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FDIC enforcement actions released

The list of orders of administrative enforcement actions taken against banks and individuals in April 2015 has been released by the FDIC. Included were one consent order, one prompt corrective action, four removal and prohibition orders, one section 19 order, four civil money penalties, one notice of hearing, and one decision and order. One civil money penalty in the amount of $5,280 was assessed against Premier Valley Bank, Fresno, California, for violations of the Flood Act. Information regarding that order has been posted on the BOL Flood Penalties Watch page.


Foreclosure relief scammers to pay $27.7M

The Consumer Financial Protection Bureau has announced a final judgment by a federal court on a complaint filed in 2014 by the Bureau and the Florida Attorney General against the Hoffman Law Group, its three operators, and four corporate affiliates accused of using deceptive marketing practices and scamming distressed homeowners into paying illegal advance fees. The scam tricked consumers into paying millions of dollars in illegal upfront fees to join frivolous lawsuits that the companies falsely claimed would pressure banks to modify their loans or provide foreclosure relief. The Hoffman Law Group was a law firm set up to give the appearance that consumers in financial distress needing to modify their mortgage loans or save their homes from foreclosure would get specialized help from attorneys. The court found the corporate defendants liable for $11,730,579 -- the full amount of illegal fees paid by consumers -- and ordered them to pay a $10 million civil penalty to the CFPB, in addition to a $6 million civil penalty to the State of Florida.


April mortgage rates decline

The Federal Housing Finance Agency (FHFA) has released its April 2015 Mortgage Index, which indicates:
  • The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 3.78 percent for loans closed in late April, down 2 basis points.
  • The average interest rate on all mortgage loans was 3.78 percent, down 2 basis points from 3.80 in March.
  • The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 3.93 percent, a decrease of 2 basis points.
  • The effective interest rate on all mortgage loans was 3.94 percent in April, down 1 basis point from 3.95 percent.
  • The average loan amount for all loans was $310,600 in April, down $200 from $310,800.


Discriminatory mortgage pricing complaint seeks damages

A joint complaint has been filed in federal court by the CFPB and the Department of Justice (DOJ) against Provident Funding Associates for charging higher broker fees on mortgage loans to African-American and Hispanic borrowers. The agencies also filed a proposed consent order that, if entered by the court, would require Provident to pay $9 million in damages to harmed African-American and Hispanic borrowers. The agencies allege that Provident violated the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers more in total broker fees than white borrowers based on their race and national origin and not based on their credit risk. The DOJ also alleges that Provident violated the Fair Housing Act, which also prohibits discrimination in residential mortgage lending.


Wisconsin bank to pay $200M to settle redlining case

The Department of Housing and Urban Development (HUD) has announced an agreement with Associated Bank, N.A., Green Bay, Wisconsin, to resolve a disparate treatment redlining case, one of the largest redlining complaints brought by the federal government against a mortgage lender. At over $200 million, it is the largest settlement of this kind HUD has ever reached. The complaint filed by HUD alleged that from 2008-2010, the bank engaged in discriminatory lending practices regarding the denial of mortgage loans to African-American and Hispanic applicants, and in and the provision of loan services in neighborhoods with significant African-American or Hispanic populations. Over the next three years, Associated will pay nearly $10 million in the form of lower interest rate home mortgages and down payment/closing cost assistance to qualified borrowers in majority-minority census tracts in the housing market areas of Chicago, Milwaukee, Minneapolis-St. Paul, Racine (WI), Kenosha (WI), and Lake County (IL). In addition, the bank agrees to:
  • Invest nearly $200 million through increased home mortgage lending activity in majority-minority census tracts in these areas;
  • Provide nearly $3 million to help existing homeowners repair their properties in these predominantly minority communities;
  • Pay $1.4 million to support affirmative marketing of loans in the above census tracts
  • Commit $1.35 million for community reinvestment and fair lending education and training;
  • Open four loan production offices in majority-minority census tracts (three in the Chicago area and one in the Milwaukee area), subject to regulatory approval, in addition to three branches Associated has opened or is committed to opening in or near majority-minority census tracts in Chicago, Milwaukee, and Racine since HUD's complaint was filed; and
  • Offer fair housing training to all its employees and agents with substantial residential lending activity within six months and maintain a second level review process for all denied residential loans.


FHFA index notice published

The Federal Housing Finance Agency's recent notice that it is establishing and will maintain a method for assessing the national average single-family house price for use in adjusting the conforming loan limits of Fannie Mae and Freddie Mac has been published [80 FR 30237] in this morning's Federal Register. Comments on the proposal will be accepted through July 27, 2015.


Residential sales prices rise

HUD and the Census Bureau have released their report of new residential sales in April 2015. Sales of new single-family houses were at a seasonally adjusted annual rate of 517,000, 6.8 percent above the revised March rate and 26.1 percent above the April 2014 estimate. The median sales price of new houses sold was $297,300 and the average sales price was $341,500. The seasonally adjusted estimate of new houses for sale at the end of April was 205,000, a supply of 4.8 months at the current sales rate. In addition, the Federal Housing Finance Agency (FHFA) has released its First Quarter 2015 House Price Index (HPI). U.S. house prices rose 1.3 percent in the first quarter of 2015, the fifteenth consecutive quarterly price increase in the purchase-only, seasonally adjusted index. FHFA's seasonally adjusted monthly index for March was up 0.3 percent from February. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.


HUD proposes mortgage form revision

The Department of Housing and Urban Development has published a notice in the Federal Register seeking public comment on proposed revisions to the HUD Addendum to Uniform Residential Loan Application, also known as the 92900-A, the loan certification document signed by lenders. HUD is providing a 60-day comment period ending on July 14, 2015, on proposed revisions to the form, which include changes to:
  • Differentiate between the initial and final Uniform Residential Loan Application;
  • Revise mortgagee certification on debarment and suspension to be loan specific;
  • Remove references to Handbooks no longer in use by Single Family Housing;
  • Update language regarding acceptable sources of funds;
  • Provide current non-discrimination language; and
  • Update terminology reflected in the new Single Family Housing Policy Handbook 4000.1.


Fannie and Freddie announce new seller/servicer requirements

The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac (GSEs) are issuing new operational and financial eligibility requirements for all current and potential single-family mortgage Seller/Servicers. Statements and FAQs regarding the requirements were also issued by the two GSEs. The operational requirements become effective no later than September 1, 2015 and the financial requirements become effective December 31, 2015.


Robocallers to pay $1.7M for credit card scheme

The Federal Trade Commission has announced that Universal Processing Services (UPS) of Wisconsin, LLC, a payment processor, and telemarketer Hal E. Smith and his company HES Merchant Services Company, Inc. (HES), the defendants in a federal district court case filed by the agency have been jointly ordered by the court to pay $1,734,972 to the Commission. The money will be used to provide refunds to defrauded consumers. The court held Smith and HES liable for 11 violations of the FTC Act and the Commission's Telemarketing Sales Rule (TSR), based on their participation in a deceptive telemarketing scheme purporting to be a credit card interest rate reduction service that used robocalls to solicit consumers. The defendants failed to disclose the identity of the person(s) responsible for placing the robocalls and unlawfully called numbers that had been registered on the FTC's Do Not Call Registry.


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