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Financial Services Law Insights and Observations

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  • Illinois Governor Enacts Amendments to Predatory Lending Database Article

    State Issues

    On September 15, Illinois Governor Bruce Rauner signed into law amendments to the state’s Residential Real Property Disclosure Act to change provisions under its Predatory Lending Database Article. Public Act 100-0509 sets forth the following changes, among others: (i) certificates of compliance or certificates of exemption must now contain at least “one of the borrower’s names on the mortgage loan and the property index number for the subject property”; (ii) amends the definitions of “counseling” by removing the reference to “telephone counseling” and “originator” to reference “mortgage loan originator”; (iii) eliminates the requirement that originators shall provide information regarding affiliated or third party service providers or monies received from a broker or originator for inclusion in the predatory lending database; and (iv) provides additions to the information that must be collected and submitted by the title insurance company or closing agent for inclusion in the predatory lending database, such as a detailed list of all notices provided to the borrower at closing, including information in connection with the Integrated Closing Disclosure and the Integrated Loan Estimate Disclosure required under TILA-RESPA. The amendments took effect September 15, 2017.

    State Issues State Legislation Predatory Lending Mortgages TRID TILA RESPA GFE Mortgage Origination

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  • Federal Appeals Court Holds Good Faith Estimate Not a Contract

    Lending

    On May 31, the U.S. Court of Appeals for the Eleventh Circuit held that a Good Faith Estimate is not a contract but rather an estimate, and thus cannot support an action for breach of contract. Hackett v. Columbia Equities, Ltd., No. 1:10-cv-03530-AT, 2012 U.S.App. LEXIS 10949 (11th Cir. May 31, 2012). The court of appeals also dismissed a claim for “material alteration of a note” because the plaintiff failed to provide any statutory or common law rule that imposes civil liability on a party that materially alters a note. The pro se plaintiff asserted a variety of state and federal claims against three financial institutions related to a mortgage contract, all of which were dismissed by the district court for improper service, being time barred, or failing to state a claim upon which relief could be granted. The court of appeals affirmed the dismissal of all counts.

    Mortgage Origination GFE

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