1 osc 2013 annual conference michael r. pfeifer, smith dollar pc

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OSC 2013 Annual Conference

Michael R. Pfeifer, Smith Dollar PC

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Mortgage Servicing Final Rules Under Regs. X and Z

“Servicing Issues Cloud Mortgage Investor Outlook”

---Housingwire June 25, 2013

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“The Dodd-Frank Act imposed new requirements on servicers and gave the Bureau the authority to both implement the new requirements and also to adopt additional rules to protect consumers. The Bureau is exercising that authority (1) to improve the information consumers receive from their servicers, (2)enhance the protections available to consumers to address servicer errors, and (3) to establish some baseline servicing requirements that will provide additional protections for consumers who have fallen behind on their mortgage payments.” (Numbers added.)

---Excerpt from CFPB Summary of Final Mortgage

Servicing Rules

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Part I(Overview)

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753 Pages; Effective January10, 2014Comprehensive overhaul of mortgage

servicing rules in nine (9) areas:1. Periodic Billing Statements - TILA2. Interest Rate Adjustment Notices

for ARMS - TILA3. Prompt Payment Crediting and

Payoff Statements - TILA4. Escrow & Force-Placed Ins. - RESPA

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5. General Servicing Policies, Procedures, and Reqs. - RESPA

6. Error Resolution and Information Requests - RESPA

7. Early Intervention with Delinquent Borrowers - RESPA

8. Continuity of Contact With Delinquent Borrowers - RESPA

9. Loss Mitigation Procedures - RESPA

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July 10, 2013 “Final Rule” based on Proposed Rule issued June 24, 2013 providing “additional revisions and clarifications of and amendments to the 2013 Title XIV Final Rules.” (161 pages)

Subsequent amendments on July 24, 2013 and September 13, 2013.

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TILA Amendments apply as follows:

Periodic Billing: Closed-end consumer credit transactions secured by a dwelling, excluding reverse mortgages and timeshares

ARM Disclosures: Closed-end consumer credit transactions secured by consumer’s principal dwelling where APR may increase after consummation (except ARMS with term of 1 year or less)

Prompt Payment Crediting and Payoff: Closed-end and open-end consumer credit transactions secured by a consumer’s principal dwelling

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Remedies for Violations

TILA: For each violation of the regulations implementing TILA a “creditor” may be liable for: Actual damages Statutory damages up to $4,000 in an individual

action or In a class action, up to $1M or 1% of creditor’s net

worth Attorneys fees and costs

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RESPA Amendments Apply: to “federally related mortgage loans” (closed-end loans secured by 1-4 family residential real property), but note:

Open-end loans generally exempt from new servicing standards (but not escrow requirements)

Early Intervention, Continuity of Contact, and Loss Mitigation rules apply only to loans on a borrower’s principal residence

Reverse Mortgage loans are NOT subject to P&P requirements, Early intervention, Continuity of Contact and Loss Mitigation rules

Exclusion for temporary financing and business purpose loans

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RESPA: Except for violation of Policies and Procedures

Requirements and Continuity of Contact, a “servicer” may be liable for: Actual damages Statutory damages up to $2,000 per violation for

an individual action or $2,000 per member of a class not to exceed the

lesser of $1M or 1% of servicer’s net worth upon showing of pattern of noncompliance

Attorneys fees and costs

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Remedies for Violation of CA. B&P Code §§17200 (Unfair or Deceptive Acts or Practices – UDAP):

Private Litigants: •Injunction•Restitution

Law Enforcement Officials:•Injunction•Restitution•Civil Money Penalties

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CFPB Enforcement Options For Unfair, Deceptive or Abusive Acts or Practices

(UDAAP): Cease and Desist Orders

– Including temporary cease and desist ordersCivil Money Penalties

– Up to $5,000 per violation, per day– Up to $25,000 for reckless violations; $1 million for knowing violations

Other Available Remedies– Rescission or reformation of contracts– Refund of money or return of real property– Restitution– Disgorgement of compensation for unjust enrichment– Damages or other monetary relief -- Limits on activities and functions

Recovery of Costs in Civil Actions

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Unfair, Deceptive, Abusive…

Dodd-Frank: “UDAAP” (UDAP on Steroids)

(a) It shall be unlawful for—

(1) any covered person or service provider— (A) to offer or provide to a consumer any financial product or service not in conformity with Federal consumer financial law, or otherwise commit any act or omission in violation of a Federal consumer financial law; or (B) to engage in any unfair, deceptive, or abusive act or practice; (emphasis added)

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Dodd-Frank: “UDAAP” (UDAP on Steroids) (Continued)

(a) It shall be unlawful for— …* * *

(2) any covered person or service provider to fail or refuse, as required by Federal consumer financial law, or any rule or order issued by the Bureau thereunder— (A) to permit access to or copying of records; (B) to establish or maintain records; or (C) to make reports or provide information to the Bureau; or

(3) any person to knowingly or recklessly provide substantial assistance to a covered person or service provider in violation of the provisions of section 5531 of this title, or any rule or order issued thereunder, and notwithstanding any provision of this title, [1] the provider of such substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom such assistance is provided.

(b) No person shall be held to have violated subsection (a)(1) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement.

(Emphasis added.)

http://www.law.cornell.edu/uscode/text/12/5531

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UDAAP Narrative: CFPB Examination ManualUnfair Acts or PracticesThe standard for unfairness in the Dodd-Frank Act is

that an act or practice is unfair when:(1) It causes or is likely to cause substantial injury

to consumers,(2) The injury is not reasonably avoidable by

consumers, and(3) The injury is not outweighed by countervailing

benefits to consumers or to competition.

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UDAAP Narrative: CFPB Examination ManualDeceptive Acts or PracticesA representation, omission, actor practice is

deceptive when(1) The representation, omission, act, or practice

misleads or is likely to mislead the consumer,(2) The consumer’s interpretation of the

representation, omission, act, or practice is reasonable under the circumstances, and

(3) The misleading representation, omission, act, or practice is material.

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UDAAP Narrative: CFPB Examination ManualDeceptive Acts or PracticesA representation, omission, actor practice is

deceptive when(1) The representation, omission, act, or practice

misleads or is likely to mislead the consumer,(2) The consumer’s interpretation of the

representation, omission, act, or practice is reasonable under the circumstances, and

(3) The misleading representation, omission, act, or practice is material.

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UDAAP Narrative: CFPB Examination ManualAbusive Acts or Practices

The Dodd-Frank Act makes it unlawful for any covered person or service provider to engage in an “abusive act or practice.” An abusive act or practice:

Materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service or

Takes unreasonable advantage of –▪ A lack of understanding on the part of the consumer of the

material risks, costs, or conditions of the product or service;▪ The inability of the consumer to protect its interests in

selecting or using a consumer financial product or service; or▪ The reasonable reliance by the consumer on a covered person

to act in the interests of the consumer.

Although abusive acts also may be unfair or deceptive, examiners should be aware that the legal standards for abusive, unfair, and deceptive each are separate.

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Dood-Frank Title XIV §1463(a) RESPA Amendments-Servicer Prohibitions

Section 6 of RESPA (12 U.S.C. 2605) is amended by adding new subsections, including

(k) Servicer Prohibitions---(1)IN GENERAL – A servicer of a federally related

mortgage shall not---(E) fail to comply with any other obligation

found by the Bureau of Consumer Financial Protection by regulation to be appropriate to carry out the consumer protection purposes of this Act.

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See CFPB Bulletin 2013-07 July 10, 2013Prohibition of Unfair, Deceptive, or Abusive Acts

or Practices in the Collection of Consumer DebtsA. BackgroundB. Summary of Applicable StandardsC. Examples of Unfair, Deceptive and/or Abusive Acts or Practices

Concluding Quote: “…Original creditors and other covered persons and service providers involved in collecting debt related to any consumer financial product or service are subject to the prohibition against UDAAPS in the Dodd-Frank Act. The CFPB will continue to review closely the practices of those engaged in the collection of debts for potential UDAAPs, including the practices described above.”

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Small Servicer Exemption

“Small Servicers” – i.e., who service 5,000 or fewer “mortgage loans”*† and service only mortgage loans that they or an affiliate originated or own (including by assignment)– are exempt from: Policy and Procedure Requirements Early Intervention Continuity of Contact Most of Loss Mitigation

* Per July 10, 2013 Amendment: “Mortgage Loan” means “closed end consumer credit transactions secured by a dwelling” not “federally related mortgage loans” (which exclude construction loans)

†July 10, 2013 Amendment includes additional complex “refinements” and “clarifications” through the commentary as to what is and is not a “small servicer,” and how that should be determined and includes discussion of whether loans serviced by master servicer or sub-servicer are to be counted in the 5,000

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Preemption

States can provide borrowers with broader consumer protections, HOWEVER: Servicer may not give the first notice or make the first filing required for a foreclosure process until the borrower is more than 120 days delinquent

Final rule preserves pre-existing preemption of certain state mortgage servicing transfer disclosures

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1. Periodic Billing Statements

Creditors, assignees, and servicers must provide a periodic billing statement for each billing cycle that meets specified requirements concerning timing, form and content.

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2. Interest Rate Adjustment Notices for ARMS:

Creditors, assignees, and servicers must provide a consumer whose mortgage has an adjustable rate with a notice, prior to the first payment due after the rate first adjusts, and also before payment at a new level is due, that meets specified requirements concerning timing, form and content.

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3. Prompt Payment Crediting and Payoff Statements:

Servicers must promptly credit periodic payments from borrowers as of the day of receipt and follow other specified procedures pertaining to partial payments, accurate payoff balance statements, and responses to written requests.

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4. Force-Placed Insurance:

Servicers are prohibited from charging a borrower for forced-placed insurance coverage unless the servicer has a reasonable basis to believe the borrower has failed to maintain hazard insurance and has provided certain required notices.

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5. General Servicing Policies, Procedures, and Requirements:

Servicers are required to establish policies and procedures reasonably designed to achieve objectives specified in the rule. The reasonableness of a servicer’s policies and procedures takes into account the size, scope, and nature of the servicer’s operations.

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Error Resolution and Information Requests RESPA § 1024.35

6. Error Resolution and Information

Requests

Servicers are required to meet certain procedural requirements for responding to written information requests and complaints of errors.

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Early Intervention With Delinquent Borrowers

7. Early intervention with delinquent

borrowers:

Servicers must establish or make good faith efforts to establish live contact with borrowers by the 36th day of their delinquency, promptly inform them, where appropriate that loss mitigation options may be available, and provide them with written notice with info about those options by the 45th day of delinquency.

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Continuity of Contact With Delinquent Borrowers

8. Continuity of Contact with delinquent

borrowers:

Servicers are required to maintain reasonable policies and procedures with respect to providing delinquent borrowers with access to personnel to assist them with loss mitigation options where applicable.

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Loss Mitigation Procedures

9. Loss Mitigation Procedures:

Servicers are required to follow specified loss mitigation procedures for a mortgage loan secured by a borrower’s principal residence, and are prohibited from engaging in so-called “dual tracking” where a servicer is simultaneously evaluating a consumer for loan modification or other alternatives at the same time that it prepares to foreclose.

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Proposed Amendments (Comment Period Ending July 22, 2013)

Prohibition on Foreclosure Referral (definitions of “first notice or filing”)

Designated addresses for error reporting and information requests

Timeliness of requests for info and notices of error Loss Mitigation Procedures

Incomplete applications Short term forbearance plans Time period for borrowers to submit missing inform/docs Time period for borrowers to accept or reject loss mit option Timelines based on date of foreclosure sale Denial of Loan Mod Options

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Part 2(Detail)

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1. Periodic Billing Statements

Creditors, assignees, and servicers must provide a periodic billing statement for each billing cycle that meets specified requirements concerning timing, form and content.

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Creditors, Assignees, and Servicers must provide a periodic statement for each billing cycle containing, among other things:

Information on payments (currently due and previously made)

Fees imposed Transaction activity Application of past payments Contact information for the servicer and housing

counselors Where applicable, information regarding

delinquencies

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Exemptions:

Reverse mortgage loans

Timeshare loans

Coupon book exception for fixed rate loans

Small servicers

Sample forms

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2. Interest Rate Adjustment Notices for ARMS:

Creditors, assignees, and servicers must provide a consumer whose mortgage has an adjustable rate with a notice, prior to the first payment due after the rate first adjusts, and also before payment at a new level is due, that meets specified requirements concerning timing, form and content.

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Notice Prior to First Adjustment Section 1026.20(d) requires notice between

210 and 240 days prior to the first payment due after the rate first adjusts.

Applies to creditors, assignees and servicers.

This notice may contain an estimate of the new rate and new payment.

No Small Servicer exemption.

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Notice Prior to New Payment Level

Section 1026.20(c) also requires notice between 60 and 120 days before payment at a new level is due.

Applies to creditors, assignees and servicers. The current annual notice that must be

provided for ARMs for which the interest rate, but not the payment, has changed over the course of the year, is no longer required.

No Small Servicer exemption. Sample forms.

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3. Prompt Payment Crediting and Payoff Statements:

Servicers must promptly credit periodic payments from borrowers as of the day of receipt and follow other specified procedures.

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Applies to loans secured by the consumer’s principal dwelling.

Generally credit payments as of the day of receipt.

Payments less than the full amount may be held in suspense until full amount in received then applied to account.

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Provide accurate payoff balance no later than seven (7) business days after receipt of a borrower’s written request.

No pyramiding of late fees.

No small servicer exemption.

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4. Force-Placed Insurance:

Servicers are prohibited from charging a borrower for forced-placed insurance coverage unless the servicer has a reasonable basis to believe the borrower has failed to maintain hazard insurance and has provided certain required notices.

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Prohibits force-placed hazard insurance coverage unless the servicer has a reasonable basis to believe the borrower has failed to maintain in coverage.

Requires an initial notice at least 45 days prior to charging the borrower for insurance coverage.

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Requires a second reminder notice no earlier than 30 days after the first notice and at least 15 days before charging the borrower for force-placed coverage.

Cancel forced-coverage within 15 days, if borrower provides proof of insurance coverage and refund premiums paid for overlapping periods.

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Charges related to force-placed insurance generally must be for services actually performed and must bear a reasonable relationship to the servicer’s cost of providing the service.

In the case of an escrow account the servicer cannot force-place insurance where the servicer can pay premiums even when there are insufficient funds in the escrow account.

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Does not apply to hazard insurance required by the Flood Disaster Protection Act of 1973

Small servicer exemption as long as any force-placed insurance is less expensive.

Model forms.

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5. General Servicing Policies, Procedures, and Requirements:

Servicers are required to establish policies and procedures reasonably designed to achieve objectives specified in the rule. The reasonableness of a servicer’s policies and procedures takes into account the size, scope, and nature of the servicer’s operations.

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REQUIREMENTS INCLUDE:

Providing accurate and timely information to borrowers, investors, and courts.

Properly evaluating loss mitigation applications.

Facilitating transfer of information during servicing transfers.

Record Retention.

Maintain for one year after the date the loan is discharged or servicing transferred.

Ability to compile mortgage servicing file within 5 days of a request.

Small servicer exemption.

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6. Error Resolution and Information

Requests

Servicers are required to meet certain procedural requirements for responding to written information requests and complaints of errors.

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Error Resolution and Information Request Requirements are structured similarly re: Scope of written communications to

which servicer must respond Timelines and Notice Requirements Exceptions (e.g. duplicative, overbroad,

untimely) Contact addresses & fees chargeable Subsume QWR Requirements

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Error Resolution: Servicer must comply with error resolution requirements for any written notice from borrower that: Asserts an error; and Includes borrower’s name and information

sufficient to identify the borrower’s loan account; and

States the error the borrower believes has occurred (reasons for belief not required)

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A Servicer Must: Acknowledge borrower’s request for information or

complaint w/in 5 days Correct error or respond with results of reasonable

investigation generally w/in 30-45 days W/in same period provide information or explain

why not available Not charge a fee or req. payment as a condition of

responding to a notice of error or QWR Provide at no cost, w/in 15 days of borrower

request, copies of docs relied on in making “no error” determination (unless confid., proprietary or priv.)

Not furnish adverse info to CRA on any payment that is subject of valid notice of error for 60 days after receipt of error notice

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Eleven categories of violation re error resolution:

1. Failure to accept a payment that conforms to the servicer’s written requirements

2. Failure to apply an accepted payment to principal, interest, escrow, or other charges under the terms of the loan and appl. law

3. Failure to credit a payment to a borrower’s loan account as of date of receipt in violation of TILA

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Error Categories (Cont.):4. Failure to pay taxes, ins. premiums, or

other charges (including those that servicer voluntarily agreed to collect) in a timely manner or refund an escrow acct. balance

5. Imposition of a fee or charge that the servicer lacks a reasonable basis to charge

6. Failure to provide an accurate payoff balance upon request in circumstances required by TILA §129G

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Error Categories (Cont.):7. Failure to provide accurate information to

borrower regarding loss mitigation options and foreclosures, as required by the early intervention requirements

8. Failure to transfer accurate and timely information re borrower’s account to a transferee servicer

9. Making the first foreclosure notice or filing in violation of §1024.41(f) or (j)

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Error Categories (Cont.):10. Moving for a foreclosure judgment or

order of sale or conducting a foreclosure sale in violation of §1024.41(g) or (j)

11. “Any other error” relating to the servicing of a borrower’s mortgage loan (excluding errors re origination, underwriting, sale or securitization)

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Error Resolution and Information Requests (Exceptions)

Servicers not required to acknowledge, investigate, or respond to an error notice or information request or suspend credit reporting if servicer “reasonably determines” that:

1. Request is: duplicative, overbroad, or untimely; 2. Information sought is: confidential, proprietary,

privileged, irrelevant, unduly burdensome. Must notify borrower in writing w/in 5 days

of such determination and the basis thereof

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7. Early intervention with delinquent

borrowers:

Servicers must establish or make good faith efforts to establish live contact with borrowers by the 36th day of their delinquency, promptly inform them, where appropriate that loss mitigation options may be available, and provide them with written notice with info about those options by the 45th day of delinquency.

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Servicer required to establish, or make good faith efforts to establish, live contact with delinquent borrowers not later than 36th day of delinquency and notify of loss mitigation options, if appropriate

Written notice w/ specific content re loss mitigation options not later than 45th day of borrower’s delinquency

Model clauses provided Only 1 written notice required during any

180-day period

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Notice Content: Encourage contact w/ servicer Phone # of assigned contact Servicer’s mailing address If applicable, brief description of loss

mitigation options available If applicable, application instructions CFPB Website or HUD list of

homeownership counselors & HUD toll-free phone # for counselors

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8. Continuity of Contact with delinquent

borrowers:

Servicers are required to maintain reasonable policies and procedures with respect to providing delinquent borrowers with access to personnel to assist them with loss mitigation options where applicable.

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Maintain policies and procedures to accomplish: Assignment of dedicated personnel to delinquent

borrower by 45th day of borrower delinquency Availability of assigned personnel via telephone to

respond to borrower inquiries, provide information, and, as applicable, assist with loss mit. until loan current or 2 consecutive pmts under permanent loss mit. agreement w/o incurring a late charge

Small Servicer Exemption

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9. Loss Mitigation Procedures:

Servicers are required to follow specified loss mitigation procedures for a mortgage loan secured by a borrower’s principal residence, and are prohibited from engaging in so-called “dual tracking” where a servicer is simultaneously evaluating a consumer for loan modification or other alternatives at the same time that it prepares to foreclose.

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Ban on dual tracking: no “first notice or filing req’d by applicable law for any judicial or non-judicial foreclosure process” until 121st day of delinquency

Ensure that “complete” loss mitigation applications are reasonably evaluated before proceeding with foreclosure

Exercise reasonable diligence in obtaining info or docs req’d to complete appl. for loss mitigation options

Acknowledge applic. receipt in writing w/in 5 days

Evaluate application & notify w/in 30 days

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After receipt of “complete”application for loss mitigation option at least 38 days before foreclosure sale, servicer may not proceed with foreclosure sale unless:

1. Servicer has denied application and time for appeal has expired (See below)

2. Servicer has offered loss mitigation option that borrower has declined or failed to accept within 14 days of the offer, or

3. Borrower has failed to comply with the terms of a loss mitigation agreement

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Loss Mitigation Procedures-Appeal

Detailed Reqs for Notice of incomplete App.

If CLMA is received 90 days or more before foreclosure sale date, Borrower has 14 days to appeal denial of loss mitigation option

Servicer must conduct an appeal (by different personnel)and notify borrower of decision w/in 30 days

Borrower has 14 days to respond to appeal offer (or previous offer)

Borrower entitled to be reviewed only once for loss mitigation

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Implementation


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In February the CFPB announced a plan to facilitate implementation of the new rules by January 10, 2014.

Under the Plan the CFPB promises to do the following:

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Coordinating with other federal government regulators that also conduct examinations of mortgage companies.

Ensure all regulators have a shared understanding of the CFPB’s new rules.

Coordinate with Other Agencies

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“Easy-to-understand” written and video summaries of the regulations.

Helpful to smaller operations with limited compliance staff.

In process of being issued.

Plain Language Guides

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Provide guidance on how to comply with the rules.

Updates will address questions raised by industry, consumer groups, or other agencies.

Priority to issues that are important to a large number of providers or consumers, and that critically affect mortgage companies’ implementation decisions.

Expected to begin in the spring.

Updates to the Official Interpretations

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Help servicers prepare for the new rules by providing checklists for implementation plans.

Issued on June 7, 2013. (98 pages) But since then, 2 amendments to Servicing Rule

More in-depth examination procedures are expected later this year by the Federal Financial Institutions Examination Council (FFIEC).

These procedures to be used for self-assessment of readiness and compliance.

Readiness Guides

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The CFPB will give consumers information about the new protections under these rules through a consumer education campaign.

All of above material is available on CFPB’s website.

Educate consumers

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Be prepared for the CFPB when it comes to examine your operation.

Lots of available guidance on where to focus your compliance efforts.

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Supervision and Examination Manual

Last fall, the CFPB released version 2 of its Supervision and Examination Manual.

The manual describes how the CFPB supervises and examines and provides examiners direction on how to determine if companies are complying with the law.

Important to familiarize yourself with the Manual with particular attention to the sections on mortgage servicing.

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Guidance Bulletins

In February, the CFPB issued a Bulletin to mortgage servicers advising them of their legal obligations to protect consumers during loan transfers.

The bulletin indicates that the CFPB is particularly concerned about Lost paperwork; Service interruptions; and Wrongful foreclosures.

The CFPB warned that it will take “appropriate supervisory and enforcement actions” if it discovers violations.

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Supervisory Highlights

Last fall, the CFPB also released its first Supervisory Highlights report.

The purpose of this report is to:

“Signal to all institutions the kinds of activities that should be carefully scrutinized for compliance with law.”

The CFPB found deficiencies in compliance management systems, such as failures to adopt and follow compliance policies and procedures.

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Bottom line: Make sure your board, management and

staff are trained on your compliance policies and procedures.

Make sure your employees actually conduct operations in accordance with your compliance policies and procedures.

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Due diligence to verify the provider understands and is capable of complying with law;

Review policies, procedures, internal controls, and training materials to ensure appropriate oversight of employees that have consumer contact or compliance responsibilities;

In April 2012, the CFPB issued a Bulletin warning that it will hold banks and nonbanks liable for their vendors' misconduct.

The CFPB recommends steps to ensure service providers' compliance:

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Contract provisions establishing clear expectations about compliance, and consequences for violating any compliance-related responsibilities;

Internal controls and ongoing monitoring to determine whether the service provider is complying with the law; and

Prompt action to address any problems identified through the monitoring process.

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First enforcement action against Capital One.

Provides road map to how CFPB will pursue enforcement cases.

Very aggressively!

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Case involves:

Service provider.

“Deceptive Practices.”

Vendor marketed credit card add-on products

“Payment protection.”

“Credit monitoring.”

Cap One denied liability--

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Misconduct was attributed to vendor.

Vendor did not follow script.

But consented to an order requiring improved vendor management and ending alleged deceptive practices.

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Sanctions: Refund $140 million/$25 million Civil Money

Penalty.

OCC parallel action: Civil Money Penalty-- $35 million/$150 million restitution.

Board of Directors has primary responsibility for consumer protection oversight.

Each member of the Board signed the CFPB settlement.

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Trust and Confidence is key.

The examiner wants to believe that the “risk” of noncompliance is under control.

Looking for three things:

1. Competence to run a compliance program.

2. Sufficient resources allocated to support the compliance management program.

3. The intention/commitment to run an effective compliance program.

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The examiner is concerned that unattended compliance risk will cause a problem and he/she will get blamed for it.

If the examiner does not believe the servicer can/will run an effective program, she is much more likely to pursue a formal enforcement action.

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Last October the CFPB announced a policy that would allow appeals of findings in examination reports and supervisory letters.

The appeals process, as outlined in the Bulletin, involves review by a committee that includes management at CFPB Headquarters and representatives of regional offices that were not involved in the matter under review.

Companies under CFPB’s jurisdiction may request a review of a less than satisfactory compliance rating (a 3, 4, or 5) or any underlying adverse finding set forth in the relevant examination report, or adverse findings conveyed in a supervisory letter.

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CFPB Bulletin 2011-04 (Enforcement) Date: November 7, 2011 (updated January 18, 2012)

Before the Office of Enforcement recommends an enforcement case, it may provide the subject with a notice of the nature of the proposed charges and may offer an opportunity to submit a written statement.

The decision whether to give such notice is discretionary.

The Bureau must receive the written statement no more than 14 calendar days after the notice.

If the Office of Enforcement ultimately recommends an enforcement proceeding, the written statement will be included with that recommendation.

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Disclaimer

The views expressed in this presentation are those of the authors individually and do not necessarily reflect the opinions of OSC. Said views, and the materials herein, are for educational and discussion purposes only and should not be construed as legal advice or relied upon in any way as legal advice. Each recipient of these materials is encouraged to obtain advice from a competent attorney whose practice emphasizes mortgage lending and servicing.

92Copyright 2013 Smith Dollar PC

Smith Dollar PC is a premier, AV rated, diversity owned, real estate and financial services law firm providing legal services

to individuals and businesses nationwide.

www.smithdollar.com

The information contained in this presentation is for general informational purposes only and is not intended and should not be construed as legal advice. Please consult an attorney for advice and assistance with your specific legal questions and situations.

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1 osc 2013 annual conference michael r. pfeifer, smith dollar pc

Documents

respa amendments

business purpose loans

tila amendments

federal consumer financial

new requirements

procedures requirements

additional rules

violation of policies