Today the Consumer Financial Protection Bureau (CFPB) issued an interim final rule supporting the Centers for Disease Control and Prevention’s (CDC) temporary eviction moratorium. The CDC’s temporary eviction moratorium has been extended through June 30, 2021 based on the current and projected epidemiological context of SARS-CoV-2 transmission throughout the United States. The CDC order generally prohibits landlords from evicting tenants for non-payment of rent if the tenant submits a written declaration that they are unable to afford full rental payments and would likely become homeless or have to move into a shared living setting. This prohibition applies to an agent or attorney acting as a debt collector on behalf of a landlord or owner of the residential property.
Continue Reading The CFPB Issues Interim Final Rule Clarifying that Tenants Can Hold Debt Collectors Accountable for Illegal Evictions

On April 5th, the CFPB proposed a set of rule changes intended to prevent foreclosures as emergency federal foreclosure protections expire this summer. Given that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain, the proposed rules seek to ensure that servicers and borrowers work together to prevent foreclosures.

The proposed rules intend to:

  1. Give borrowers time: The proposed rules provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021.
  2. Give servicers options: The proposed rules permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application. This provision would only be available for modifications that do not increase a borrower’s monthly payment and that extend the loan’s term by no more than 40 years from the modification’s effective date.
  3. Keep borrowers informed: The proposed rules provide temporary changes to certain required servicer communications to make sure that borrowers receive key information about their options at the appropriate time.


Continue Reading CFPB Proposes Mortgage Servicing Rule Changes to Prevent Foreclosures

The CFPB issued a compliance bulletin on April 1st warning mortgage servicers to take all necessary steps to prevent a wave of foreclosures this fall. The CFPB advised that beginning with the expiration of the federal foreclosure moratoriums at the end of June 2021, mortgage servicers will need ramped-up capacity to reach out and

As the government revives its Paycheck Protection Program (PPP) with hundreds of billions of dollars in additional loans available to small businesses, there are fresh signs that government fraud investigations and whistleblower litigation related to the loan program are ramping up. DOJ’s first-ever settlement of violations of the civil False Claims Act related to the

The Small Business Administration (SBA) announced that they will begin accepting loan applications from community financial institutions for new “first draw” Paycheck Protection Program (PPP) loans beginning on January 11 and for “second draw” PPP loans beginning on January 13. Other lenders will be allowed to submit loan applications shortly thereafter.

New guidance and loan

The Consumer Financial Protection Bureau (CFPB) released two final rules amending the General Qualified Mortgage loan definition in Regulation Z and creating a new “Seasoned QM” loan category in Regulation Z. The General QM Final Rule replaces the current requirement for the General QM loans that the consumer’s debt-to-income ratio (DTI) not exceed 43 percent

The Consumer Financial Protection Bureau (CFPB) announced today that it has entered into a settlement with Nationstar Mortgage, LLC, d/b/a “Mr. Cooper,” one of the nation’s largest mortgage servicers and the largest non-bank mortgage servicer in the United States. The bureau’s complaint claims that Nationstar engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010, violated the Real Estate Settlement Procedures Act (RESPA), and violated the Homeowners Protection Act of 1998 (HPA).

The bureau alleges that from January 2012 through December 2015, Mr. Cooper violated multiple federal consumer financial laws, causing substantial harm to the borrowers whose mortgage loans it serviced, including distressed borrowers. Specifically, the bureau claims that Nationstar (1) failed to identify thousands of loans on its systems that had pending-loss mitigation applications or trial-modification plans, and as a result failed to honor borrowers’ loan modification agreements; (2) foreclosed on borrowers to whom it had promised it would not foreclose while their loss mitigation applications were pending; (3) improperly increased borrowers’ permanent, modified monthly loan payments; (4) failed to timely disburse borrowers’ tax payments from their escrow accounts; (5) failed to properly conduct escrow analyses for borrowers during their Chapter 13 bankruptcy proceedings; and (6) failed to timely remove private mortgage insurance from borrowers’ accounts.
Continue Reading Consumer Financial Protection Bureau And Multiple States Enter Into Settlement With Nationstar Mortgage, LLC For Alleged Unlawful Servicing Practices

The Consumer Financial Protection Bureau (CFPB) recently issued a proposed rule to create a new category of Seasoned Qualified Mortgages (QMs). The proposal seeks to “encourage safe and responsible innovation in the mortgage origination market” by allowing an alternative pathway to the qualified mortgage safe harbor.

By way of background, the Dodd-Frank Act amended the Truth in Lending Act (TILA) to establish ability-to-repay (ATR) requirements for most residential mortgage loans. TILA specifies the factors a creditor must consider in making a reasonable and good-faith assessment of a consumer’s ATR. TILA also defines qualified mortgages as a category of loans that are presumed to comply with the ATR requirements. Regulation Z, TILA’s implementing regulation, requires creditors to make a reasonable good-faith determination of a consumer’s ability to repay any residential mortgage loan, and loans that meet Regulation Z’s requirements for QMs must obtain certain protections from liability.
Continue Reading The CFPB Proposes to Create a New Category of Seasoned Qualified Mortgages

The Consumer Financial Protection Bureau (CFPB) recently proposed certain amendments to the General Qualified Mortgage (QM) definition in Regulation Z and issued a filing rule extending the expiration of the Government-Sponsored Enterprise (GSE) Patch as a “temporary qualified mortgage” until the mandatory compliance date of the final amendments to the General QM loan definition.

By way of background, the Dodd-Frank Act amended the Truth in Lending Act (TILA) to establish ability-to-repay (ATR) requirements for most residential mortgage loans. TILA specifies the factors a creditor must consider in making a reasonable and good-faith assessment of a consumer’s ATR. TILA also defines qualified mortgages as a category of loans that are presumed to comply with the ATR requirements. Regulation Z, TILA’s implementing regulation, requires creditors to make a reasonable good-faith determination of a consumer’s ability to repay any residential mortgage loan, and loans that meet Regulation Z’s requirements for QMs must obtain certain protections from liability.
Continue Reading The CFPB Proposes Amendments to the Qualified Mortgage Definition in Regulation Z and Extends the GSE Patch