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CFPB: new rules proposed for mortgage servicers

As a part of our nation’s cleaning up their mortgage act, the CFPB is looking to require better communication from servicers and will streamline the mortgage disclosure form with the goal of helping homeowners better understand their loans.

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Improving how mortgages work

The year old Consumer Financial Protection Bureau (CFPB) seeks to give homeowners better information on outstanding balances and pending interest rate changes by proposing new rules and finalizing their new streamlined mortgage disclosure form which it began to overhaul by reaching out to the graphic design community in early 2011.

New rules proposed include requiring servicers to respond to homeowners’ calls for information or complaints of errors within five days, a simple rule that both sides of the aisle agree to. CFPB Director, Richard Cordray said the rules are simply to eliminate surprises for homeowners, saying that “We want to make sure that at all times consumers can get information about how much they owe, what they are paying, and how their payments are being applied. And if consumers fall behind on their mortgage, we want them to know how to assess their options and take action.”

Other rules include requiring servicers to send regular bills to homeowners each billing cycle that clearly outline payments by principal, interest, fees, and escrow, alongside the amount of the next payment due, the due date, and warnings about any potential fees the homeowner might incur. Servicers would be required to warn homeowners that their interest rate on any adjustable rate mortgage will be changing, as early as seven months prior to any changes made.

Other proposed changes

One major change proposed is servicers’ being required to credit homeowners’ mortgage accounts on the day they receive payment, and they cannot charge borrowers for force-placed insurance unless homeowners have been warned first and a “reasonable basis” is outlined for why the policies are being dropped. If a homeowner gives the servicer proof of insurance, the servicer has to end the force-placed insurance policy within 15 days and refund any premiums.

Earlier this year, a $25 billion settlement was reached with the largest mortgage servicers as state and federal investigations found widespread fraud. Terms of this settlement overlap slightly with the CFPB’s proposal, but for the first time will require servicers to actually communicate with borrowers.

The public can comment on the proposed rules until October 9th, and for the proposed mortgage disclosure form, Americans have until November 6th to comment. The CFPB seeks to shore up and put the new rules into effect by next January.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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4 Comments

4 Comments

  1. RegulationRoom

    August 16, 2012 at 10:40 pm

    The Cornell e-Rulemaking Initiative (CeRI) has partnered with the Consumer Financial Protection Bureau (CFPB) to facilitate public participation on the CFPB’s newly-proposed residential mortgage rules.  CeRI’s participation website provides a forum for understanding exactly what CFPB is proposing and makes it easier for a broad audience of individual consumers and members of the industry to provide input into CFPB’s proposed mortgage rules.   
     
    Industry commenters can participate individually (commenters’ identities are kept anonymous) as well as on behalf of the industry to weigh in with information about how their particular operations would be affected by these new rules.   
     
    Join the discussion at https://regulationroom.org.
     

  2. RegulationRoom

    August 16, 2012 at 10:40 pm

    The Cornell e-Rulemaking Initiative (CeRI) has partnered with the Consumer Financial Protection Bureau (CFPB) to facilitate public participation on the CFPB’s newly-proposed residential mortgage rules.  CeRI’s participation website provides a forum for understanding exactly what CFPB is proposing and makes it easier for a broad audience of individual consumers and members of the industry to provide input into CFPB’s proposed mortgage rules.   
     
    Industry commenters can participate individually (commenters’ identities are kept anonymous) as well as on behalf of the industry to weigh in with information about how their particular operations would be affected by these new rules.   
     
    Join the discussion at https://regulationroom.org.
     

  3. RegulationRoom

    August 16, 2012 at 10:43 pm

    The Cornell e-Rulemaking Initiative (CeRI) has partnered with the Consumer Financial Protection Bureau (CFPB) to facilitate public participation on the CFPB’s newly-proposed residential mortgage rules.  CeRI’s participation website provides a forum for understanding exactly what CFPB is proposing and makes it easier for a broad audience of individual consumers and members of the industry to provide input into CFPB’s proposed mortgage rules.   
     
    If you have any suggestions or comments related to these rules, join the discussion at https://regulationroom.org.  Industry commenters can participate individually (commenters’ identities are kept anonymous) as well as on behalf of the industry to weigh in with information about how their particular operations would be affected by these new rules.   
     
     

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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