and the CFPB announced the entry of a Consent Order involving a mortgage lender, Fidelity Mortgage Corporation (FMC), and its President for alleged violations of Section 8 of the Real Estate Settlement Procedures Act (RESPA).  Although FMC and its President neither admit nor deny the CFPB's allegations, the Consent Order entered against the company and its President are instructive of potential future actions by the CFPB in connection with purported RESPA violations.  Moreover, since the CFPB recently took action under RESPA against two other third parties, a law firm and a home builder, we believe this action signals that the CFPB intends to actively police for RESPA enforcement.   Read More ›

CFPB Publishes New Mortgage Disclosure Forms

On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued a 1,887 page rule requiring mortgage lenders to use two new disclosures when making mortgage loans to consumers.  The new forms are a "Loan Estimate," which replaces the preliminary Truth-in-Lending Disclosure Statement and Good Faith Estimate, and a "Closing Disclosure," which replaces the final Truth-in-Lending Disclosure Statement and HUD-1 Settlement Statement.  Mortgage lenders must use the new forms by August 1, 2015. Read More ›

CFPB Publishes Two More Small Entity Compliance Guides

Adding to its growing library of Small Entity Compliance Guides, on June 7, 2013, the Bureau of Consumer Financial Protection (“CFPB”) released guidance on the revised Regulation Z (TILA) Loan Originator Rule and the new Mortgage Servicing Rules under Regulation Z (TILA) and Regulation X (RESPA). The rules were issued in January 2013, and compliance with the rules becomes mandatory on January 10, 2014. As with previous Small Entity Compliance Guides published by the CFPB, the latest publications will be useful tools to mortgage lenders and servicers of all sizes. Read More ›

Private Mortgage Insurance: Does the CFPB’s Latest Enforcement Action Effectively Regulate Captive Reinsurance Out of Existence?

Today (4/4/13), the CFPB announced enforcement actions against, and settlements with, four mortgage insurers involving what “the Bureau believes to be improper kickbacks paid by mortgage insurers to mortgage lenders in exchange for business.” The CFPB alleges that, in exchange for business referrals, the four insurers—Genworth U.S. Mortgage Insurance Corporation, United Guaranty Corporation, Radian Guaranty Inc., and Mortgage Guaranty Insurance Corporation—violated RESPA by providing kickbacks to lenders in connection with the purchase of captive reinsurance, which the CFPB claims were designed to help lenders obtain greater profits. The CFPB contends these captive reinsurance deals violated RESPA because the projected value of the reinsurance was less than the reinsurance premiums paid by mortgage insurers to the reinsurer. Under the terms of the proposed consent orders filed with the United States District Court for the Southern District of Florida, the mortgage insurers will: (i) pay a collective $15 million in penalties to the CFPB; (ii) cease the paying “illegal kickbacks”; (iii)  not enter into new captive mortgage reinsurance arrangements with affiliates of mortgage lenders; and (iv) submit to compliance monitoring and reporting.  Read item (iii) carefully:  All four companies agreed that they would NEVER AGAIN enter into captive mortgage reinsurance arrangements with mortgage lenders.   Read More ›

CFPB Issues New National Mortgage Servicing Rules

Today, the Consumer Financial Protection Bureau (CFPB) issued the expected mortgage servicing final rules. At over 1,000 pages, the final rules will amend the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). Consistent with the Bureau’s proposal, the rules cover nine major topics and implement the mortgage servicing  provisions of Title XIV of  the Dodd-Frank Act. The rules, which will take effect on January 10, 2014, directly implement Congressionally-mandated servicing reforms but also include a host of required loss mitigation rules and processes. The CFPB promulgated these latter rules by way of its general rulemaking authority under RESPA provided in the Dodd-Frank Act, not pursuant to specific Dodd-Frank statutory provisions. In prepared remarks for today’s field hearing in Atlanta,  CFPB Director Cordray emphasized that these new rules are not only mandatory for mortgage servicers (with limited exceptions for smaller servicers), but “are backed by the full supervisory and enforcement authority that Congress has conferred upon [the CFPB].”  Read More ›

CFPB Refuses To Modify Civil Investigative Demand—Issues Warning To Other Financial Institutions

In an action that will come as a surprise to no one, CFPB Director Cordray has refused to modify or set aside a Civil Investigative Demand (CID) issued by the CFPB to PHH Corporation (PHH), a leading non-depository mortgage services provider. The CFPB served the CID in May 2012 in connection with its investigation to “determine whether mortgage lenders and private mortgage insurance providers or other unnamed persons have engaged in, or are engaging in, unlawful acts or practices in connection with residential mortgage loans in violation of the [Consumer Protection Act] and [the Real Estate Settlement Procedures Act].” PHH objected to the CID as overly broad,  unreasonable and irrelevant. Read More ›