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This is the fourth part of a five part series that explores issues related to discount points. The previous article considered how unearned discount points could result in fair lending violations. This part provides a glimpse of how changes to Regulation Z will change how discount points are handled in the future. On August 17, 2012, the Consumer Financial Protection Bureau (CFPB) proposed two revisions to Regulation Z to implement provisions of the Dodd-Frank Act […]

This is the third part of a five part series that explores issues related to discount points. The previous article explored UDAAP concerns resulting from unearned discount points. This article considers how unearned discount points may result in fair lending violations. Almost any lending practice may result in an disparate impact violation under the Equal Credit Opportunity Act (ECOA), as implemented by Regulation B, and the Fair Housing Act (FHA). Charging unearned discount points is […]

This is the second part of a five-part series that explores issues related to discount points. The previous article provided a primer on discount points. This article explores UDAAP concerns that result from unearned discount points. Unearned discount points may result in charges of unfair, deceptive or abusive acts or practices (UDAAP). An act or practice is deceptive when: The representation, omission, or practice misleads or is likely to mislead the consumer; The consumer’s interpretation […]

Discount points have been in the news recently. A recent article from the Federal Reserve citied possible UDAAP and Fair Lending violations resulting from unearned discount points. Revisions to Regulation Z, emanating from the Dodd-Frank Act, change the whole game with points. So why the current emphasis on the age-old practice of charging points? Discount Points Primer – Many lenders offer borrowers the option of obtaining a lower interest rate on a mortgage loan by paying […]

Generally, a consumer has three business days after consummation to rescind a transaction, but if the creditor fails to provide a proper notice of the right to cancel or proper material disclosures, the period is extended to three years. Recent decisions issued by the Fourth and Tenth Circuits reached different conclusions on whether a lawsuit is necessary to the timely exercise of the right of rescission. Gilbert v. Residential Funding LLC, 678 F.3d 271 (4th […]