Category Archives: Mortgage Servicing

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Eleventh Circuit Holds Plaintiffs Must Have Incurred Concrete Injury for Article III Standing to Sue under FDCPA

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from using “false, deceptive, or misleading representation[s]” in connection with collecting debts. If a debt collector violates the FDCPA, the debt collector may be liable in the amount of the actual damages incurred by a debtor resulting from the FDCPA violation. Further, additional … Continue Reading

New Mortgage Licensing Requirements Come to the West

During this pandemic, both Idaho and South Dakota have been busy adding new mortgage licensing requirements. As discussed below, these new licensing requirements will materially impact mortgage lenders and servicers doing business in these states. Idaho Earlier in 2020, Idaho passed H0401, which amended the definition of “mortgage lender” to include mortgage companies that engage … Continue Reading

Oregon Passes Mandatory Forbearance Law

On June 30, 2020, Oregon joined D.C., Massachusetts, and New York in passing state-specific COVID-19 mortgage assistance programs into law. This new law further confuses the patchwork quilt of compliance issues for mortgage lenders and servicers. Oregon also became the first state to create an express cause of action allowing borrowers to enforce the state … Continue Reading

Credit Reporting During the COVID-19 Outbreak: CFPB Issues FAQs for CARES Act Requirements

The CFPB recently issued its “Consumer Reporting FAQs Related to the CARES Act and COVID-19 Pandemic,” addressing 10 credit reporting issues. While the FAQs provide some much-needed clarity for furnishers of information and credit reporting agencies, the CFPB left some significant questions unanswered. Below we breakdown highlights of the FAQs: Several of the FAQs — … Continue Reading

CFPB Issues Interim Final Rule to Enable COVID-19 Payment Deferral Options

On May 14, 2020, shortly after the Fannie Mae and Freddie Mac COVID-19 payment deferral options were announced, we warned mortgage servicers about the legal risks associated with offering payment deferral programs to borrowers impacted by COVID-19. A little over a month later, on June 23, 2020, the Consumer Financial Protection Bureau (CFPB) released an … Continue Reading

New York Passes Mandatory Forbearance Law, Inviting Potential Constitutional Challenge

On June 17, New York Gov. Andrew Cuomo signed one of the most far-reaching COVID-19 mortgage assistance state programs yet into law. Affected servicers and lenders will soon need to decide whether they should find a way to comply, or bring a constitutional challenge. The new law mandates that New York-regulated banking organizations and mortgage … Continue Reading

CFPB Issues No-Action Letter Template for an Online Loss Mitigation Platform

On May 22, 2020, the CFPB issued a No-Action Letter (NAL) Template to a software company utilizing an internet-based platform for submission and processing of loss mitigation applications. Mortgage servicers may use the NAL Template to apply for NALs if they wish to implement the web-based loss mitigation platform. The CFPB also issued a statement … Continue Reading

Can Mortgage Servicers Legally Offer the GSEs’ COVID-19 Payment Deferral Options?

On Wednesday, May 13, 2020, Fannie Mae and Freddie Mac unveiled new retention workout options that were jointly developed and “specifically designed to help borrowers impacted by a hardship related to COVID-19 return their mortgage to a current status.” The government-sponsored enterprises’ (GSEs) highly anticipated new COVID-19 payment deferral will allow servicers to defer up … Continue Reading

A Good Day for Lenders: Texas Supreme Court Rules that Lenders Still Entitled to Equitable Subrogation for Non-compliant Home Equity Loans

On April 24, 2020, the Texas Supreme Court upheld a lender’s right to equitable subrogation for non-compliant home equity loans, ruling that lenders who fail to cure within the statutorily mandated 60-day period may recoup funds paid to satisfy prior liens. The court’s opinion in Federal Home Loan Mortgage Corp. v. Zepeda answered a certified … Continue Reading

Individual Employs New Small Business Bankruptcy Law to Modify Mortgage

Small businesses often struggle to reorganize in bankruptcy. To address this issue, Congress passed the Small Business Reorganization Act of 2019 (the SBRA). The SBRA took effect in February 2020 and makes small business bankruptcies faster and less expensive. The recent case of In re Ventura, 2020 WL 1867898 (E.D.N.Y. Apr. 10, 2020) addresses many … Continue Reading

FHFA Announces COVID-19 Forbearance Relief for Mortgage Servicers

In a statement released on April 21, 2020, the Federal Housing Finance Agency (FHFA) announced that mortgage servicers would only be required to advance four months of missed payments for Fannie Mae and Freddie Mac owned loans on CARES Act forbearance plans. After that four-month period, FHFA explained the servicers would be under “no further … Continue Reading

Having Trouble with CARES Act Forbearances in Ch. 13 Bankruptcy? You’re Not Alone!

Guest Author: Karlene A. Archer of Karlene A. Archer Law P.L.L.C. Consumers that have pending Chapter 13 bankruptcy cases undoubtedly suffered from financial hardship prior to the COVID-19 pandemic. For many of those consumers, the pandemic may have exacerbated that hardship. The CARES Act’s mortgage forbearance provisions allow some breathing room for consumers that anticipate … Continue Reading

Ginnie Mae Announces PTAP Assistance for Issuers

In an All Participants Memo dated April 10, 2020 (APM 20-03), Ginnie Mae announced that it revised and expanded its issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide) to include a Pass-Through Assistance Program (PTAP) in response to the COVID-19 national emergency declaration. The program announced in APM 20-03 … Continue Reading

Federal Financial Agencies Announce Flexibility in Enforcing Certain Mortgage Servicing Rules in Response to COVID-19

On Friday, April 3, the Consumer Financial Protection Bureau (CFPB), Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC) and the State Banking Regulators released a joint statement announcing increased flexibility in the agencies’ regulation … Continue Reading

Foreclosure in the Times of COVID-19: Some Texas Counties Halt Foreclosures for April Amid Coronavirus Concerns

Many of Texas’ largest counties have suspended foreclosures for the month of April amid coronavirus (COVID-19) concerns, including the state’s two largest counties, Harris and Dallas. Texas Gov. Greg Abbott, however, has yet to issue an executive order or make a general proclamation cancelling all foreclosures statewide. Likewise, the Texas Supreme Court has also declined … Continue Reading

CFPB Offers Flexibility for Responding to Credit Reporting Disputes During COVID-19 Pandemic — But Private Litigants May Not

The CFPB’s April 1, 2020, statement regarding credit reporting for loans affected by COVID-19 announced a “flexible supervisory and enforcement approach during this pandemic.” In addition to guidance regarding furnishing obligations while consumers are impacted by COVID-19, the bureau specifically announced relaxed enforcement standards for companies struggling to respond to consumer credit disputes within the … Continue Reading

Credit Reporting Requirements and COVID-19 – CFPB and FHA Weigh In

We’ve been tracking regulatory developments related to credit reporting for loans where borrowers have been affected by the coronavirus outbreak. On April 1, the CFPB issued a statement about credit reporting for loans affected by COVID-19. The statement announces the CFPB’s “flexible supervisory and enforcement approach during this pandemic” and seeks to reassure credit reporting … Continue Reading

Coronavirus Economic Stabilization Act of 2020: Implications for Consumer Financial Services

On Friday, President Trump signed the Coronavirus Economic Stabilization Act of 2020 (CARES Act). The significant legislation directs more than $2 trillion into fighting the COVID-19 pandemic and stimulating America’s economy for the duration of the pandemic. This blog summarizes some of the provisions that are most relevant to financial institutions that make or service … Continue Reading

Federal Regulatory Agencies Offer Interagency Statement Regarding COVID-19-Related Loan Modifications and Status Reporting

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, and the Conference of State Bank Supervisors issued an Interagency Statement on March 22 urging regulated financial institutions to work with borrowers affected … Continue Reading

Fannie Mae and Freddie Mac Announce Relief Plan for Multifamily Borrowers

On Tuesday, Fannie Mae and Freddie Mac, in coordination with the Federal Housing Finance Agency, announced relief plans to discourage multifamily landlords from evicting renters from properties as a result of non-payment. In exchange, Fannie Mae and Freddie Mac are allowing multifamily landlords (whose loans are financed by Freddie or Fannie) to defer loan payments … Continue Reading

Updates from 12 State Regulatory Agencies Regarding Coronavirus and Related Work from Home Issues

As regulatory agencies provide guidance regarding working from home for financial services professionals while the COVID-19 outbreak progresses, we summarized the additional guidance issued in the recent past and current as of March 24, 2020. California Department of Real Estate Released Frequently Asked Questions Relating to COVID-19 The California Department of Real Estate’s Frequently Asked … Continue Reading

What Will COVID-19 Relief Look Like and How Will It Affect Financial Services Companies?

Both parties have recognized the need for significant and immediate relief to assist consumers and small businesses affected by COVID-19. On March 18, 2020, Rep. Maxine Waters (D-CA), the chairwoman of the House Financial Services Committee, released plans for responding to the COVID-19 pandemic. At this point, the plans are merely a high-level list of … Continue Reading

COVID-19 and the Mortgage Industry: 7 Things We Know Today

Operating a financial institution is always a challenge, but the COVID-19 outbreak has triggered a unique set of overlapping and sometimes conflicting concerns for mortgage originators and servicers. Here is what we know as of March 20: On March 18, 2020, HUD issued Mortgagee Letter 2020-04, announcing a 60-day moratorium for foreclosures and evictions, effective … Continue Reading

Mortgage Servicing Compliance Challenges Associated with Verbal Loss Mitigation Applications, Short-Term Repayment and Forbearance Plans Will Be Amplified by COVID-19

While paying attention to the CFPB’s guidance in its Supervisory Highlights reports is always important, in the midst of the COVID-19 pandemic it is now critical that mortgage servicers be mindful of the loss mitigation violations that were described in the Winter 2020 edition. In its Winter 2020 Supervisory Highlights report, the CFPB described several … Continue Reading
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