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

The Conference of State Bank Supervisors (CSBS) recently requested public comment on proposed regulatory prudential standards for nonbank mortgage servicers. The proposal seeks to address concerns about rapid market share growth, nonbank institution size, and nonbank mortgage servicers’ financial stability and governance. The goals of the proposal are to:

  • Provide better protection for borrowers, investors, and other stakeholders in the occurrence of a stress event, in which adverse circumstances affecting one or a series of companies—or alternatively, a wider market dislocation—could result in harm;
  • Enhance effective regulatory oversight and market discipline over these entities; and
  • Improve transparency, accountability, risk management, and corporate governance standards.

Continue Reading The Conference of State Bank Supervisors Proposes Regulatory Prudential Standards for Nonbank Mortgage Servicers

In this episode of White Collar Briefly, Perkins Coie’s David Biderman, firmwide chair of the Consumer Products & Services Litigation group, sits down with Craig Lackey, general counsel of Rushmore Loan Management Services, a major servicer of residential mortgages nationwide. Their discussion covers topics such as the COVID-19-related downturn on the economy and mortgage servicer responses to COVID-19 and the CARES act. Craig and David also discuss what to expect from enforcement arising from COVID-19 and how to best respond, as well as the likely changes to the enforcement environment in the event of a change in administration. Listen here

In the wake of the July 24 expiration of the moratorium on residential evictions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the U.S. Centers for Disease Control (CDC) issued an order (CDC order) temporarily halting residential evictions in the United States for lower-income tenants who are unable to pay rent because of the financial impacts of COVID-19. The residential eviction moratorium is expected to be in effect between September 4, 2020, and December 31, 2020. In this update we discuss the CDC order and the steps that must be taken to invoke its protections.

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Misinformation is rampant in our current COVID-19 world. Perkins Coie partners Ann Marie Painter and Jill B. Louis are joined by Carolee Estelle, M.D., an infectious disease specialist at UT Southwestern Medical Center and Parkland Hospital in Dallas, Texas, to provide some straight answers about the COVID-19 virus, what we know about its transmission and effect on the body, and how best to avoid spread in the workplace.

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Perkins Coie Partner, Barak Cohen was quoted in VIXIO PaymentsCompliance “CFPB Opens Gate To Regulated Open Banking In U.S.” regarding the new rule on third-party access to consumer financial data the Consumer Financial Protection Bureau (CFPB) will begin developing in the United States.

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Ben Purser, chief risk officer for mortgage lender, Roundpoint Mortgage Servicing Corporation, and Barak Cohen, partner in Perkins Coie’s White Collar & Investigations practice and lead for the firm’s Commercial Litigation in Washington, D.C., discuss the challenges of legal compliance and risk in an industry that has been directly affected by two global financial crises in one decade. Ben has 34 years of experience in financial services, including service as chief audit executive in two public companies, chief compliance officer in the Troubled Asset Relief Program (TARP) at the U.S. Department of the Treasury, and chief risk officer at two different mortgage companies. Barak is a former corruption prosecutor who has both conducted government investigation in the financial services industry and represented clients in the industry. Drawing on their unique insider perspectives, Ben and Barak discuss the delicacy of balancing consumer needs against profitability, and whether regulators, particularly today, address or impede achieving this equilibrium. In the wide-ranging discussion, Ben and Barak touch on anticipated CARES Act investigations and how these may compare to TARP oversight; managing conflicting guidance from state and federal regulators; and predictions for imminent enforcement in the wake of the coronavirus stimulus funds. They cap their discussion with straightforward advice for companies in the industry that are navigating the uncharted path of legal compliance in the current global pandemic.

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On June 20, 2020, Oregon Governor Kate Brown signed House Bill 4204 into law. The bill requires lenders to defer loan payments and refrain from enforcing default remedies on certain secured obligations during the “emergency period” beginning March 8, 2020, and ending September 30, 2020, unless modified by the governor. In this update, we outline the impacts of the bill on borrowers and lenders, and considerations moving forward.

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The Federal Fair Debt Collection Practices Act (FDCPA) is the leading debt collection practices act, serving as the lynchpin of federal consumer protections in the area of debt collection as well as serving as a model for numerous state enactments. Not surprisingly, litigation often focuses on the crucial questions of who is a “debt collector” and what is “debt collection” for purposes of the FDCPA. This area of law has received close scrutiny in recent years with published cases from the U.S. Supreme Court and the U.S. Court of Appeals for the Ninth Circuit.

In Obduskey v. McCarthy & Holthus LLP, the Supreme Court had to decide whether “one principally involved in ‘the enforcement of security interests’ is . . . a debt collector” for purposes of the FDCPA. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029, 1031 (2019). The Court concluded that the statutory language of the FDCPA’s definition of “debt collector” places:

Continue Reading The Ninth Circuit Clarifies Its Approach in FDCPA Cases Concerning Foreclosure

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, in response to the national emergency arising from the COVID-19 pandemic. Four key provisions of the CARES Act are likely to affect mortgage loan servicers: (1) credit protection; (2) a moratorium on foreclosures; (3) forbearance on mortgage payments; and (4) a moratorium on eviction filings. Compliance with the CARES Act may be straightforward for moratoriums but more challenging for credit reporting and regulatory compliance. This post provides an updated summary of salient portions of the CARES Act and identifies potential regulatory compliance pitfalls. Continue Reading CARES Act Regulatory Considerations for Mortgage Servicers