In the July 13 2012 issue of the Texas Register (Vol. 37 No. 28), the Texas State Affordable Housing Corporation (the “Corporation”), a Texas nonprofit corporation published the following notice that it is implementing a qualified mortgage credit certificate program (the “Program”) within Texas (the “Program Area”) to assist eligible purchasers.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
RESPA Fee-split Decision by SCOTUS Memo (Freeman v. Quicken Loan)
In a unanimous decision decided May 24, 2012, in Freeman, et al. v. Quicken Loans, Inc., 132 S.Ct. 2034 (2012), the U.S. Supreme Court refused to give deference to HUD’s undivided unearned fee interpretation expressed in Statement of Policy 2001-1 and ruled that Section 8(b) of RESPA (12 U.S.C. §2607(b))1 does not prohibit a settlement service provider from charging an unearned fee when the provider retains the entire fee.
Federal Regulators Issue Joint “Guidance” for Mortgage Servicer Practices impacting Military Homeowners with Permanent Change of Station Orders
On June 21, 2012, The Consumer Financial Protection Bureau, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (herein “regulators”) issued a joint guidance entitled “Interagency Guidance on Mortgage Servicing Practices Concerning Military Homeowners with Permanent Change of Station Orders” (herein Guidance”) to addresses risks related to military homeowners who have informed their loan servicer that they have received Permanent Change of Station (PCS) orders and who might seek assistance with their mortgage loans.
Comment Period for Regulation Z Ability-to-Repay Proposed Rule Extended
On June 5, 2012, the Consumer Financial Protection Bureau (CFPB) published in the Federal Register (77 FR 33120) a “Notice of reopening of comment period and request for comment” (Notice) regarding the proposed rule the Federal Reserve Board (FRB) published in the May 11, 2011 Federal Register (76 FR 27390) addressing ability-to-repay requirements applicable to consumer credit transactions secured by a dwelling and defining a “qualified mortgage.” Although the proposed rule’s original comment period ended on July 22, 2011, the CFPB is reopening the comment period until July 9, 2012, for comment on new data and information submitted during or obtained after the close of the original comment period that is discussed in the Notice.
Federal Supervisory Agencies Sign Memorandum of Understanding on Supervisory Coordination
On June 4, 2012, the five federal supervisory agencies identified below released a Memorandum of Understanding (MOU) that clarifies how they will coordinate their supervisory activities, consistent with the Dodd-Frank Act.
CFPB To Propose Rules Affecting Mortgage Points And Fees – Including Banning Origination Charges that Vary with the Size of the Loan
In a May 9, 2012 press release published today on the Consumer Financial Protection Bureau (CFPB) website, the CFPB outlined rules it is considering that would affect mortgage points and fees and mortgage loan originator qualifications. The CFPB expects to propose these rules this summer and finalize them by January 21, 2013. Below is a redaction of the May 9th press release explaining the CFBP’s proposal: “The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) places certain restrictions on the points and fees offered with most mortgages. The CFPB is considering proposals that would:
Texas Attorney General Opinion No. GA-0918 – Proration of Homestead Property Tax Exemption under Subsection 11.131(b), Tax Code, for Fully Disabled Veteran
In the above Opinion dated April 13, 2012, the Attorney General of Texas, Greg Abbott, opined with respect to the above as follows: (1) “Effective January 1, 2012, subsection 11.131(c) of the Tax Code provides a residence homestead tax exemption to the surviving spouse of a fully disabled veteran who at the time of death qualified for an exemption under subsection 11.131(b) of the Tax Code. [See, firm memorandum dated December 1, 2011.] The fact that the disabled veteran died in 2011, prior to the effective date of subsection 11.131(c), does not deprive the surviving spouse of the exemption for the 2012 tax year.” (emphasis added)
Consumer Financial Protection Bureau (CFPB) Issues Transitional Loan Originator Licensing Guidance – CFPB Bulletin 2012-05
Finally some good news from the CFPB. On April 19, 2012, the CFPB released the above referenced Bulletin, which states that the Federal SAFE Act (12 USC Chapter 51) and Regulation H (12 CFR Part 1008) permit a level of reciprocity between the states for granting loan originator licenses.
Consumer Financial Protection Bureau (CFPB) Issues Lending Discrimination Bulletin 2012-04 to Provide Guidance about Compliance with ECOA and Regulation
On April 18, 2012, the CFPB released the above referenced Bulletin notifying entities under CFBP supervision that the CFPB is reaffirming its commitment to enforcing the ECOA and Regulation B, especially in the area of disparate impact discrimination, also known as the “disparate impact doctrine.” In an accompanying press release, CFPB Director Richard Cordray is quoted as saying, “We want consumers to avoid the marketplace’s silent pickpocket-discrimination. We cannot afford to tolerate practices, intentional or not, that unlawfully price out or cut off segments of the population from the credit markets.”
Consumer Financial Protection Bureau (CFPB) to Hold Financial Institutions Accountable for their Service Providers Compliance with Federal Consumer Fi
On April 13, 2012, the CFPB released the above referenced Bulletin notifying financial institutions under CFBP supervision that, depending on the circumstances, the CFPB may hold these financial institutions legally responsible for violations of Federal consumer financial law by the service providers with whom they have a business relationship. This memorandum attempts to summarize the Bulletin’s main provisions, but you are advised to read the Bulletin, which may be found at the following web site: http://files.consumerfinance.gov/f/201204_cfpb_bulletin_service-providers.pdf.