CFPB Requests Rehearing of Decision Threatening Agency’s Structure

Earlier today, the CFPB filed its much-anticipated response in PHH Corp. v. CFPB, requesting reconsideration by the full D.C. Circuit. As discussed in our special alert, on October 11, 2016, a three-judge panel of the D.C. Circuit vacated the CFPB’s $109 million penalty against PHH under the Real Estate Settlement Procedures Act (RESPA). In addition, a majority of the panel held that, to resolve a constitutional defect in the CFPB’s structure, the Director was removable by the President at will, meaning that President Trump could remove Director Cordray upon taking office. However, the panel’s decision is stayed until seven days after the court rules on the CFPB’s request.

Rather than proceeding directly to the Supreme Court, the CFPB proceeded as expected by requesting rehearing en banc by the full D.C. Circuit, which is generally disfavored and granted only for matters of “exceptional importance.” Perhaps most significantly, the Bureau’s petition does not request rehearing of the panel’s conclusion that RESPA’s three-year statute of limitations applied to administrative as well as judicial actions brought under that statute.  Read more…

LinkedInFacebookTwitterGoogle+Share

Release Updated FHA Guidance on State and Local Land Use Laws

On November 10, DOJ and HUD issued a Joint Statement updating guidance on the application of the FHA to state and local land use and zoning laws. The guidance—which is provided in the form of frequently asked questions and answers thereto—is designed to help state and local governments better understand how to comply with the FHA when making zoning and land use decisions as well as to help members of the public understand their rights under the FHA. The first section of the Joint Statement, questions 1–6, describes generally the FHA’s requirements as they pertain to land use and zoning. The second and third sections, questions 7–25, discuss more specifically how the FHA applies to land use and zoning laws affecting housing for persons with disabilities, including guidance on regulating group homes and the requirement to provide reasonable accommodations. The fourth section, questions 26–27, addresses HUD’s and DOJ’s enforcement of the FHA in the land use and zoning context.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: , ,
POSTED IN: Consumer Finance, Federal Issues

Supreme Court Hears Oral Arguments on Whether City Has Standing to Bring Mortgage Suits

On November 8, the Supreme Court heard oral arguments in Bank of America Corp. v. City of Miami, addressing whether the Fair Housing Act permits Miami to sue mortgage lenders as an “aggrieved person” for alleged racial discrimination in the sale, rental, and financing of housing. The questions presented to the Court for decision are whether (i) the language in the Fair Housing Act that limits standing to sue to “aggrieved person[s]” means that Congress meant to impose a more narrow standing requirement than that in Article III of the Constitution; and (ii) the proximate cause standard in the Fair Housing Act requires that the plaintiffs show more than the possibility that the defendants could have foreseen the harm that occurred through a chain of consequences.

LinkedInFacebookTwitterGoogle+Share

FHA MMI Fund Shows Gains in Fiscal 2016

On November 15, HUD released its 2016 Annual Report to Congress Regarding the Financial Status of the Mutual Mortgage Insurance (MMI) Fund (the MMI Report). The MMI Report reflected the Fund’s improved financial condition for the fourth year in a row amid rising home prices, fewer defaults and a surge of new borrowers. The capital cushion of the Fund grew to 2.32 percent in fiscal 2016, up from 2.07 percent. It was only the second year since 2008 that the capital ratio, a proxy for the fund’s health, exceeded the 2 percent minimum required by law. The net worth of the Fund, which stands behind $1 trillion in U.S. home loans and serves as a sort of savings account to pay lender claims if borrowers default, grew by $3.8 billion to $27.6 billion.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: ,
POSTED IN: Insurance, Miscellany, Mortgages

FHA Eases Owner-Occupancy Requirement on Condominium Financing

On October 26, the FHA released Mortgagee Letter 2016-15 announcing its decision to lower the owner-occupancy requirement on condominiums to as low as 35 percent. The letter follows a September announcement in which the FHA stated that, pursuant to the Housing Opportunity through Modernization Act of 2016, or H.R. 3700, it was required to “issue guidance regarding the percentage of units within an approved condominium development that must be owner occupied.” The guidance outlined in Mortgagee Letter 2016-15 is “effective immediately for all condominium project approval applications, recertification applications, annexation applications or reconsideration applications submitted for review.”

LinkedInFacebookTwitterGoogle+Share