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The Legal Description Edition
May 26, 2014
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Looking at liability from the lender’s perspective
Posted Date: Thursday, May 22, 2014
Lender liability has been a hot topic in the title insurance and settlement services industries for more than two years now, since the Consumer Financial Protection Bureau (CFPB) came out with a bulletin reminding lenders of their liability for the actions of their third-party providers. The Office of the Comptroller of the Currency shortly thereafter issued a bulletin to expand on the obligations it felt lenders had for third parties, which was originally issued in 2001.
Since that time, the industry has begun to figure out ways to ensure the lenders they work with that they are in compliance with necessary laws and regulations and protect consumers. Best practices have been outlined and industry members are putting together policies and procedures to outline their adherence to these requirements.
During the American Escrow Association’s (AEA) 2014 Conference, lenders shared with attendees their perspective on the liability that has been placed on them and how this will impact the way the new mortgage disclosures are implemented.
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Untangling seller finance issues under Dodd Frank
Posted Date: Thursday, May 15, 2014
The Dodd-Frank Wall Street Reform and Consumer Protection Act has changed the world of residential mortgage lending significantly and will continue to do so as the Consumer Financial Protection Bureau (CFPB) continues to issue its required rules and studies on the industry. One area of confusion regards seller financers. During Attorneys’ Title Fund Services LLC’s 50th Annual Assembly, Special Counsel for Governmental and Industry Relations R. Norwood Gay explained the new rules governing seller financing.
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Title insurer, bank seek to dismiss claims over bad foreclosure
Posted Date: Wednesday, April 9, 2014
After successfully preventing their lender’s attempt to obtain a deficiency judgment because the lender refused to remove a lien on their property and then foreclosed, a couple sued several entities, including a title insurer and the bank that held the questionable lien. Read on to find out what happened when the bank and insurer sought to dismiss the claims against them.
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Insurer seeks dismissal of coverage dispute over air rights filing
Posted Date: Tuesday, April 8, 2014
A property owner purchased a fee interest in property in Brooklyn and air rights to contiguous property. It applied for a construction permit, but was denied because its certification of interested parties omitted certain necessary parties. It sued its title insurer for failing to submit the certification of interested parties on time.
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Homeowners seek defense of easement dispute
Posted Date: Thursday, April 17, 2014
After being unsuccessful in filing a quiet title action against the adjoining property owners over an easement dispute, the plaintiff homeowners submitted a claim for defense to their title insurer. The title insurer denied the claim, asserting the suit was excluded from coverage. The homeowners then sued the title insurer for breach of duty. The case eventually went before the Supreme Court of Nebraska.
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House Financial Services Committee passes Mortgage Choice Act
Posted Date: Tuesday, May 13, 2014
The House Financial Services Committee passed the Mortgage Choice Act, which makes adjustments to the Truth in Lending Act (TILA) definition of fees and points to ensure greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule.
The bill would modify the criteria for exclusion from the computation of points and fees of certain reasonable charges elsewhere exempted from the computation of the finance charge in exclusions of credit secured by an interest in real property. It would exclude from points and fees any such reasonable charges even though a creditor receives compensation, but only in so far as the creditor or its affiliates retains the compensation as a result of their participation in an affiliated business arrangement.
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Arizona adopts CPL legislation
Posted Date: Monday, May 5, 2014
Arizona Gov. Jan Brewer has signed legislation allowing title insurers to provide closing protection letters to any person that is a party to a transaction in which a title insurance policy will be issued. The bill, SB 1047, was introduced by Sen. Steve Yarbrough and Sen. Kate Brophy McGee.
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Maryland governor signs premium reserves bill
Posted Date: Wednesday, May 7, 2014
Maryland Gov. Martin O’Malley signed legislation that alters the formula in accordance with which a title insurer domiciled in the state reduces the reserves applicable to specified contracts of title insurance for purposes of a statutory or unearned premium reserve. It also alters a provision of law relating to a certification that a title insurer is required to file with its annual report.
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Illinois General Assembly passes bill requiring criminal background affidavit
Posted Date: Tuesday, May 13, 2014
The Illinois General Assembly passed a bill that would require every application for registration of a title insurance agent must include a signed and notarized affidavit of the applicant, affirming that the applicant has never been convicted of a felony or misdemeanor involving a crime of theft or dishonestly.
It would affirm that the applicant and every owner, officer, director, principal, member or manager of the applicant for registration of a title insurance agent has never been convicted or pled guilty to any felony or misdemeanor involving a crime of theft or dishonesty. Alternatively, the affidavit could accurately disclose any such felony or misdemeanor.
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Simon Says: Tips for making real estate transactions close smoothly
Posted Date: Thursday, May 15, 2014
When Kerri Anne Schultz, partner in Fountain, Schultz & Associates PL in Navarre, Fla., practices law and handles closings, she focuses on Simon says.
“[There are] three major issues you want to focus on to have an effective practice: litigation avoidance, superior customer service and last but not least, elimination of errors,” she said during Attorneys Title Fund Services’ 50th Annual Assembly.
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D.C. mayor appoints acting commissioner of DISB
Posted Date: Wednesday, May 7, 2014
Washington, D.C. Mayor Vincent Gray announced the appointment of Chester McPherson as acting commissioner of the Department of Insurance, Securities and Banking. McPherson has served as interim commissioner since Nov. 17, 2013, and prior was the deputy commissioner of market operations.
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Six indicted for roles in $30M Long Island mortgage fraud conspiracy
Posted Date: Wednesday, May 7, 2014
An indictment was unsealed May 6, charging six men with carrying out a $30 million bank fraud conspiracy by fraudulently inflating the prices of homes for sale and then obtaining mortgages that far exceeded the true collateral value of properties in Nassau and Suffolk Counties. Through his mortgage banking company, defendant Aaron Wider and his co-conspirators allegedly then re-sold these “toxic” mortgages to banks and other investors in the secondary mortgage market, causing millions in losses when the loans went into foreclosure. Four of the defendants were arrested presented for arraignment at the United States Courthouse in Central Islip, N.Y., before U. S. Magistrate Judge Gary Brown. Of the remaining two defendants, one was taken into custody in Florida, while another is scheduled to surrender to federal agents tomorrow in Central Islip.
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Associations urge support of eminent domain amendment
Posted Date: Tuesday, May 27, 2014
Several real estate associations sent a letter to the chairman and ranking member of the Senate Banking committee urging them to support an amendment to S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013.
Fourteen associations, including the American Land Title Association, the American Bankers Association, the Financial Services Roundtable and the U.S. Chamber of Commerce, urged committee members to support the proposed amendment, put forth by Sens. Pat Toomey, R-Pa., and Tom Coburn, R-Okla.
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Dodd Frank Update to offer tech training surrounding QM/ATR
Posted Date: Thursday, May 15, 2014
In a fast-pace business world relying heavily on technology to conduct transactions, it is becoming more important than ever for banks and mortgage lending institutions to understand how technology plays a crucial rule in complying with state and federal laws and regulations. Knowing what your institution needs for smooth business processes and compliance assurance is a must. But what are the sticking points? What does your technology checklist entail? Are you using the right platform for your institution?
Join your colleagues, the staff of Dodd Frank Update and sponsor Medallion Analytics for a 75-minute webinar on Wednesday, May 21, 2 p.m. ET, to learn about technology’s role in implementing Dodd-Frank regulations.
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Maryland Governor signs title commitment bill
Posted Date: Thursday, May 15, 2014
Maryland Gov. Martin O’Malley signed a bill that alters the specified information a title insurer is required to include in specified disclosures, specifying that the commitment is not a representation as to the state of title and does not constitute a specified abstract.
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Talking to lenders about the new forms
Posted Date: Thursday, May 15, 2014
Next year, business practices will change dramatically and lenders and title agents will have to work even closer together to close real estate transactions. This is all because in August, they will be required to issue new Loan Estimate forms and Closing Disclosure forms.
Gone will be the initial and final Truth in Lending Disclosure and the Good Faith Estimate and HUD-1 Settlement Statement. Instead, borrowers will be provided with combined disclosures designed by the Consumer Financial Protection Bureau (CFPB). Along with the forms are new regulations industry members will have to follow.
The most important thing agents can begin doing is having discussions with their valued lender partners about how the lender plans to proceed next August. This is critical because they are the ones who will ultimately be on the hook for what happens during the entire transaction, and the rule states that the lender is responsible for the forms but may use a settlement service provider to do so.
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Missouri allows for regulatory reporting online
Posted Date: Tuesday, May 13, 2014
In light of the Consumer Financial Protection Bureau’s recent announcement on eClosings, this bit of news intrigued me.
The Missouri Department of Insurance announced it has created online reporting to allow title insurers to electronically submit regulatory reporting. Title insurers may now submit their T-6A and T-6B forms online. The T-6A form is the “Missouri Title Insurer’s Onsite Review Report;” the T-6B form is the “Missouri Title Insurer’s Onsite Review Sampling Methods Report.”
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Straw-buyer coordinator pleads guilty to role in mortgage fraud conspiracy
Posted Date: Tuesday, May 13, 2014
The U.S. Attorney for the District of Connecticut announced that Taimur Aurora, 40, of Stamford, Conn., waived his right to indictment and pleaded guilty before Chief U.S. District Judge Janet Hall in Bridgeport to conspiring to defraud financial institutions through an extensive mortgage fraud scheme that involved dozens of properties in Fairfield County.
According to court documents and statements made in court, between 2005 and 2013, Aurora participated in a mortgage fraud conspiracy that involved the purchase of numerous single and multi-family properties, primarily in Bridgeport and Stamford.
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NS3 Preview: Keynote to stress changing expectations for third-party vendors
Posted Date: Tuesday, May 13, 2014
The Consumer Financial Protection Bureau’s (CFPB) efforts to streamline mortgage disclosures and the closing process will likely demand heightened cooperation between lenders and settlement services providers in the coming months. However, regulators’ vendor management expectations are already having an impact on the lender/service provider relationship. In a keynote speech at October Research, LLC’s 2014 National Settlement Services Summit (NS3) in June, Mike Flynn, executive vice president and general counsel with Flagstar Bank, will describe what lenders need from their settlement services providers to remain compliant.
“The question of third-party vendor management for lenders is a growing area of focus, emphasized by the recent guidance regulators issued,” Flynn said.
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Associations urge support of eminent domain amendment
Posted Date: Wednesday, May 7, 2014
Several real estate associations sent a letter to the chairman and ranking member of the Senate Banking committee urging them to support an amendment to S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013.
Fourteen associations, including the American Land Title Association, the American Bankers Association, the Financial Services Roundtable and the U.S. Chamber of Commerce, urged committee members to support the proposed amendment, put forth by Sens. Pat Toomey, R-Pa., and Tom Coburn, R-Okla.
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Title agent, ringleader found guilty of mortgage fraud conspiracy
Posted Date: Wednesday, May 7, 2014
U.S. Attorney A. Lee Bentley III announces that a federal jury found James Fidel Sotolongo, 48, of Port Orange, Fla., guilty of one count of conspiracy and eleven counts of bank fraud. The jury found Stephanie Musselwhite, 52, of Daytona, Fla., a title agent in Orlando, guilty of one count of conspiracy, nine counts of bank fraud, and one count of making false statements to a federally insured financial institution. Realtor Ramara Garrett, 35, of Port Orange, was acquitted of conspiracy and making false statements to a federally insured financial institution. Sotolongo and Musselwhite each face a maximum penalty of five years in federal prison on the conspiracy count, and a maximum of 30 years’ imprisonment on each of the remaining counts. In addition, both face fines of $250,000 and a five-year term of supervision. The sentencing hearing is scheduled for July 28.
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NS3 PREVIEW: Speakers address strategic partnerships and CFPB enforcement
Posted Date: Monday, May 5, 2014
Strategic partnerships can be highly beneficial for the parties involved. With the benefits, however, also come some risks if the venture is not compliant. Compliance is crucial to avoiding a RESPA violation and enforcement action by the Consumer Financial Protection Bureau. During October Research, LLC’s 2014 National Settlement Services Summit in June expert attorneys will discuss the ins and outs of complying with the laws and regulations governing affiliated business arrangements and marketing services agreements, as well as CFPB enforcement and increased regulatory scrutiny.
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North Carolina State Bar sues lien-filing service for UPL
Posted Date: Monday, May 5, 2014
The North Carolina State Bar filed a complaint for declaratory and injunctive relief against a commercial lien-filing service for alleged unauthorized practice of law (UPL). The lien-filing service counterclaimed for declaratory and injunctive relief. The case went before a state superior court on cross-motions for judgment on the pleadings.
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Maryland title agent sentenced for role in $4.8M mortgage fraud scheme
Posted Date: Monday, May 5, 2014
U.S. District Judge James Bredar sentenced Bonnie Kathleen Kreamer, a/k/a Bonnie Meehan, 49, of Riva, Md., to 51 months in prison, followed by three years of supervised release, for conspiring to commit wire fraud in connection with a mortgage fraud scheme that resulted in losses of more than $4.8 million. Judge Bredar also ordered Kreamer to pay restitution of $2,499,048 to the victims and to forfeit $4.8 million.
The sentence was announced by U.S. Attorney for the District of Maryland Rod Rosenstein; Special Agent in Charge Stephen Vogt of the Federal Bureau of Investigation; Special Agent in Charge Brian Murphy of the U.S. Secret Service Baltimore Field Office; Special Agent in Charge Michael Tompkins, Washington Field Office, U.S. Department of Justice Office of the Inspector General; Howard County Police Chief William McMahon; and Howard County State’s Attorney Dario Broccolino.
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Wichita man convicted for role in $2.7M mortgage fraud scheme
Posted Date: Monday, May 5, 2014
Tammy Dickinson, U.S. attorney for the Western District of Missouri, announced that a former Wichita, Kan., man was convicted in federal court of his role in a $2.7 million mortgage fraud scheme.
Terrence Matthew Brown, also known as Terry Brown, 48, of Round Rock, Texas, formerly of Wichita, was found guilty of conspiracy to commit wire fraud and five counts of wire fraud.
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