follow the link to an article worth reading if you are a lender or title insurer

It is this holding that resulted in most of the substantial increase in the disgorgement amount ordered by the Director. The ALJ had held that the RESPA violations occurred at the time of the closing of the underlying loans, and thus limited disgorgement to those loans that had closed after July 21, 2008 (three years prior to the CFPB’s gaining its authority to bring administrative enforcement actions). Director Cordray instead included all payments made by the mortgage insurers to Atrium after July 21, 2008, regardless of when the underlying loans closed. This substantially expanded the number of payments subject to disgorgement.

http://www.jdsupra.com/legalnews/cfpb-issues-final-decision-in-in-re-phh-54552/

Nine title companies run by one employee in one office?

A Kentucky law firm is in the crosshairs of the Consumer Financial Protection Bureau for its operation of nine title insurance companies.

The bureau sued the six-lawyer Louisville firm, Borders & Borders, on Thursday, claiming the title companies were used to pay kickbacks for work referrals, report the Wall Street Journal Developments Blog, the Louisville Courier-Journal, and the National Law Journal.

The suit (PDF) alleges the law firm paid for referrals by operating nine joint-venture title insurance companies with local real-estate agents and mortgage brokers. The nine companies didn’t have separate office space and were operated by one law firm worker, the suit says. The CFPB claims the split profits for title work were illegal kickbacks that violated the Real Estate Settlement Procedures Act.

http://www.abajournal.com/news/article/did_title_companies_disguise_kickbacks_law_firm_sued_by_consumer_agency_den/

But principals at the firm publicly disagreed with the CFPB's findings.

"This case concerns a number of title agencies that were affiliated with our firm several years ago," Borders & Borders said in a statement. The firm calls the title agencies 'affiliated business arrangements,' and says they are "expressly allowed by RESPA."

"There were disclosures to every consumer, as required by the statute, and in every instance in which title insurance was issued through the agencies, the consumer approved," the law firm said. "We note that the CFPB does not allege that there was any consumer harm, or that any consumer paid a penny more for title insurance issued through the agencies in question. Instead, the CFPB is trying to enforce its own version of rules that are not only not in the statute but which have been declared unconstitutional by a United States District Court. We are very disappointed by the CFPB’s conduct, and we will certainly defend the case vigorously."

The Department of Housing and Urban Development kicked off the initial investigation, prompting Borders to shut down its joint ventures. The case was then moved to the CFPB in July 2011 when the bureau obtained RESPA enforcement authority.

http://www.housingwire.com/articles/27619-cfpb-hits-kentucky-law-firm-with-respa-suit

Wow, a request for a kickback and another request to collude to defraud a lender all in the same week.

This post goes out to mortgage lenders with a shout out to not let your guard down.  Loan officers need training to understand what they can and cannot do.

This post also goes out to title insurance companies with a shout out to not let your guard down. Title agents need training to understand what they can and cannot do.

When  loan officer calls and wants special pricing for their transaction, we say no.  We don't even give ourselves special pricing when we do our own transactions.  We keep the slate clean.

When a loan officer tells real estate agents and the borrower that "they don't need to know" about an addendum, we help them understand that they are colluding to defraud the mortgage lender.

We have to stand our ground to support good practices and have a zero tolerance for RESPA violations and fraud.  Don't you agree?

RESPA violation? What do you think?

We've got a regional law office soliciting business from mortgage lenders by offering to perform telemarketing on their existing customer base. The deal is that they solicit refinance applications for the lender in exchange for the guarantee of the title order.

Is this a RESPA violation? I think so. What do you think?


Interestingly, we had a closing the other day in which the seller had been referred to this law office by the listing agent for deed prep. This law firm charged $195 which is far higher than most law firms in the area, besides which the seller was eligible for free deed prep by our office since the buyer had opted into the Choose and Save program.

Add to that - the law firm NEVER delivered the deed to us or to the agent or to the seller. They showed up empty handed so we used the fax draft from our file. Some service, huh?

When I run across a competitor like this, I do shake my head. They are all about giving something to get something but it's never about giving the consumer a good deal.

We at The Closing Specialists made our choice long ago. We are consumer-centric in all aspects of our business. Mortgage lenders and real estate agents who care about the quality of service and the cost of settlement services direct orders to our office and I can sleep at night.