On January 10, 2019, the CFPB issued a press release regarding two recently-released reports, which analyze the efficacy of the Ability to Repay Rule (ATR), and the RESPA Servicing Rule (Servicing Rule). The assessment reports analyze data collected since the rules were enacted in January 2013, and are designed to assess whether…
On October 4, 2017, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule amending a provision of Regulation X regarding the timing for mortgage servicers to communicate with borrowers about foreclosure prevention alternatives. On the same date, the CFPB also issued a proposed rule regarding timing requirements for…
On June 7, 2017, the Consumer Financial Protection Bureau (CFPB) issued a Consent Order against mortgage servicer Fay Servicing, LLC (Fay), requiring Fay Servicing to pay $1.15 million to borrowers and to cease activities that the CFPB contended violated the Real Estate Settlement Procedures Act (RESPA), its implementing regulation, Regulation X,…
On March 30, 2017, Judge Karas of the Southern District of New York dismissed multiple claims in a putative nationwide class action challenging default servicing activities. In the case, Tardibuono-Quigley v. HSBC Mortgage Corp., the plaintiff sued her lender (HSBC) and mortgage servicer (PHH) to contest charges she claimed were wrongly…
Last month, the Ninth Circuit affirmed dismissal of a putative class action that challenged certain fees imposed for property inspections conducted after the named plaintiffs had defaulted on their mortgages. Demonstrating the value of the increased pleading requirements set by Federal Rule of Civil Procedure 9, the Ninth Circuit’s decision in…
On August 3, 2016, Goodwin filed an amicus brief in the Washington Supreme Court on behalf of the Mortgage Bankers Association and the Consumer Mortgage Coalition. The case—Jordan v. Nationstar Mortgage LLC—involved a challenge to a servicer’s default-servicing practice of rekeying the lock on the front door of seemingly abandoned…
With the end of the Department of Treasury’s Home Affordable Modification Program (HAMP) coming in January 2017, the Consumer Financial Protection Bureau (“CFPB”) has released a set of four principles for financial institutions to use when considering how to help a borrower avoid foreclosure. These principals are intended “to complement ongoing…
On June 22, 2016, the CFPB issued a Mortgage Servicing Supervisory Highlights Special Edition Report, and concluded that mortgage servicers may be violating the servicing rules that the CFPB enacted in January 2014, as a result of servicers’ continued reliance on ineffective technology. In addition, the press release accompanying the…
On April 14, 2016, the Federal Housing Finance Agency (FHFA) announced two changes concerning its policies affecting delinquent mortgage loans: first, it announced that Fannie Mae and Freddie Mac will offer mortgage principal reductions to certain borrowers who are seriously delinquent and underwater, and second, it announced new enhancements to…
EDITOR’S NOTE: This blog post was written by Steven Ellis, a partner in Goodwin’s Consumer Financial Services Litigation Practice Group. Steve was one of the authors of an amicus brief filed in the Yvanova case on behalf of the California Bankers Association. Do borrowers have standing to challenge a non-judicial…
On December 3, 2015, the Eleventh Circuit issued an opinion that has carved a path for plaintiffs challenging their communications with loan servicers. The decision, Prescott v. Seterus, Inc., reversed a grant of summary judgment in favor of the defendant, Seterus, Inc. — Fed.Appx. —, 2015 WL 7769235 (S.D. Fla.,…
Last month, the United States District Court for the Eastern District of California issued the latest in a string of decisions denying class certification in cases of alleged misconduct regarding residential mortgage loan modifications. Beginning in 2010 and 2011, mortgage servicers saw a marked increase in cases challenging their loan modification…
Often overlooked by lenders and servicers, sometimes striking a deal with the Chapter 7 Trustee in bankruptcy court, is the more prudent and cost effective approach to resolving frivolous lawsuits filed by defaulting borrowers in state court. In Brumfiel v. Lewis, Chapter 7 Trustee, et al. (In re Lisa Kay…
Don’t miss the Goodwin Procter team (Margaret Crockett and David Permut) at the Welcome Reception on January 9, 2016 at 6:30. Other highlights of the Winter Meeting, include: a panel presentation called “RESPA Update: Lighthouse, and PHH, and MSAs, oh my!” and a CLE Program presented by the Housing Finance Subcommittee,…
From origination through final payoff, plaintiffs’ counsel look for claims in just about every aspect of the relationship between borrowers and their mortgage lenders. Recently, scrutiny has turned to property inspections carried out during default servicing. Plaintiffs’ lawyers have filed several class-action suits alleging that inspection fees violate mortgage terms, state…
A U.S. District Judge in the Northern District of Illinois recently granted summary judgment in favor of defendant PNC Bank on a borrower’s promissory estoppel and Illinois Consumer Fraud Act (ICFA) claims in connection with PNC’s HAMP procedures. In its August 25, 2015 decision the court found that PNC’s actions…
Editor’s Note: This post was guest-authored by Joseph Yenouskas, a partner in Goodwin Procter’s Consumer Financial Services Litigation Group who focuses on general civil litigation in federal and state trial and appellate courts, with a particular emphasis on defending financial institutions and mortgage lenders in complex consumer class action lawsuits. The…
Beginning with its next sale in June 2015, HUD will have new, stricter requirements for entities that purchase distressed loans as part of the Distressed Asset Stabilization Program (“DASP”), a development we initially covered here. Initially conceived as a way to lower losses suffered by the FHA from troubled loans,…
On April 24, 2015, the U.S. Department of Housing and Urban Development (HUD) announced that it would reform its Distressed Asset Stabilization Program (DASP), requiring purchasers to take stronger steps to ensure that homeowners are given further options to avoid foreclosure. DASP was set up in 2010, to pool distressed…
The mortgage servicing industry remains under scrutiny, as evidenced by the recent joint enforcement action against Green Tree Servicing, LLC by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). In a joint complaint filed in Minnesota, the regulators allege that Green Tree, through its collection activities…