The CFPB and its Changes Flashcards
Define CFPB
Consumer Finance Protection Bureau:
Established by congress as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to address failures of consumer protections.
What does the CFPB do?
1: Protects consumers by carrying out federal consumer financial laws
2: Supervises companies and restricts unfair, deceptive, or abusive acts or practices
3. Takes consumer complaints
4: Promotes Financial Education
5: Monitors financial markets for new risks to consumers.
What are the changes implemented by CFPB?
RESPA
TILA
HOEPA
Mortgage Servicing Rules
What is the purpose of Mortgage Servicing Rules?
1: Strengthen protections for struggling buyers by restricting dual tracking, requiring early notification of foreclosure alternatives, mandating a single app for foreclosure alternative options, as well as a prompt and fair review process.
2: Protect consumers by requiring lenders to make a good-faith determination that the consumers can actually afford the mortgage, requiring servicers to be more transparent with fees/payments, and ensuring that consumers see appraisal information.
3: Make it easier for borrowers to understand the terms of their loans, require mandatory homeownership counseling providers, and expand mortgage protections.
4: Expand the types of mortgage loans subject to HOEPA protections and impose additional restrictions on mortgages covered by HOEPA.
What did the update Mortgage Servicing Rule do?
1: Requires servicers to provide certain borrowers with foreclosure protections more than once over the life of a loan, provided borrowers become current on payments at any time between completed prior and subsequent loss mitigation apps.
2: Improves policies and procedures on early intervention for struggling borrowers and clarifies loss mitigation requirements.
3: Clarifies borrower protections when the servicing of a loan is transferred and provides important loan info to borrowers in bankruptcy.
4: Ensures surviving family members and others who inherit or receive property generally have the same mortgage servicing protections as the OG borrower.
What is the Hardest Hit Fund?
Established by the US dept of treasury in February of 2010. It provides $7.6B to D.C. and 18 states hardest hit by the foreclosure crisis to develop locally tailored programs to assist struggling homeowners in their communities.
What is the purpose of the Hardest Hit Fund?
Designed and administered by each state’s Housing Finance Agency. Most aimed at helping unemployed homeowners remain in their homes while they search for new employment and those who owe more on their mortgages than their homes are worth.
What are the Joint State-Federal National Mortgage Settlements?
Reached between Attorneys General of 49 states and 5 servicers - Ally (formerly GMAC), Bank of America, Citi, JP Morgan Chase, and Wells Fargo - that were involved in deceptive lending and foreclosure practices, like robo-signing and were not verifying app. information.
What happened because of the Joint State-Federal National Mortgage Settlements?
1: Required servicers to appoint a single point of contact for loss mitigation efforts, have adequate trained staff, honor modification agreements made by a prior servicer, maintain better communication with borrowers, comply with service members Civil Relief Act, improve standards for executing foreclosure docs, remove improper fees, and end dual tracking.
2: Provided $50B in direct payments to signing states and the federal government as well as relief to distressed borrowers, though claims dedlines have since passed.
3: Resulted in loan modification for struggling homeowners, refinancing for underwater homeowners, and payouts for homeowners who lost their homes.
What is the Making Home Affordable Program?
Standardized process for requesting mortgage workouts from servicers, especially documentation requirements. Programs included loan modifications, loan refinancing, mortgage assistance for the unemployed, and the financial assistance to transition out of the home when necessary.
When and by who was the Making Home Affordable Program created?
Created in 2009 by the US Dept of the Treasury and the Dept of HUD to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy.
What is the Massachusetts Attorney General’s Home Corps Program?
The Homecorps program was created to mitigate future impacts of foreclosure crisis by providing advocacy to borrowers facing foreclosure.
What has the Mass. Attorney General’s HomeCorps Program done?
1: Established hotline staffed by loan experts to assist those facing foreclosure.
2: Launched a series of housing grants to support housing recovery efforts.
What is the Borrower Representation Initiative?
Provides legal representation to homeowners facing foreclosure or eviction.
What is the Loan Modification Initiative?
Staffed by a statewide team of skilled specialists, offers direct loan modification advocacy to distressed Mass. borrowers, in order to help many res. avoid unnecessary foreclosure.
