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  • 18 Jan 2013 3:55 PM | Edith Tella (Administrator)

    CFPB Issues Rules to Strengthen Protections for High-Cost Mortgages

    The CFPB issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.
    Read more... 

  • 18 Jan 2013 3:53 PM | Edith Tella (Administrator)

    CFPB Issues Rule to Protect Consumers from Irresponsible Mortgage Lending

    The CFPB has adopted a new rule that will protect consumers from irresponsible mortgage lending by requiring lenders to ensure that prospective buyers have the ability to repay their mortgages.
    Learn more... 

  • 16 Nov 2012 4:15 PM | Edith Tella (Administrator)

    From: Barton.Shapiro@cfpb.gov [mailto:Barton.Shapiro@cfpb.gov]
    Sent: Friday, November 16, 2012 1:23 PM
    To: Barton.Shapiro@cfpb.gov


    Dear Colleagues,

     

    The Consumer Financial Protection Bureau (CFPB) announced that it will give industry extra time to provide certain new disclosures required under the Dodd-Frank Wall Street Reform and Consumer Protection Act in order to allow a more seamless integration with other mortgage disclosures that have been proposed by the Bureau. Per today’s announcement, industry will not be required to provide those disclosures until after the Bureau’s previously proposed mortgage disclosure rules are finalized.   Please read below for more information.

    Regards,

    Bart

    CONSUMER FINANCIAL PROTECTION BUREAU EXTENDS EFFECTIVE DATE FOR NEW MORTGAGE DISCLOSURES

    Disclosure Requirements Will Be Integrated into CFPB’s Final Mortgage Disclosure Forms Instead of Taking Automatic Effect in January

     

    WASHINGTON, D.C. - The Consumer Financial Protection Bureau (CFPB) announced that it will give industry extra time to provide certain new disclosures required under the Dodd-Frank Wall Street Reform and Consumer Protection Act in order to allow a more seamless integration with other mortgage disclosures that have been proposed by the Bureau. Per today’s announcement, industry will not be required to provide those disclosures until after the Bureau’s previously proposed mortgage disclosure rules are finalized.

     

    “Considering these disclosures on the same timeline will ensure that consumers receive clear, concise, and consistent information,” said CFPB Director Richard Cordray.  “By seeking public comment and conducting consumer-testing for these disclosures together, we can avoid the duplication and inefficiency that existed in the past.”

     

    The Dodd-Frank Act required that the CFPB integrate certain disclosures from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). For decades, TILA and RESPA have required lenders and settlement agents to give borrowers different but overlapping disclosure forms in connection with applying for and closing most mortgages loans. This duplication has long been recognized as inefficient and confusing for consumers and industry. In July, the CFPB proposed new Loan Estimate and Closing Disclosure forms after months of qualitative testing and the Bureau’s Know Before You Owe mortgage initiative.

     

    In addition to requiring the integration of TILA-RESPA disclosures, the Dodd-Frank Act also establishes additional new mortgage disclosure requirements, which would automatically take effect on Jan. 21, 2013 unless other action was taken. These new requirements include disclosures on cancellation of escrow accounts, on a consumers’ liability for debt payment after foreclosure, and on the creditor’s policy for accepting partial payment. The CFPB integrated many of these new requirements into the Bureau’s proposed forms that were released in July 2012.

     

    The Bureau’s July TILA-RESPA integration proposal requested comment on granting more time for companies to provide many of the additional disclosures so that the entire TILA-RESPA disclosure regime could take effect together. Commenters overwhelmingly supported providing this extra time so that all of the disclosures take effect together.

    Through a final rule issued today, the Bureau is allowing more time to provide the new disclosures by giving a temporary exemption from the requirements, so that the entire TILA-RESPA disclosure integration regime can go into effect at once. Without this extra time, industry would have to implement these new disclosures twiceundefinedonce on January 21, 2013, and once again when the Bureau finalizes the integrated TILA-RESPA disclosure regime. Consumers will benefit from a comprehensive disclosure rule because the Bureau plans to use consumer-tested, easily understood language in all disclosures.

    Though no deadline was mandated for finalizing the TILA-RESPA integrated proposal, the Bureau anticipates that the final rules will be published next year.  

     

    The final rule providing this temporary exemption for certain Dodd-Frank disclosures can be found at: http://files.consumerfinance.gov/f/201211_cfpb_final-rule_title-XIV-disclosures-extension.pdf

    ###

    The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov.

  • 19 Oct 2012 3:14 PM | Edith Tella (Administrator)

    Orignation News 10/19/12

     

    Low downpayment loans could be in danger depending on how the qualified mortgage rule plays out.

     

    click here to read more

  • 16 Oct 2012 5:32 PM | Edith Tella (Administrator)

    Origination News, 10/16/12

     

    A group that represents loan officers is holding out hope that "dual compensation" will be allowed on all mortgage transactions.

     

    Read More click here

  • 12 Oct 2012 4:40 PM | Edith Tella (Administrator)

    Origination News Post 10/12/12

     

    Mitt Romney has put out a paper on his views of the housing market and how he proposes to bring it back fully from the collapse of 2008. Tomorrow we will publish in this space President Obama’s views on housing.

     

    Click Here for more Info

  • 12 Oct 2012 12:59 PM | Edith Tella (Administrator)

    FOR PLANNING PURPOSES

    Friday, October 12, 2012

    TODAY: Congressman Barney Frank to Debate
    the Future of Housing Policy

    Congressman Barney Frank today will take part in a moderated discussion on the future of housing policy in the United States.  As the former Chairman of the House Financial Services Committee, Frank was a leader in the passage of the 2010 Wall Street Reform and Consumer Protection Act.  Frank will engage in what is likely to be a spirited discussion with Keith Hennessy, former Assistant to President George W. Bush for Economic Policy, and former Director of the National Economic Council.

    WHEN:         Friday, October 12, 2012 -- 10:30 am CST, 11:30 am EST

    WHAT:            Opening remarks: Leo Melamed, CME Group Chairman Emeritus

                       Moderator: Terry Savage, Chicago Sun-Times Financial Columnist

                       Panelists:

    ·        Barney Frank, United States Representative of the 4th Congressional District of Massachusetts

    ·        Keith Hennessey, National Economic Council Former Director 


                          The forum will be webcast at:  www.cmegroup.com/msri2012       

    WHERE:         W Chicago - City Center

    172 West Adams Street

    Chicago, IL

                      

    CONTACT       For media access to Congressman Frank, please contact Harry Gural by phone at (202) 225-9400.

                       For media access at the CME Group, please contact Michael Shore at (312) 930-2363

  • 24 Sep 2012 2:00 PM | Edith Tella (Administrator)

    Dear Colleagues,

     

    Today, the Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB) announced a joint public enforcement action with an order requiring Discover Bank to refund approximately $200 million to more than 3.5 million consumers and pay a $14 million civil money penalty. 

    Please see the joint press release below.

     

    Regards,

    Bart

    FEDERAL DEPOSIT INSURANCE CORPORATION AND CONSUMER FINANCIAL PROTECTION BUREAU ORDER DISCOVER TO PAY $200 MILLION CONSUMER REFUND FOR DECEPTIVE MARKETING

    Discover Pays Additional $14 Million Penalty for Deceptive Marketing of Credit Card ‘Add-On Products’

    WASHINGTON, D.C. – Today, the Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB) announced a joint public enforcement action with an order requiring Discover Bank to refund approximately $200 million to more than 3.5 million consumers and pay a $14 million civil money penalty.  This action results from an investigation started by the FDIC, which the CFPB joined last year.  The joint investigation concerned deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card “add-on products” – payment protection, credit score tracking, identity theft protection, and wallet protection.

    The agencies jointly determined that Discover engaged in deceptive telemarketing tactics to sell the company’s credit card add-on products.  Payment Protection was marketed as a product that allows consumers to put their payments on hold for up to two years in the event of unemployment, hospitalization, or other qualifying life events.  Discover also sold its Credit Score Tracker, designed to allow a customer unlimited access to his or her credit reports and credit score.  The third product was Identity Theft Protection, which was marketed as providing daily credit monitoring.  Lastly, Discover’s Wallet Protection product was sold as a service to help a consumer cancel credit cards in the event that his or her wallet is stolen.

    Discover’s telemarketing scripts contained misleading language likely to deceive consumers about whether they were actually purchasing a product.  Discover’s telemarketers also often downplayed key terms and spoke quickly during the part of the call in which the prices and terms of the add-on products were disclosed.  Because of the misleading language in the scripts and the actions of Discover’s telemarketers, consumers were:

    •·        Misled about the fact that there was a charge for the products: Discover’s telemarketing scripts often used language implying that the products were additional free “benefits,” rather than products for which a fee would be applied to their accounts. 

    •·        Misled about whether they had purchased the products:  The telemarketing scripts frequently suggested that consumers would not be charged for the products until after having a chance to review printed materials from Discover.  Discover, however, did not provide consumers with the information until after Discover had already initiated the consumer’s purchase of a product.

    •·        Enrolled without their consent: Discover representatives processed the add-on product purchases without some consumers’ consent.  These consumers were then charged for the product on their Discover card.

    •·        Withheld material information about eligibility requirements for certain benefits: Discover’s telemarketers typically did not disclose critical eligibility requirements for certain payment protection benefits, such as exclusions for pre-existing medical conditions and certain limitations concerning employment.

    Enforcement Action

    Under the order, Discover has agreed to:

    •·        Stop deceptive marketing: Discover is required to institute certain changes to its telemarketing of these products that are designed to ensure that these unlawful acts do not occur again.  Discover has also agreed to submit a compliance plan to the FDIC and the CFPB for approval, and to take specific corrective actions related to the products. 

    •·        Pay restitution to consumers who purchased the products: Discover will pay approximately $200 million in restitution to more than 3.5 million consumers who were charged for one or more of the products between December 1, 2007 and August 31, 2011.  Generally, all consumers affected by Discover’s deceptive practices regarding these products, except those who affirmatively made use of Payment Protection, will receive restitution, with amounts varying depending on when they purchased, and how long they held, the add-on products.  All consumers will receive at least 90 days’ worth of fees paid (minus any refunds they have already received), with approximately 2 million consumers receiving full restitution of all of the fees they paid (minus any refunds they have already received).

    •·        Provide refunds or credits without any further action by consumers: Consumers are not required to take any action to receive their credit or check. If an affected consumer is still a Discover customer, he or she will receive a credit to his or her account.  If an affected consumer is no longer a Discover credit card holder, the consumer will receive a check in the mail or have any outstanding balance reduced by the amount of the refund. 

    •·        Submit to an independent audit: Compliance with the restitution terms of the order will be assured through the work of an independent auditor, who will report to the FDIC and the CFPB on Discover’s compliance with the joint FDIC-CFPB Consent Order.

    •·        Pay a $14 million penalty: The FDIC and the CFPB imposed civil money penalties of $14 million.  Discover will pay $7 million of that penalty to the U.S. Treasury and $7 million to the CFPB’s Civil Penalty Fund. 

    The full text of the Joint FDIC-CFPB Consent Order with Discover is available at: http://files.consumerfinance.gov/f/201209_cfpb_consent_order_0005.pdf

    A factsheet on the Consent Order is available at: http://consumerfinance.gov/f/201209_cfpb_factsheet_settlement-with-discover-bank.pdf


    ###

    Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,246 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

    The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov.

  • 13 Sep 2012 3:30 PM | Edith Tella (Administrator)

    Below please find Director Cordray’s written testimony before the Senate Committee on Banking, Housing, and Urban Affairs earlier today.

    Regards,

    Bart

    Written Testimony of Richard Cordray

    Director, Consumer Financial Protection Bureau

    United States Senate Committee on Banking, Housing, and Urban Affairs

    Washington, D.C.

    September 13, 2012

    Chairman Johnson, Ranking Member Shelby, and Members of the Committee, thank you for inviting me to testify today about the Semi-Annual Report of the Consumer Financial Protection Bureau.

    Just over one year ago, the Consumer Bureau became the nation’s first federal agency focused solely on protecting consumers in the financial marketplace.  The Semi-Annual Report we are discussing today covers our activities from January 1 through June 30 of this year.

    As the report shows, we have been using all of the tools at our disposal to help protect consumers across this country.  We pledge to continue our work to promote a fair, transparent, and competitive consumer financial marketplace.

    Through our regulatory tools, we have proposed smarter rules that will help fix the broken mortgage market with common-sense solutions.  We are writing rules that simplify mortgage disclosure forms and rules that make sure consumers do not receive mortgages that they do not understand or cannot afford.  Our rules will also bring greater transparency and accountability to mortgage servicing.  And our careful process is that before we propose a rule, a team of attorneys, economists, and market experts evaluates its potential impacts, burdens, and benefits for consumers, providers, and the market.

    Our push for accountability extends beyond mortgage servicing.  We are holding both banks and nonbanks accountable for following the law.  Prior to my appointment, nonbanks had never been federally supervised.  The financial reform law specifically authorized us to supervise nonbanks in the markets of residential mortgages, payday loans, and private student loans.  We also have the authority to supervise the “larger participants” among nonbanks in other consumer finance markets as defined by rule.  So far, we have added credit reporting companies to this group.

    It is important for us to exercise sensible oversight of the consumer finance markets, but it is also important that we empower consumers themselves to make responsible financial decisions.  Our “Know Before You Owe” campaign involves us working to make mortgages, credit cards, and student loans easier to understand.  We also developed “AskCFPB,” an interactive online database with answers to consumers’ frequently asked questions.  We also launched the first-ever database of individual complaints about financial products, starting with credit cards.  Consumers can use the website to review and analyze information and draw their own conclusions about the customer service provided with these financial products.

    We also think it is important to engage directly with consumers so we know more about the struggles and frustrations they encounter in their daily lives.  The Bureau has held numerous field hearings across the country so we can talk face to face with consumers on a variety of topics.  Our website has a feature called “Tell Your Story,” which encourages consumers to share with us their personal stories to help inform our approach in addressing issues in the financial marketplace.  And, perhaps most significantly, we help to resolve consumer disputes with lenders by taking complaints on our website at consumerfinance.gov, as well as by mail, fax, phone, and by referral from other agencies.  As of September 3, we have received 72,297 consumer complaints about credit cards, mortgages, and other financial products and services, and the pace of complaints has been increasing over the past year.

    All of these processes – rulemaking, supervision, enforcement, and consumer engagement – provide us with valuable information about consumer financial markets.  We engage in extensive outreach to large and small institutions, including banks and nonbanks, to gather the best current information as we make policy decisions.  We pride ourselves on being a 21st-century agency whose work is evidence-based.  So we also conduct our own in-depth studies on consumer financial products, such as reverse mortgages and private student loans.  We have issued public requests for information that seek input from consumers, industry, and other stakeholders on issues such as overdraft fees, prepaid cards, and the financial exploitation of seniors.

    The new Consumer Bureau has worked on all of these projects while being fully engaged in start-up activities to build a strong foundation for the future.  The Bureau has worked to create an infrastructure that promotes transparency, accountability, fairness, and service to the public.  Our first year has been busy and full, and this report reflects considerable hard work done by people whom I greatly admire and respect.  They are of the highest caliber and they are deeply dedicated to public service.  We look forward to continuing to fulfill Congress’s vision of an agency that helps all Americans by improving the ways and means of their financial lives. Thank you.

    The semi-annual report can be found online here: http://www.consumerfinance.gov/reports/semi-annual-report/

    ###

    The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov.

  • 13 Sep 2012 9:12 AM | Edith Tella (Administrator)

    Disparate Impact 

    Update from Capitol Hill

     


    NAMB signs
    joint letter on Reg X and Reg Z. We question the use of an "all-in" APR, request the CFPB simplify its approach to rulemakings, and push for a single version of Regulation Z changes so the industry does not have to navigate through overlapping proposals.

     

    Click Here for more inforamtion


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