CFPB, Regulatory, and Legal News; Plywood Endangered in Ohio


The Fed reports US household net worth soared to a record $90.2 trillion in Q3, as the stock market jumped and housing prices increased. One group of businesses that has certainly seen an uptick in business market share is credit unions. But all is not rosy: wading through the acronyms, last week the ABA has joined the ICBA in filing
suit against the NCUA
 over the field of membership rule (the ABA filed in Dec, while the
ICBA filed back in Sep).

The Mortgage Bankers
Association certainly keeps up on legal and regulatory issues. Along those
lines, the D.C. Circuit has
entered an order
 that provides the response of the United States to the CFPB’s petition for rehearing en banc is due by
December 22, 2016.  The order also provides that PHH can
file its response by December 22. Ballard Spahr reports that, “In an
order filed on November 23, 2016
the D.C. Circuit required PHH to file its response within 15 days.  The
order also invited the Solicitor General to file a response to the petition for
rehearing en banc, expressing the views of the United States. While the
November order did not expressly set a date by which the Solicitor General had
to file a response, the government apparently read the D.C. Circuit’s order as
also setting a 15-day filing deadline for its response and filed an
unopposed motion
 for leave to file its response by December 22.  Although
not expressly requested by PHH, the court’s order granting the Solicitor
General’s motion gives PHH a similar extension.”

It is incredibly unlikely that
the Dodd-Frank, and thus the CFPB, will be eliminated
. It protects consumers, remember? But its way of doing business and
structure may change, and in a letter sent to Majority Leader McConnell and
Minority Leader-elect Schumer, the Consumer Bankers Association, the Credit
Union National Association, the Independent Community Bankers of America, and
the National Association of Federal Credit Unions urge Congress to pass
legislation to create a five-member commission to run the CFPB.

And here’s one person’s take
on, “How
Easy Will it be for Donald Trump to Dismantle Dodd-Frank?”

Yes, residential lending can’t
changes in the regulatory or legal environment. A few weeks ago, in a
closely watched case involving dual agency, the California Supreme Court ruled
unanimously that a real
estate agent representing the seller of a property owes a fiduciary duty to
both the seller and the buyer if the buyer’s agent works for the same brokerage
firm. Reporter Kathleen Pender writes, “The case involved the
sale of a luxury home overlooking the Pacific Ocean in Malibu where the square
footage was in dispute. The buyer and seller were represented by agents from
different Coldwell Banker offices. Under California law, a broker may act as a
dual agent for both the seller and the buyer in a real estate transaction,
provided both parties consent to the arrangement after full disclosure that the
broker owes a fiduciary duty to both.

“What was at dispute in the
case was whether that duty extends to ‘associate licensees,’ who are the
individual agents/salespeople who operate under that broker’s license. The
court ruled 7-0 that it does
The seller of the home, a family trust, was represented by Chris Cortazzo, a
salesman in Coldwell Banker’s Malibu West office.

And when is it appropriate for a seller to regain
of a property from a buyer by filing an unlawful detainer action? In one case, the seller and buyer
entered into an agreement entitled “Contract of Sale Residential
Property”. The buyer was to maintain possession and make probationary installment
for 60 months which did not go toward the purchase price. When the buyer
defaulted on the probationary installments, it went to court.

Law Offices of Peter Brewer
 noted, “The gist is, even
though the agreement was entitled ‘contract of sale,’ the contract was
primarily a lease agreement, with the contract for sale being secondary and
taking effect after the 60-month term. Trial court sided with the seller and
the Court of Appeals affirmed the lower courts’ decision as well. The terms of
the agreement were readily the same as those found in tenancy agreements. The
buyer’s possession of the home was conditioned upon satisfactory installment
payments. Essentially, the payments represented ‘rent’ until the probationary
installment was reached. These hybrid contracts can be affordably attractive in
today’s high-priced market, but buyer beware and consult with a real estate
attorney to better understand what you are truly getting in too.”

From the Ohio Legislature came news that HB463 was passed. The bill
contains clarifications of the changes to the sheriff sale process and the fast
track foreclosure process found in HB390, which went into effect at the end of
September. HB463 also includes two new provisions in Ohio law, those being a
good funds provision for escrow agents, and the banning of plywood in the window boarding process
in property preservation. For a copy of the Legislative
Service Commission’s summary, click HERE.

And the Lenders Compliance Group answered a question regarding
. “We are a large mortgage banker with several origination platforms,
a servicing entity, and a few affiliates. Recently, we were cited for a
violation of the Telemarketing Sales Rule because of not complying with the Do
Not Call rules. How do these rules apply across our origination platforms?”

The answer? “Financial
institutions with multiple origination platforms, including their servicing
units, are particularly
vulnerable to Do Not Call violations
Years ago, in 1995, the original Telemarketing Sales Rule (“TSR”)
contained a provision that prohibited calls to any consumer who previously
asked not to get calls from or on behalf of a particular seller. Amendments to
the TSR since then retain that provision, but now also prohibit calls to any
numbers consumers have placed on the National Do Not Call Registry maintained
by the Federal Trade Commission (FTC). The multiplatform vulnerability to TSR
violations often occurs due to violations of the so-called
“Entity-Specific Do Not Call Provision.”

Employees increasingly are
taking to an anonymous chat app called Blind to vent about their employers. Since
there’s nothing companies can do to ban Blind, they’d be wise to monitor the
app and use it to improve their compliance efforts, employment lawyers say.

from the NY Times
 spread the word that big banks have gone to the Supreme Court to
fight tens of billions of dollars of potential legal costs linked to at least a
dozen pending lawsuits arising from the financial crisis. Did regulators take too long to file their claims? Banks like Wells Fargo, Credit Suisse
and Deutsche Bank, have asked the Supreme Court to review a lower court decision
that said the regulators filed their claims on time despite a Depression-era
securities law that gave them only a three-year window. Obviously the Justice
Department is pushing back, saying that the banks’ argument lacks merit and
asked the court not to take up the case.

Damages related to some $37.5
billion in securities are at stake in the pending lawsuits, the banks say, in
addition to billions of dollars in disputed prejudgment interest. That sum
includes nearly $32 billion for cases in the Court of Appeals for the Second
Circuit, which most commonly decides securities cases. The banks say these
lawsuits should have been barred under the strict three-year window and
extensions should not have been allowed.

Shifting from
one wonderful topic to another, anyone
hoping mortgage rates would go down to where they were two months ago were once
again disappointed. In fact, one could easily argue that the markets are
globally beginning to quietly shut down for 2016, and that there are only two
major macro events left – Yellen’s speech Mon 12/19 and the Bank of Japan
decision Tuesday morning 12/20.

U.S. Treasuries ended Thursday
with the 5 and 10-year yields hit multi-year highs and the U.S. Dollar Index
traded to its best level in 13 years. The good news is that the economic data
releases were better than expected – so the economy continues to chug along. Of
particular interest was some news that came from the builders: the NAHB Housing
Market Index jumped to 70 for December (from 63 in November) which was the
highest since 2005.

Today the only data out was
November’s Housing Starts and Building Permits, down nearly 19% and 5%
respectively – mostly due to a drop in multifamily activity. If you’re looking
at rates, we closed the 10-year last night at 2.60% and this
morning it is 2.57% and current coupon agency 30-year MBS prices are better by

Jobs and Announcements

In job news, a well-known East-Coast consulting company is searching for someone with Encompass experience. The candidate will be on an Encompass team working on Encompass development, client interactions, and managing their own projects. The company is a “growing, well established east coast consulting firm that is looking for experienced Encompass users that are interested in joining its team. The team member will be integral part of project team and actively involved in all aspects of Encompass related projects and work with clients on a national level.” Please submit confidential inquiries/resumes to me, and specify the job.

Citywide Home Loans is seeking a Leader of the Information Technology function on both a direct and in-direct basis. VP or CIO level. The position functions in two main capacities: (1) Maintain direct responsibility for all internally facing IT systems such as e-mail, trouble tickets, and data/telephony network and (2) Provide the leadership, technical expertise, change management, and vendor management to all internal business process owners to maximize the value received from automation. A key requirement of this position is to drive productivity, process improvement, and the business’s ability to scale through technology-enabled transformation. Apply with cover letter here at Citywide or at

Founded in 2008, and licensed in 48 states, New Penn Financial, a Shellpoint Partners company, and its reputation has grown substantially under the guidance of a management team with years of experience in the mortgage industry. “New Penn Financial has been recognized in the top 15 Third Party Originations Lenders and was recently voted as being a great mortgage lender to work for by our sales professionals. Our Mission is to exceed the expectations of our residential mortgage borrowers and business partners through superior service, simple processes, and effective communications. New Penn Financial is sourcing proven and experienced Inside Wholesale Account Executives nationwide! The expanding inside team will have the opportunity to work remotely or in our PA or NJ offices!  Contact Aubrie Cusumano if you are interested in joining a company that cares about your success and will help take your career to the next level.”

In quick notes, 1st Advantage Mortgage LLC announced it has changed its name to Draper and Kramer Mortgage Corp. And First Guaranty Mortgage Corporation (FGMC) has named Brian Daily to the position of Managing Director for the company’s Distributed Retail lending division.

If you are not yet a member of MBA, you are missing out on more than usual. Through January 31, 2017, MBA is offering new members their choice of one of the following popular product and service bundles complimentary. 1. The MBA Compliance Essentials New Member Package (valued at $2,250) includes one Compliance Essentials Resource Guide (including their new HMDA guide), five enrollments into any of MBA’s compliance-related self-study courses and one complimentary seat at a virtual live stream of a Compliance Essentials HMDA workshop in calendar year 2017. 2. The Education Advantage New Member Package (valued at $3,000) provides unlimited access to their library of over 130 self-study courses for up to 25 of your employees. Several lenders have already taken advantage of these offers, which come in addition to the other unparalleled member benefits you get when you join MBA. To learn more about this offer, contact Tricia Migliazzo at (202) 557-2858.

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