RESPA Lawyer Blog

August 24, 2015

BREAKING: 9th Circuit Court of Appeals Grants Class Certification in Edwards v. First American Corp RESPA Class Action

The United States Court of Appeals for the Ninth Circuit issued their 24 page Opinion today, August 24, 2015, in the Denise P. Edwards versus The First American Corporation; First American Title Insurance Company class action lawsuit. No. 13-55542 D.C. No. 2:07-cv-03796-SJO-FFM.

The Edwards v. First American class action lawsuit was originally filed on June 12, 2007 and has spent over 8 years bouncing from federal court to federal court.

The 9th Circuit Court of Appeals affirmed in part and vacated in part the United States District Court for the Central District of California’s order denying class certification in a case where the Plaintiffs alleged that First American Title engaged in a national scheme of paying title agencies things of value in exchange for the title agencies’ agreement to refer future title insurance business to First American in violation of the Real Estate Settlement Procedures Act “RESPA”.

July 29, 2015

MARX STERBCOW INVITED TO SPEAK AT THE FIVE STAR TITLE AND CLOSING COALITION

by Marx Sterbcow

Marx Sterbcow, managing attorney of the Sterbcow Law Group, will discuss issues concerning the TRID rollout with Rich Horn of Richard Horn Legal on September 17, 2015 at the Five Star Conference’s Title and Closing Coalition’s Semi-Annual Summit in Dallas Texas at the Hotel Anatole.

July 28, 2015

CFPB CONSENT ORDER TARGETS YET ANOTHER MORTGAGE COMPANY FOR ADVERTISING VIOLATIONS

by Marx Sterbcow

The CFPB announced on Feb. 12, 2015 another consent order for issues involving a lender mortgage origination advertising practices. Flagship Financial Group, LLC was alleged to have made material misrepresentations in commercial communications that improperly suggested that Flagship Financial was affiliated with a United States government entity and Flagship made material misrepresentations that it was endorsed or sponsored by a governmental program. This consent order is very similar to the American Preferred Lending consent order.

The Consumer Financial Protection Bureau alleged that Flagship disseminated advertisements promoting FHA streamline refinance loans and that the format & design of these advertisements looked like a government notice and implied that a governmental agency was the source of the advertisement.

The FHA streamline refinance mailers contained the heading “PURSUANT TO THE FEDERAL HOUSING ADMINISTRATION (FHA) HUD No. 12-045,” and “United States Housing and Urban Development 12-045 Program,” and instructed consumers to call their “assigned FHA loan specialist.” Flagships name appeared only on the back of the FHA streamline advertisement mailers in the disclaimer section that Flagship was not an agency of the federal government and wasn’t affiliated with the borrower’s current lender.

July 28, 2015

CFPB TARGETS MORTGAGE ORIGINATION ADVERTISING PRACTICES

by Marx Sterbcow

The Consumer Financial Protection Bureau has been sending strong messages across the real estate industry lately with its aggressive campaign against companies who they believe have made material misrepresentations which improperly suggested the lender was affiliated with a United States governmental entity or the company advertising its mortgage products was endorsed, sponsored by, or affiliated with a governmental program to consumers. The first consent order is American Preferred Lending.

On Feb. 12, 2015 the CFPB entered into a consent order with American Preferred Lending, Inc. whereby the bureau deemed American Preferred Lending violated Regulation N, 12 C.F.R. 1014.3(n) and UDAAP. The consent order found that American Preferred Lending disseminated direct-mail mortgage loan advertisements that improperly suggested that American Preferred Lending was affiliated with a governmental agency, and misrepresented that the advertised mortgage loan products were endorsed, sponsored by, or affiliated with a governmental program. The CFPB said the direct mail pieces appeared as if they were United States government notices.

The CFPB noted that “the overall format of the advertisements, including the use of plain text in labeled boxes and the title ‘Payment’ Reduction Notice,’ evoked a government form.” The advertisements were also not clearly marked so consumers could see they came from American Preferred and not the Government.

July 28, 2015

Marx Sterbcow to speak to the Raleigh Regional Association of Realtors (RRAR) on RESPA Enforcement Trends

by Marx Sterbcow

Marx Sterbcow, the managing attorney of the Sterbcow Law Group, has been invited to speak to the Raleigh Regional Association of REALTORS (RRAR) in Raleigh, North Carolina on August 13, 2015 from 11:00-12:30 PM. The presentation will be at RRAR’s office located at 111 Realtors Way, Cary, North Carolina 27513.

The presentation “RESPA-Tory Therapy: The Do’s and Don’ts of RESPA” will discuss the latest Consumer Financial Protection Bureau (CFPB) RESPA enforcement trends, marketing and advertising agreements, lead generation issues, and other issues surrounding Section 8 of the Real Estate Settlement Procedures Act. The presentation will also highlight how page 5 for the new TRID Closing Disclosure form will be a data gathering mechanism for the CFPB in their investigations of suspected illegal activity between settlement agents.

For more information and to register please check out the Raleigh Regional Association of REALTORS page herehttps://www.rrar.com/event-view.cfm/id/484/date/3149.

June 17, 2015

CFPB WILL ISSUE PROPOSED AMENDMENT TO DELAY TRID UNTIL OCTOBER 1, 2015

by Marx Sterbcow

The CFPB made a last minute surprise decision that they would be issuing a proposed amendment to delay the effective date of the TILA-RESPA Integrated Disclosure Rule “TRID” from August 1, 2015 to October 1, 2015.

Consumer Financial Protection Bureau “CFPB” Director Richard Cordray issued the following statement with respect to the TRID delay proposal:

“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

June 3, 2015

TILA-RESPA “TRID” Enforcement Delay Announced by CFPB

by Marx Sterbcow

The Consumer Financial Protection Bureau “CFPB” announced today they will delay “enforcement” of the new Truth In Lending-RESPA Integrated Disclosure “TRID” rule for an undefined period of time. Over two hundred members of Congress were pushing for an enforcement delay until December 31, 2015 but the CFPB did not place a definitive time frame for compliance thus leaving the date that CFPB enforcement starts very murky.

The CFPB also said they will apply a standard of “sensitivity” in their TRID enforcement oversight with companies who provide “good-faith efforts” to comply with TRID. However, the Bureau failed to define what “sensitivity” or “good-faith efforts” actually mean and how they will be applied.

The enforcement delay is certainly a good step because the CFPB clearly heard from the industry that a number software companies were unable to get their lending customers ready in time. The American Bankers Association recently conducted a study which said that 8 out of 10 bank members couldn’t verify when their software system would be ready or were informed their software system wouldn’t be ready before June. The Loan Originator System “LOS” troubles were discussed in a blog post we did in January.

March 24, 2015

MARX STERBCOW AND CHARLES CAIN TO PRESENT AT THE 2015 NATIONAL SETTLEMENT SERVICES SUMMIT “NS3” CONFERENCE ON VENDOR MANAGEMENT FOR TITLE AGENTS

by Marx Sterbcow

Marx Sterbcow, Managing Attorneyat Sterbcow Law Group, and Charles Cain, Of Counsel to Sterbcow Law Group and Senior Vice President to WFG National Title Insurance Company, will speak at the 2015 National Settlement Services Summit“NS3” Conference in Atlanta, Georgia on June 9, 2015. The presentation “Who’s Your Vendor? Vendor Management for Title Agents” will provide in-depth analysis and guidance on how title agents can understand and monitor the risks associated with their vendor relationships. We will discuss third party vendor management expectations originating not just from the OCC/FFIEC/FDIC/CFPB but from the secondary market on closing and settlement providers.

March 24, 2015

MARX STERBCOW INVITED TO SPEAK AT THE 2015 REAL ESTATE SERVICES PROVIDERS COUNCIL ANNUAL CONFERENCE

by Marx Sterbcow

Marx Sterbcow, managing attorney of the Sterbcow Law Group, and Jaime Kosofsky, Partner with Brady & Kosofsky, will speak at the Real Estate Service Providers Council “RESPRO” Annual Conference in San Diego, California’s Andaz Hotel on April 21, 2015.

The presentation “Where the Rubber Meets the Road: Helping Your Retail Staff Understand the New Regulations” will discuss whether companies sales associates, loan officers, and settlement agents are familiar with the new TILA-RESPA integrated disclosures “TRID”, RESPA Section 8 responsibilities under TRID, and other regulatory compliance logistic changes. The session will provide guidance on how to educate your retail staff on their new regulatory responsibilities in order to improve company-wide compliance and to enable them to better explain the new procedures to their clients.

March 24, 2015

ATS Secured Webinar on RESPA Section 8: Understanding Marketing & Advertising Regulations

by Marx Sterbcow

Marx Sterbcow, Managing Attorney of the Sterbcow Law Group LLC, will be presenting on the ATS Secured & Advanced Bank Solutions Webinar Series on Tuesday, March 31, 2015 (1:30 PM – 2:30 PM CDT) on the topic of “RESPA Section 8: Understanding Marketing & Advertising Regulations.” The webinar will cover the topics such as marketing agreements, advertising agreements, co-branding, lead generation, CFPB expectations on financial institutions, third party vendor management marketing concerns for financial institutions, and preparing your organization to remain RESPA compliant.

The ATS Secured & Advanced Bank Solutions Webinar Series is free and you can register by clicking on this link here