Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36For more information, please visit or 10 11 PAYDAY LENDING MORTGAGE CREDIT CARDS AUTO LOANS TELEPHONE CONSUMER PROTECTION ACT FEDERAL COURTS OF APPEALS CONSUMER FINANCIAL & PROTECTION BUREAU STUDENT LENDING DEBT COLLECTION DATA SECURITY What to Watch Continued enforcement focus on FHA loan underwriting and fair lending | Impact of CFPB’s new mortgage servicing rules | Finalization of CFPB’s proposed TRID update | Implementation of CFPB’s new HMDA rule | Supreme Court’s decision on scope of Fair Housing Act 2016 highlights DOJ Actions Concerning Federal Housing Administration Mortgage Insurance. In April, the DOJ announced a $1.2 billion settlement with Wells Fargo Bank and one of its executives after the bank admitted that between May 2001 and December 2008 it had underwritten and endorsed loans for FHA insurance that were not eligible under government guidelines. Also in April, the DOJ announced a settlement with Freedom Mortgage for $113 million after a joint HUD- DOJ investigation concluded that the company had not complied with FHA underwriting requirements. CFPB Finalizes New Mortgage Servicing Rules. In August, the CFPB finalized new mortgage servicing rules (effective October 19, 2017) requiring lenders to provide certain borrowers with additional loss mitigation protection, such as finding alternatives for foreclosure more than once during the life of a loan. The CFPB also increased protections for persons who are “successors in interest” to a mortgage, ensuring that they are pro- vided certain information and notices as to mortgage and statutory rights. The new rules also require lenders to provide some consumers who are in bankruptcy periodic updates about their loss mitigation evaluation. The CFPB has emphasized in recent publications that mortgage servicing is a “growing point of emphasis” for the agency. CFPB Proposes Updates to TRID Rule. In July 2016, the CFPB proposed updates to its TRID “Know Before You Owe” rule, aimed at providing more clarity for lenders and more protections for consumers. The proposal covers such topics as tolerances for payment totals, housing-assistance lending, cooperatives, and privacy and information sharing. 0 5 10 15 20 FTCA FIRREA TILA RESPA ECOA CFPA FHA FCA State Statute or Regulation 18 8 10 11 5 12 12 3 5 5 5 5 4 1 1 3 1 Statute Analysis Mortgage Number of Actions 2015 2016 actions by statute — mortgage products Supreme Court to Determine Scope of the Fair Hous- ing Act. Over the past several years, some local gov- ernments have sued mortgage lenders, alleging that blight and blight-related expenses, such as additional policing costs, were caused by discriminatory lending and therefore they can recover under the Fair Housing Act. In November, the Supreme Court heard oral argu- ment in Miami’s cases against two lenders and will like- ly resolve whether local governments are “aggrieved persons” who can sue to enforce the Act. Continued enforcement related to financial crisis. Federal agencies continue to resolve enforcement actions related to financial crisis-era conduct. In February, the DOJ, CFPB, HUD, Federal Reserve Board, and 49 state attorneys general announced settlements with HSBC totaling over $600 million to resolve alleged mortgage origination, servicing, and foreclosure errors and misconduct between 2008 and 2012. In January, the OCC reached settlements with JPMorgan Chase Bank and EverBank totaling $49 million for alleged violations of financial crisis-era consent orders related to mortgage servicing. Looking Ahead to 2017 The CFPB is likely to continue focusing on RESPA enforcement, as the agency has suggested that it believes that Marketing Service Agreements can constitute illegal “kickback” arrangements. One new area of enforcement and litigation may be the implementation of the CFPB’s new TRID rule (or the “Know Before You Owe” rule), which became effective on October 3 and makes significant changes to mort- gage disclosure form requirements. There is still no formal grace period for compliance with TRID, although the CFPB announced that initial compliance examina- tions will focus on whether companies have made a “good-faith” effort to comply, and that certain violations can be cured even after closing. The CFPB suggested that its TRID approach would mimic its early enforce- ment of the 2014 mortgage servicing rules. Those rules are also likely to change in 2017 because the CFPB plans to finalize its proposed rules amending Regula- tion X (implementing RESPA) and Regulation Z (implementing TILA) later this year. In addition, the FHA provided new guidance, in the form of taxonomy, to lenders on what it believes con- stitutes a defect in a loan. The FHA’s expressed hope is that greater transparency will encourage lending to low-income borrowers, but only time will tell if the FHA’s new guidance has that effect.