Know Before You Owe > Consumer Financial Protection Bureau

Every day, consumers shopping for mortgage loans get a mortgage disclosure with basic facts about the loan they’ve applied for. You see the disclosure before you sign on the dotted line – it’s what you know before you owe. We need your help in designing a single, simpler disclosure.

We’ve already had one round of feedback on our draft redesigns (Design 1, Design 2) and we received more than 10,000 comments from consumers, designers, housing counselors, lenders, and industry stakeholders across the nation. We’ll be revising these drafts, and asking for more feedback, in late June.

We'll be in touch!

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What Is A Mortgage Disclosure Form?

For most Americans, buying a home means taking out a mortgage loan. If you recently applied for a mortgage loan, you received two forms required by federal law: A two-page Truth in Lending disclosure form and a three-page Good Faith Estimate. They’re supposed to help you pick the mortgage product that’s best for you. But if you’ve actually applied for a mortgage recently, what you probably remember most are lots of technical terms and long lists of fees.

These disclosures don’t work if they give you too much information or if the information they provide isn’t what you need. They don’t work if they drown you in detail or leave out crucial information, like warnings about hidden risks. Can the cost of your loan go up? When, why, and by how much? Complicated disclosures can make it hard to answer or even ask the right questions, and many consumers don’t know what to ask until it’s too late.

Why Are You Combining The Two Forms?

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the Consumer Bureau, mandated that we combine these two forms into one.

It’s also because that’s what you’ve told us can help make markets work better for consumers. From our early outreach to community banks, to our discussions with everyday American families, we’ve heard that this is an area where the CFPB can make a real difference.

We are making this project a priority because today, the two current forms have overlapping information and can be confusing to consumers. They also needlessly drive up costs and the regulatory burden on lenders. So, we are going to combine the two forms into one and make them simpler to understand. That’s right – fewer, simpler government forms! We’ve been talking to lots of experts about what makes a form easy to use and understand.

In the end, a new disclosure will have to work for the consumers and lenders who rely on them every day. We need to hear your voice from the beginning of the process. So, as we work to create a better disclosure form, we will show you early drafts throughout the process, and give you a quick, simple way to give us your opinion on what works and what doesn’t.

How Can I Get Involved Right Now?

We know your time is valuable. There are three ways you can get involved right now:

Sign Up

Enter your e-mail address in the form at the top of this page, and we’ll let you know when it’s time to weigh in.

Spread the word

Do you know someone who owns a home, or may be thinking of buying one? Maybe your friend is a graphic designer who is passionate about conveying information, or your uncle is a tax attorney who knows how government forms could be made better. If you’ve reached this page, then you’ve discovered an important way for others in your life to make a real difference for consumers.

Please let them know, via Twitter, Facebook, or

e-mail

or just by talking about it at home, at school, with your faith community, or anywhere else you happen to be.

Learn more

Read the blog posts we've written about this process.

via consumerfinance.gov

Have you seen this? The new Consumer Financial Protection Bureau has it's own website now. They are talking about combining forms used at closing and are asking for input. I suggest we give it to them.

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New York Appeals Court Rejects MERS Foreclosure - Daniel Fisher - Full Disclosure - Forbes

By DANIEL FISHER

Image by Getty Images via @daylife

 

A New York appeals court has thrown out a foreclosure proceeding involving MERS, the national registry for mortgages that tracks millions of individual loans behind mortgage-backed securities. The case sets a bad precedent for MERS in New York, but may not cause upheaval nationwide.

In a 7-page ruling issued Friday, the New York appellate court threw out Bank of New York’s foreclosure suit against Stephen and Frederica Silverberg, who were allegedly behind on $479,000 in loans. Bank of New York is the trustee for the trust containing mortgages, one them presumably the Silverberg’s, that were bundled together and sold to investors as bonds. Unfortunately for the bank, the court ruled that MERS, the bookkeeping entity set up to keep track of those mortgages in land-records offices around the country, couldn’t give BONY the authority to foreclose because it didn’t possess the underlying note, or Silverberg’s promise to pay.

“A transfer of the mortgage without the debt is a nullity, and no interest is acquired by it,” the court ruled.

Public Citizen said the decision could have “far reaching consequences,”  but not everyone agrees this is a big deal. Even the lawyer for the Silverbergs, Stephen Silverberg himself, acknowledged his was an unusual situation. Bank of New York “admitted it didn’t have the note” proving it was the rightful owner of the collateral, Silverberg told me.

“They’ve had three years to find it and they haven’t,” he said. Without both the note and the mortgage, or legal document establishing the home as collateral for the note, the court said a lender can’t foreclose.

Judges in other states have made similar rulings, but in states with non-judicial foreclosure rules the courts aren’t involved. MERS was formed in 1993 by lenders to track mortgages and serve as a nominee in land records. That way, the lenders would have a central registry and wouldn’t have to pay transfer fees each time the underlying loans were sold and packaged into pools. The pools, in turn, are managed by a trustee who processes the payments and routes the money to holders of various securities created from them.

The New York appeals court acknowledged it could be creating trouble for those investors.

This Court is mindful of the impact that this decision may have on the mortgage industry in NewYork, and perhaps the nation. Nonetheless, the law must not yield to expediency and the convenienceof lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules thatgovern real property.

Silverberg, who represents other homeowners in foreclosure actions, was similarly unapologetic. He declined to say whether he was paying his mortgage, or intended to do so.

“The question here is some bank is coming forward saying the homeowner owes them hundreds of thousand of dollars but can’t present any evidence of ownership,” he said. “In New York, in order to evict the owner you must prove you have right to do so. This is the law and no apologies for enforcing your rights. They really pushed when they had nothing behind them.”

via blogs.forbes.com

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U.S. Supreme Court Poised To Decide whether To Review RESPA Standing Case

The U.S. Supreme Court is poised to rule on whether it will review a case in which the U.S. Court of Appeals for the Ninth Circuit held that the plaintiff did not need to show she was overcharged to have standing to assert a claim based on a violation of the Real Estate Settlement Procedures Act’s (RESPA) anti-kickback prohibition.

RESPA Section 8 prohibits the payment or receipt of kickbacks in exchange for referrals of “business incident to or part of a real estate settlement service” and imposes statutory damages equal to three times the amount of the charge for the settlement service. In First American Financial Corporation v. Edwards, the Ninth Circuit ruled that the plaintiff could assert a RESPA claim whether or not an alleged unlawful referral agreement between her settlement agent and her title company increased the amount she paid for the title insurance. According to the Court, the plaintiff’s allegation that her title insurance payment was based on an unlawful referral agreement established sufficient injury to give her standing.

In response to a Supreme Court invitation, the Acting U.S. Solicitor General filed an amicus curiae brief on May 19, 2011, to provide the Obama administration’s view on the case. The brief urged denial of the certiorari petition on the grounds that the Ninth Circuit had correctly decided the case. It also disagreed with the title company’s argument that the RESPA question presented a circuit conflict because decisions of the Seventh and Fifth Circuits have interpreted Section 8 to provide a cause of action only to a plaintiff who has suffered concrete economic injury. According to the brief, the Seventh Circuit did not adopt the title company’s Section 8 reading and the Fifth Circuit’s decision was nonprecedential. The brief argued that because the Ninth Circuit’s ruling was consistent with the only precedential court of appeals decisions, those issued by the Third and Sixth Circuits, there was no conflict warranting Supreme Court review.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). The Group has been actively involved in defending many RESPA cases, including cases raising the standing issue. For more information, please contact group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; John L. Culhane, Jr., 215.864.8535 or culhane@ballardspahr.com; Martin C. Bryce, Jr., 215.864.8238 or bryce@ballardspahr.com; Mercedes K. Tunstall, 202.661.2221 or tunstallm@ballardspahr.com; Keith R. Fisher, 202.661.2284 or fisherk@ballardspahr.com; Barbara S. Mishkin, 215.864.8528 or mishkinb@ballardspahr.com; or Mark J. Furletti, 215.864.8138 or furlettim@ballardspahr.com. 

 

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The MERS/Treasury Settlement Agreement

Very weak language, but then again MERS is a corporate animal that is truly too big to fail. The larger question is how we all allowed this to get so out of control and past the point of no return.  The next question is, where do we go from here?  How do people get back to work?  How do Americans regain any respect or trust for our government?  How do our courts step back into a very messy public space and restore order?

The emperor has no clothes, that is the cancer.  This is merely a symptom…..read from the consent agreement….

In connection with services provided to Examined Members related to tracking,and registering residential mortgage loans and initiating foreclosures (“residential mortgage andforeclosure-related services”), MERS and MERSCORP:

(a) have failed to exercise appropriate oversight, management supervision andcorporate governance, and have failed to devote adequate financial, staffing, training, and legalresources to ensure proper administration and delivery of services to Examined Members; and

(b) have failed to establish and maintain adequate internal controls, policies,and procedures, compliance risk management, and internal audit and reporting requirements withrespect to the administration and delivery of services to Examined Members.

By reason of the conduct set forth above, MERS and MERSCORP engaged inunsafe or unsound practices that expose them and Examined Members to unacceptableoperational, compliance, legal, and reputational risks.

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Title Junction, Cape Coral And Fort Myers Title Insurance Company, Focuses On Continuing Education

June 10, 2011

Jennifer Ferri of Fort Myers and Cape Coral escrow company, Title Junction, is attending a continuing education seminar on June 14th. The knowledge will allow Ferri to better serve clients with their Fort Myers and Cape Coral title insurance needs.

June 10, 2011 /24-7PressRelease/ -- Summer may mean taking a break for many people, but not for Jennifer Ferri of Title Junction. Ferri will be busy enhancing her knowledge of real estate title contract ethics for title agents and Florida's promulgated rates and rate calculations.

Jennifer Ferri is the owner and operator of Title Junction, serving all of Florida and located in Fort Myers. Real estate title insurance, escrow and notary services and real estate closings are just some of the services offered by Title Junction. Ferri's dedication to professional continuing education has been instrumental to the success of the company, based in Fort Myers. Title insurance is just one service provided by Title Junction, where customers can also receive assistance with For Sale By Owner and commercial and residential property contracts, and many real estate financing services including refinancing, FHA and VA loans, reverse mortgages and more.

On June 14th, Ferri will participate in an educational seminar provided by Title Junction's underwriter, Old Republic National Title Insurance Company. The seminar will cover ethical issues for title agents with the new 2010 FAR/BAR contract and a discussion of promulgated rates and rate calculations.

The FAR/BAR contract forms are the most widely used residential real estate contract forms in Florida. They are contracts that have been approved by both the Florida Association of Realtors (FAR) and the Florida Bar Association (BAR). The new 2010 forms have updated "As is" clauses and several new riders.

Promulgated rates are the rates charged by title insurance companies for title insurance. The cost generally varies according to the insurable value of the property. Rates are set by the State of Florida, Department of Insurance.

"Continuing education courses serve two purposes for me: I am kept abreast of changes in law and policies in the industry and this knowledge allows me to better serve my clients. At Title Junction, customer service is our number one priority. One way that we provide exceptional service is by being available for questions. The concerns may be about the entire real estate closing process or just portions of it such as the promulgated rates, escrow or contracts. If I'm well-educated on the subjects then I can better guide my clients and help them feel comfortable with the closing process," explained Ferri (www.title-junction.com).

Title Junction has been serving the state of Florida and the Fort Myers and Cape Coral escrow and title insurance markets for over five years. The company handles residential and commercial real estate closing transactions, refinancing, short sales, and foreclosures. Notary public duties, acting as a courtesy witness during closings and handling escrow funds are additional services provided by Title Junction.

About Title Junction:

Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral, and the entire state of Florida. The company handles a number of real estate title services for both commercial and residential properties. Employees of Title Junction can also act as a witness in courtesy closings, an escrow agent or a notary public. The company was founded in 2005.

Media Contact:

Jennifer Ferri

jferri@title-junction.com

6313 Corporate Court, Suite 120-C

Fort Myers, FL 33919

239.415.6574
http://www.title-junction.com/

 

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American Land Title Association Supports Federal Regulators’ Extension of Comment Period for Qualified Residential Mortgage | Business Wire

June 06, 2011 06:28 PM Eastern Daylight Time 

WASHINGTON--(BUSINESS WIRE)--The American Land Title Association (ALTA), the national trade association of the land title insurance industry, announced its support of federal regulators’ decision to extend the comment period for the Risk Retention and Qualified Residential Mortgage (QRM) provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The deadline to submit public comments on the QRM was to expire June 10.

“ALTA strongly encourages regulators to protect consumers and investors by drafting a QRM that does not unnecessarily restrict credit and transfers legal title risks to state regulated insurance companies”

“ALTA strongly encourages regulators to protect consumers and investors by drafting a QRM that does not unnecessarily restrict credit and transfers legal title risks to state regulated insurance companies,” said Kurt Pfotenhauer, Chief Executive Officer of ALTA. “Investors and consumers deserve a gold standard that includes protection of their legal right to the property. Due to the complexity of the proposed rule and its interconnections with other rules still being developed by regulators, this extension is appropriate. Once we have the opportunity to understand how this rule will work in the new scheme required under last year’s financial overhaul, we will better be able to provide regulators with the necessary commentary to avoid any unintended consequences which could ultimately harm consumers and investors.”

A portion of the Dodd–Frank Act sets out a new requirement that forces lenders to retain 5 percent risk for any loans they sell on the secondary market. Exempted from the act’s risk-retention requirements, however, are mortgage-backed securities composed entirely of certain high-quality, lower-risk QRMs. Proposed rules would require future homebuyers to put down at least 20 percent of the purchase price of a home and meet strict income requirements to qualify for the loan with the lowest interest rates.

ALTA joined 11 other trade associations warning federal regulators in a whitepaper that the proposed QRM definition will harm many creditworthy borrowers while hampering the housing recovery. Congress rejected establishing high minimum down payments because they are not a significant factor in reducing defaults compared to other underwriting and product features. The three sponsors of the QRM provision, Senators Landrieu, Hagan and Isakson, sent letter to the regulators saying they specifically rejected a minimum down payment standard for the QRM. The letter was signed by 160 members of Congress, including 40 Senators.

The justification of qualified residential mortgages is to generate a finance structure that encourages responsible lending and borrowing. However, ALTA believes that the proposed regulation misses the mark because it does not require lenders to undertake common-sense underwriting steps to identify and establish who possesses the legal right to the property.

“Underwriting the real property that will serve as collateral for the mortgage loan is a fundamental part of the underwriting process and can be achieved by utilizing a title search backed by a title insurance policy to investigate, identify, and analyze the state of title to the collateral, thus reducing risk of loss for investors,” Pfotenhauer said.

About ALTA

The American Land Title Association, founded in 1907, is a national trade association representing more than 3,800 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. With offices throughout the United States, ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

via businesswire.com

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Surety and Title Insurance Stocks In Spotlight (MTG, MBI, RDN, AGO) from BestofOTC.com

(EMAILWIRE.COM, June 10, 2011 ) NEW YORK, NY - MGIC Investment Corp. (NYSE: MTG) fell 3.45% to $5.60. The stock has a 52-week range of $5.41-$11.79.

The stock has average daily volume of 3.61 million shares. At Current market price, the market capitalization of the company stands at $1.13 billion.

MBIA Inc. (NYSE: MBI) added 1.78% to $8.02. The stock has a 52-week range of $5.24-$14.96.

MBIA Inc. together with its subsidiaries, operates the financial guarantee insurance business.

Radian Group Inc. (NYSE: RDN) lost 1.95% to $3.52. Radian Group Inc. is a credit enhancement company.

The stock has average daily volume of 3.83 million shares. At Current market price, the market capitalization of the company stands at $468.56 million.

Assured Guaranty Ltd. (NYSE: AGO) slid 0.87% to $14.86. Assured Guaranty Ltd. is a holding company that provides, through its operating subsidiaries, credit protection products to the public finance, infrastructure and structured finance markets in the United States, as well as internationally.

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