Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 98 posts in Mortgages.

Michigan Supreme Court Holds Full Credit Bid Does Not Impact Lenders’ Right to Recover From Third Parties

In an important ruling for mortgage lenders and servicers, the Michigan Supreme Court clarified in Bank of America v First American Title Ins Co, Docket No. 149599 (2016) the impact of a full credit bid—when a lender bids the full amount of the outstanding debt at a foreclosure sale—on a lender’s ability to bring claims against a third party following foreclosure. In doing so, the Supreme Court expressly overruled a previous holding by the Court of Appeals in New Freedom Mtg Corp v Globe Mtg Corp, 281 Mich App 63; 761 NW2d 832 (2008). Read More ›

The Fifth Circuit Upholds MERS as a Proper Deed of Trust Beneficiary and Affirms Limit on Borrowers’ Standing to Challenge Assignees’ Enforcements of Obligations

In Ferguson v. The Bank of New York Mellon et al. (5th Cir. Oct. 1, 2015), the Fifth Circuit recently upheld the validity of deed of trust assignments from Mortgage Electronic Registrations Systems (“MERS”) to assignees under Texas state law, if the relevant deed of trust specifically designates MERS and gives MERS the right to exercise interests in those deeds of trust. The Court also reaffirmed previous cases limiting obligors’ standing to challenge assignments of obligations to grounds that void the relevant assignments. Read More ›

CFPB’s New Rule Meant to Enhance Consumer Mortgage Information and Ease Reporting Requirements

On October 15, 2015, the Consumer Financial Protection Bureau (“CFPB”) finalized a rule designed to update the kind of information reported under the Home Mortgage Disclosure Act (“HMDA”) and ease reporting requirements on smaller financial institutions. According to CFPB director, Richard Cordray, the new rule will “shed[] more light to foster better understanding of the market, and also ensur[e] that lenders have sufficient time to come into compliance.” Read More ›

The Sixth Circuit Holds a Limited Liability Company is a "Person" Under the FDCPA

Recently, the Sixth Circuit held a limited liability company is a "person," with standing to sue under the Fair Debt Collection Practices Act ("FDCPA"). Anarion Investments, LLC v. Carrington Mortgage Services, LLC, 794 F.3d 568, 2015 U.S. App. LEXIS 12670 (6th Cir. Tenn. 2015). This decision could lead to suits brought by LLC's and other legal entities, seeking to expand the holding in AnarionRead More ›

First Circuit Confirms that Servicers’ Delinquency Advances Do not Impede Foreclosure

An important appellate court ruling has rejected what it termed a “crafty” argument, which has been advanced by many attorneys in the past several years on behalf of defaulted mortgagors seeking to avoid foreclosure. The United States Court of Appeals for the First Circuit has held that delinquency advances made by servicers to mortgage securitization trusts were not made on behalf of the defaulted borrowers, and therefore foreclosures on the subject properties could proceed. Read More ›

The Fed Confirms That Credit Extension to Subprime Borrowers Remains Low

In its August 2015 Quarterly Report on Household Debt and Credit (the “Report”), the Federal Reserve Bank of New York confirms that new mortgage loans to subprime borrowers remain incredibly low, with just 8 percent of new mortgages given to borrowers whose credit scores were below 660. According to a blog post accompanying the Report, “Underwriting standards for mortgages have loosened only slightly in the years since the Great Recession.” Read More ›

CFPB Releases Results of Its eClosing Pilot Program

The CFPB recently released the report of its study on the benefits of electronic mortgage loan closings also known as “eClosings” that it commenced in April 2014. eClosings are mortgage closings that rely on technology for borrowers to view and sign closing documents electronically. Read More ›

Some Banking Products Become Subject to the Military Lending Act

On July 21, 2015, which also happened to be the fifth anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Department of Defense issued a final rule amending changes to the rule that implements the federal Military Lending Act (“MLA”). The MLA, which was passed in 2006 to provide certain protections for active duty service members and their dependents in consumer credit transactions, caps the interest rate on covered loans at 36 percent. The amended rule expands existing coverage of various credit products and imposes new requirements for those products that are covered. A proposed version of the rule had previously been published in the Federal Register in September 2014.  Read More ›

Sixth Circuit Affirms that Michigan Mortgagees Need Not Disclose Who Owns the Note to Foreclose, and Borrowers Cannot State a Negligence Claim Based on Alleged Duties Under HAMP

In an opinion issued on July 6, 2015, which has been recommended for publication, the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of several common claims made by borrowers in foreclosure-related litigation. In Rush v. Freddie Mac, the plaintiffs challenged a foreclosure on four grounds: they alleged that (1) Bank of America lacked standing to foreclose because there was no chain of title evidencing ownership of the loan; (2) Freddie Mac negligently failed to evaluate plaintiffs’ loan under the Home Affordable Modification Program (“HAMP”); (3) the foreclosure violated Michigan law; and (4) foreclosure by advertisement violated their due process rights. Read More ›

FHA Issues New Methodology for Lenders to Report Single-Family FHA Loan Defects

On June 18, 2015, the Federal Housing Administration (FHA) posted the methodology (Single Family Loan Quality Assessment Methodology or “Defect Taxonomy”) it intends to use to categorize loan defects found in single-family FHA endorsed loans. The Defect Taxonomy will inform when a lender must indemnify the FHA. “The framework, part of the ‘Blueprint for Access,’ centers on three core concepts: identifying a defect, capturing the sources and causes of a defect and assessing the severity of a defect.” Press Release, FHA Proposes Clearer Rules For Lenders With Updated Defect Taxonomy, (June 18, 2015).  Read More ›