Posts Authored by Nelson M. Reid

CFPB issues warning to mortgage servicers

On April 1, 2021, acting Director of the Consumer Financial Protection Bureau (CFPB), David Uejio, fired a shot across the bow of mortgage servicers in the form of a Compliance Bulletin and Policy Guidance (Bulletin). A copy of the Bulletin can be found here

As the mortgage industry is well aware, there are millions of borrowers currently in default of their mortgage obligations. This could lead to a flood of foreclosures when forbearance periods end later this year. 

In no uncertain terms, the Bulletin warns that the CFPB will be keeping an eye on how mortgage servicers respond to borrower requests for loss mitigation assistance and process loss mitigation applications. Among other things, the CFPB will consider a servicer’s overall effectiveness at reducing avoidable foreclosures (along with other relevant factors) in using its discretion to address violations of federal consumer financial law in supervisory and enforcement matters. Read more >>

Consumer Lending and Services, Legal Developments

Recent CFPB guidance provides flexibility for investigating consumer credit reporting disputes

On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) provided guidance on how it plans to handle consumer credit reporting oversight during COVID-19. As part of that guidance, the CFPB stated that it intends to provide flexibility for lenders and credit bureaus in regard to the time they take to investigate disputes. As long as lenders and credit bureaus make a good faith effort to investigate disputes as quickly as possible during the COVID-19 outbreak, the CFPB will not take supervisory or enforcement action against them. The CFPB’s guidance also expressly encouraged lenders to continue to voluntarily provide payment relief to consumers and to accurately report information regarding that relief to credit bureaus. 

Consumer Lending and Services, Legal Developments

Ohio's new requirements for junior lienholders and mortgage servicers

It has been a little over six months since Ohio Revised Code § 1349.72 went into effect—a law that requires holders of junior liens on residential real property to first send a written notice containing specific information prior to attempting to collect any part of a debt in default. Due to the vague terms contained in the law, however, there is quite a bit of uncertainty surrounding it. Unfortunately, none of that uncertainty has been resolved since its enactment, as the law does not appear to have been cited by a single Ohio court decision. 

Residential mortgage lending and servicing businesses should consider whether they have procedures in place that comply with this new law. If you have any questions, please contact the authors or a member of Bricker's banking& financial services team.

Consumer Lending and Services, Legal Developments

Supreme Court opens door (a bit) to argument that in rem foreclosures not covered by FDCPA

On March 20, 2019 in Obduskey v. McCarthy & Holthus LLP, a unanimous U.S. Supreme Court held that the primary definition of a “debt collector” under the Fair Debt Collection Practices Act (FDCPA) does not apply to an entity that engages in no more than security-interest enforcement. As a result, most of the debt-collector-related prohibitions of the FDCPA (besides the limited prohibitions of Section 1692f(6)) do not apply to such an entity.  

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Consumer Lending and Services, Legal Developments