New Financial Regulatory Reform Proposal

The Obama Administration issued a Financial Regulatory Reform Proposal as of June 17, 2009.

The Mortgage Bankers Association writes:

 “This proposal’s objectives are (1) promoting robust supervision and regulation of financial firms; (2) establishing comprehensive supervision of financial markets; (3) protecting consumers and investors from financial abuse; (4) providing the government with the tools it needs to manage financial crisis; (5) Raising international regulatory standards and improve international cooperation.

Key Points of Particular Interest  – The Plan

Creates a broadly empowered new Consumer Financial Protection Agency (CFPA) with authority to regulate mortgage products, assuming from other regulators responsibilities under RESPA, TILA, HOEPA, ECOA, CRA, HMDA, and FDCPA;

Establishes the CFPA’s rules as a “floor” not a “ceiling” for additional state laws and allows states to enforce rules against federally chartered banks and other originators;

Provides authority to CFPA to require originators or securitizers to retain an interest in the credit risk of loans transferred in securities to private investors;

Authorizes new requirements for originator compensation that would disburse commissions over time based on loan performance;

Also, authorizes establishment of appropriate duties of care applying to financial intermediaries serving consumers, including a new “duty of best execution” for mortgage brokers; and

Indicates that administration will be working on its proposal for the future of the GSEs and reporting on that topic to Congress by early next year. “

This proposal has to go through many steps before it is officially put into place and there may be changes along the way.  If you have any questions regarding this proposal.

Posted by Karen Gagliardi with Berlin Law Firm P.A., Marketing Development Coordinator.

Did you find this real estate law content useful, but need actual legal council?

Speak to a real estate attorney!

, ,

Fraud Investigation – A Top Priority for Freddie Mac

In previous blogs, we have discussed our concerns about short sale fraud and the warning signals to watch for.  According to Freddie Mac’s Mortgage Fraud Officer, Short sale fraud has also become the top priority for Freddie Mac’s fraud investigation unit as well. Per the attached article, recent trends that Freddie has been alerting Real…

A New Buyer Can Be Substituted for One Who Walked

We have learned of a very interesting development with respect to Bank of America. Bank of America has advised that it will permit a new buyer to step into the shoes of a buyer who has walked away from a transaction.  Furthermore, Bank of America has advised that the process will not have to begin…

Freddie Mac Does Not Allow HAFA Post Contract

Freddie Mac and Fannie Mae recently announced a program similar to the government supported “Home Affordable Foreclosure Alternative” program. Although the programs are similar, you should be aware of some of the differences between each program. Most importantly, a Seller may not be eligible for HAFA if they have a Freddie Mac backed loan and…

Are Proposed New HAFA Rules in Violation of Fair Housing Act?

There have been discussions regarding the government’s new HAFA program and HUD’s Fair Housing Act.  One view is that the HAFA program breaches the Fair Housing Act because it is discriminatory against people who would like to sell their home as a short sale, but cannot demonstrate a hardship. The most recent article I’ve read…

18 Month Moretorium on Home Valuation Code of Conduct

Fannie Mae and Freddie Mac implemented a new appraisal rule starting May first, written by the office of New York Attorney General Andrew Cuomo last year; however, critics of the new rule applied pressure before the July 4 congressional recess with the introduction of bipartisan legislation that would mandate an 18-month moratorium on the “Home…

Fighting Foreclosure

There are differing opinions concerning homeowners who contest foreclosure proceedings in an effort to continue to stay in their homes without making mortgage payments. A recent article in the Sarasota Herald Tribune offers one perspective. The article titled “Fighting a foreclosure may beat the alternative” written by Tom Lyons reads “Staying, it appears, can be…

FHA Changes Condo Rules

There have been many changes recently regarding the financing of condominiums.  FHA recently announced its newest guidelines for financing condominiums. Realty Times provided the following summary of these rules. Kenneth R Harney wrote, “On one hand, the rules allow lenders a lot more flexibility in reviewing condo project eligibility and documentation.” He goes on to…
Menu