The Department of Justice’s Civil Rights Division, with it’s beefed up staff and budget, is actively pursuing fair lending issues. Several recent cases are blurring the lines between the Community Reinvestment Act (CRA) and the Fair Housing and Equal Credit Opportunity Acts. The purpose of CRA is to encourage banks to meet the credit needs of their local communities. The level of encouragement has increased significantly over the years. The Department of Justice (DOJ) has […]
Tag: Lending Compliance
FAMILIAL STATUS DISCRIMINATION
Between the Equal Credit Opportunity Act and the Fair Housing Act (FHA) lenders must avoid discrimination based on 11 different bases. Usually when we hear of a case of discrimination it involves race, ethnicity or sex. But recently HUD announced a settlement of a discrimination case with a mortgage lender that had engaged in familial status discrimination under the FHA by engaging in discriminatory lending practices against expectant mothers. The FHA protects an applicant from […]
REGULATION Z – LOAN ORIGINATOR COMPENSATION RULES
Everyone seems aware that Regulation Z rules, which were effective on April 1, 2011, state that no loan originator shall receive and no person shall pay to a loan originator, directly or indirectly, compensation in an amount that is based on any of the transaction’s terms or conditions. Everyone also seems aware that the term “compensation” includes salaries, commissions, and any financial or similar incentive provided to a loan originator that is based on any […]
ALTERNATE MORTGAGE TRANSACTION PARITY ACT AND NEW REGULATION D
On July 22, 2011 the CFPB published an interim final rule establishing Regulation D (§1004 of the Bureau of Consumer Financial Protection regulations) pursuant to the Alternative Mortgage Transaction Parity Act (AMTPA). The interim final rule is necessary to avoid a regulatory gap created by the amendments to AMTPA in the Dodd-Frank Act. Without an interim final rule that takes immediate effect, state housing creditors would no longer be able to make variable rate mortgage […]
HUD ISSUES ITS FINAL RESPA RULE
On July 11, just ten days before its rule-writing authority transfers to the new Consumer Financial Protection Bureau, HUD published revisions to Regulation X. The revisions generally address issues already covered in the Frequently Asked Questions and the RESPA Roundup. HUD did not touch any of the really screwed up issues that continue to plague lenders around the nation. The major revisions are summarized: The lender is not permitted to charge, as a condition for […]