Mortgages
Practice Overview
As the mortgage industry continues to evolve, mortgage-related government scrutiny continues. Buckley is a leading provider of legal services to the mortgage industry, representing the top mortgage originators and servicers in the United States. Our clients include the nation’s largest financial institutions, regional banks and lenders, start-up firms, mortgage insurers, title insurers, securities broker-dealers, private equity investors, specialty servicers, warehouse lenders, e-commerce and technology vendors, home builders, and mortgage industry trade associations.
Our comprehensive experience is based on decades of experience as trusted counselors across regulation, enforcement, litigation, transactions, and licensing, and our team approach informs our advice across the entire spectrum of work that we do. Our firm defends mortgage lenders and servicers in every stage of government investigation and enforcement, as well as federal and state court proceedings. We provide regulatory counseling on compliance matters for all aspects of the origination and servicing process, including fair and responsible lending and servicing, the complex set of federal and state disclosure and timing requirements, government insured and guaranteed lending, mortgage fraud and anti-money laundering (AML), preemption, privacy and information security, and electronic delivery of commercial and residential loans. We assist nonbank clients in analyzing state license requirements to engage in the various aspects of the mortgage business, as well as to obtain such licenses or approvals for changes of control. We work with our clients to develop new products as well as design and implement new policies, procedures, and disclosures that ensure compliance with recently enacted federal and state laws and regulations. We also advise on the purchase and sale of mortgage companies, servicers, settlement service providers, as well as mortgage loans and mortgage servicing rights, and assist in negotiating servicing sub-servicing, credit facility, joint venture, private-label outsourcing, technology, and other critical vendor agreements.
Significant work includes:
- Assisted a wide range of bank and nonbank lenders and servicers in adapting systems and procedures to implement the sweeping mortgage regulations adopted under the Dodd-Frank Act, including the Ability-to-Repay/Qualified Mortgage Rule, Loan Originator Compensation Rule, Mortgage Servicing Rules, Truth in Lending Act-Real Estate Settlement Procedures Act (TILA-RESPA) Integrated Disclosure Rule (TRID), and Home Mortgage Disclosure Act (HMDA)
- Represented numerous mortgage servicers in CFPB investigations regarding alleged violations of RESPA, the Mortgage Servicing Rules (MSR) and the prohibition on unfair, deceptive, or abusive acts or practices (UDAAP)
- Conducted due diligence and transactional work in connection with numerous mortgage lender and servicer acquisitions
- Conducted substantial reviews of disclosure and loan documents for mortgage lenders transitioning to new document vendors
- Represented mortgage servicer in complex investigation involving the interplay of the Bankruptcy Code and RESPA’s escrow rule
- Representation of numerous correspondent lenders in actions for breach of contract and indemnification brought by the ResCap Liquidating Trust as successor to Residential Funding Company (RFC) arising from the sale and subsequent securitization of residential mortgage loans
- Represented a U.S. financial services company in its exit from mortgage business
- Represented a U.S. financial services company in sale of mortgage servicing rights and a default servicing platform to Green Tree, which included a subservicing arrangement between the two entities
- Represented a federally chartered bank in the sale of mortgage servicing rights to Two Harbors
- Represented a private equity firm in an equity investment in a reverse mortgage lender
- Represented a mortgage company in $100M stock sale to private equity firm
- Represented a Wall Street bank in a mortgage loan private-label outsourcing arrangement, including related servicing and loan sale agreements
- Represented a client in the acquisition of two mortgage-related fintech companies
- Representing clients in connection with various portfolio retention structures
- Represented clients in establishing Affiliated Business Arrangements/joint ventures
Mortgage Origination
Buckley is a leading provider of legal services to the mortgage lending industry and advises on all aspects of the origination process. We assist clients with product development, advertising and marketing, disclosures, loan originator compensation, underwriting/ability-to-repay, fair lending, applying Real Estate Settlement Procedures Act (RESPA) and other anti-kickback requirements to business development efforts, appraisal management, vendor relations, and electronic disclosure and signature. Our clients include mortgage lenders, brokers and insurers, as well as securities broker-dealers, consumer finance companies, home builders, document preparation firms, real estate brokers, lead generators, and mortgage industry trade associations. Our attorneys are recognized authorities on the laws affecting this industry, including the Equal Credit Opportunity Act (ECOA), Fair Housing Act (FHA), Truth-in-Lending Act (TILA), RESPA, Home Ownership and Equity Protection Act (HOEPA), Home Mortgage Disclosure Act (HMDA), Homeowners Protection Act, the Fair Credit Reporting Act (FCRA), and the myriad state laws applicable to mortgage origination.
Mortgage Servicing
Our attorneys advise on mortgage servicing-related examination, enforcement, regulatory counseling, litigation, and transactional matters. We advise on all issues pertaining to loss mitigation foreclosure alternatives, collection activities, using affiliated providers for default or other services, payment application, managing escrows, portfolio retention, state licensing, and federal preemption for bank servicing loans given the impact of Dodd-Frank. We are involved in regulatory and private litigation actions pertaining to lender-placed insurance, fair and responsible servicing; loss mitigation and loan modifications; foreclosure and bankruptcy; affiliated and unaffiliated vendor management matters; and False Claims Act (FCA)-related issues. We guide clients through Consumer Financial Protection Bureau (CFPB) examinations and investigations, state regulator examinations and enforcement (including joint actions through the Multi-state Mortgage Committee (MMC)), Servicemember's Civil Relief Act (SCRA) investigations and enforcement actions, state attorney general investigations, and Federal Trade Commission (FTC) investigations. We negotiate mortgage servicing right purchase and sale agreements, sub-servicing agreements, and various types of vendor agreements. We also assist with remedial efforts to enhance servicing compliance policies, procedures, practices, and internal controls, including the preparation of comprehensive legal requirement inventories, risk assessments, policies, and procedures.
Counseling & Compliance
Our lawyers provide local, state, and federal compliance and risk management advice. We develop compliance management programs, including written policies, training, and ongoing monitoring to address compliance with evolving lending laws and regulations. We advise on the complex rules governing Federal Housing Administration lending and servicing. We have played an active role in federal compliance initiatives involving government agencies, including the various investigations and actions relating to the foreclosure crisis such as the interagency horizontal review of the mortgage servicing industry and related Independent Foreclosure Review process. We also regularly conduct 50-state surveys of laws governing the mortgage industry.
Enforcement
Our firm advises on mortgage-related enforcement matters initiated by the Consumer Financial Protection Bureau (CFPB), Department of Justice (DOJ), Federal Trade Commission (FTC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), Federal Housing Administration, state regulators (both individually and through the MMC) and state attorneys general. We resolve complex parallel proceedings involving concurrent government enforcement and civil litigation, congressional investigations, and class actions. We assist our clients in responding to bank regulatory examinations, as well as Federal Housing Administration, Veterans Affairs (VA), and Ginnie Mae audits and inspector general reviews.
Litigation
Our litigators defend mortgage-related class action and complex civil claims, ranging from multi-district class and mass actions and other complex civil litigation to arbitration and alternative dispute resolution (ADR) proceedings. Our experience involves allegations of fair and responsible lending, unfair competition and deceptive trade acts and practices, fraud, false statements, false claims, breach of contract, loan repurchase claims, and breach of fiduciary duties, as well as alleged violations of regulations and laws governing the mortgage industry. We offer our mortgage industry clients a strong appellate practice, and serve as amicus curiae counsel on cases that impact this industry.
Mortgage Transactions
Buckley is involved in the full range of transactions relevant to mortgage companies, servicers, settlement service providers, vendors, and investors. We negotiate the most favorable business terms possible for our clients by leveraging our knowledge of the mortgage industry and its business risks, our experience handling litigation and enforcement matters, and our deep understanding of the relevant laws, regulations, and the expectations of regulators, the government-sponsored enterprises (GSE), and Ginnie Mae. Our lawyers are experienced in regulatory and corporate due diligence of both acquisition or investment targets as well as service providers. We negotiate mergers and acquisitions of mortgage lenders, servicers, brokers, settlement service providers, and other service providers; asset purchase and sale transactions, including loans and servicing rights; and distressed asset purchases and sales agreements. We negotiate and document correspondent, wholesale lending, broker, servicing and subservicing, pooling and servicing, warehouse lending and other credit facility, outsourcing, co-branding, portfolio retention, and marketing and affinity marketing agreements. We are also involved in vendor transactions that include, loan origination, servicing, collections, settlement services, vendor arrangements, the provision of electronic/digital mortgage-related services, and joint ventures under Real Estate Settlement Procedures Act's (RESPA) affiliated business arrangement rules.
Licensing
Our firm offers law-related licensing services to mortgage lenders, loan investors, and mortgage servicing rights-owners, brokers, and servicers, as well as debt collectors, consumer finance companies, and other non-depository financial institutions. We assist with every phase of the licensing process, from identifying potential target licenses to interacting with state regulatory agencies. We work with our clients to obtain licenses in all 50 states, the District of Columbia, and most U.S. territories. Our experience includes federal and state licensing; mortgage, Federal Housing Administration, and loan originator/loan officer licensing; the Nationwide Mortgage Licensing System (NMLS); and license changes of control, modifications, upgrades, downgrades, and surrenders. We navigate our clients through amendments to corporate structure and change of control, management and location, and Certificate of Authority and DBA filings. Our attorneys have extensive experience working with state and federal regulators and licensing authorities on licensing and compliance matters. Our integrated approach to licensing give us an advantage when drafting initial applications and follow-on requests that have the best chance of obtaining timely approval.
Loan Repurchase
Buckley delivers an in-depth understanding of mortgage lending operations, loan sale transactions, and market expectations in the representation of mortgage lenders in loan repurchase litigation brought by investors, trustees, and bond insurers alleging breaches of representations and warranties in loan purchase or credit enhancement agreements. We also assist clients in responding to repurchase demands made by private investors and government-sponsored enterprises (GSEs). As needed, our team can assist in the difficult, loan-by-loan analysis of the validity of repurchase requests.
Mortgage Insurance
Our attorneys routinely advise mortgage insurers on a broad range of compliance matters, including those involving the Real Estate Settlement Procedures Act (RESPA); federal, state, and international privacy laws; Equal Credit Opportunity Act (ECOA); Fair Housing Act; Fair Credit Reporting Act (FCRA); and Truth in Lending Act (TILA). We also counsel clients on issues pertaining to federal and state fair debt collection laws, state insurance statues, and other state and federal laws and regulations. We assist our clients in drafting and negotiating mortgage insurance contracts and ancillary agreements, contract underwriting, and other arrangements with various settlement service providers. We represent mortgage insurers before Congress, the Department of Housing and Urban Development (HUD), FTC, and federal banking and state regulatory agencies.
Mortgage Industry Public Policy
Buckley advises corporate clients and industry trade associations on pending federal and state legislative and regulatory developments affecting the mortgage industry. Our lawyers draft legislative and regulatory language, prepare comment letters, and advocate client positions before Congress, regulatory agencies, and state legislatures.
Articles
Special Alert: CFPB’s RESPA advisory addresses online mortgage-comparison platforms
The Consumer Financial Protection Bureau (CFPB) issued guidance yesterday making clear that those who operate or participate in online mortgage-comparison shopping platforms will be closely scrutinized for compliance with the prohibition on payments for referrals to mortgage lenders. “Companies...
Special AlertsSpecial Alert: Eleventh Circuit upholds terms of arbitration agreement in challenge under Dodd-Frank
On May 26, 2022, the United States Court of Appeals for the Eleventh Circuit issued a published decision holding that the Dodd-Frank Act does not prohibit the enforceability of delegation clauses contained in consumer arbitration agreements “in any way.” This opinion is of potentially broad...
Special Alerts"Mortgage regulation developments: Qualified mortgage updates and Covid-19 assistance" by Sasha Leonhardt (ABA)
Throughout the past year, the Consumer Financial Protection Bureau (“CFPB”) continued to actively issue rules and other guidance applicable to the mortgage industry. This survey highlights recent developments related to qualified mortgages (“QM”), specifically the publication of four final rules...
ArticlesSpecial Alert: CFPB specifies pandemic foreclosure protections and signals tight supervision and enforcement around servicer efforts
The Consumer Financial Protection Bureau’s Covid-relief mortgage servicing rule issued yesterday steered away from a nationwide foreclosure freeze as initially proposed, instead creating heightened protections for those borrowers who became seriously delinquent during the pandemic. The distinction...
Special Alerts"Opinion: How mortgage servicers can prepare for a crackdown from the CFPB” by Sasha Leonhardt, Jon David D. Langlois, and David McGee (National Mortgage News)
The Consumer Financial Protection Bureau is drawing a line in the sand for the mortgage servicing industry with new guidance and proposed revisions to its mortgage servicing rules. The CFPB expects that the impending expiration of federal foreclosure and forbearance protections for mortgagees will...
Articles"The pendulum always swings twice: Disparate impact under the Obama, Trump, and Biden administrations" by Jeffrey P. Naimon and Sasha Leonhardt (American Bar Association Consumer Financial Services Committee Newsletter)
For over forty years, courts took the lead on interpreting the Fair Housing Act’s (“FHA’s”) prohibition on discriminatory housing practices, including home mortgage lending. While different administrations have varied as to whether the Supreme Court’s disparate impact theory from the Griggs v. Duke...
ArticlesSpecial Alert: CFPB proposes to halt foreclosure starts from August 31 until 2022 and create new loss mitigation requirements for servicers
The Consumer Financial Protection Bureau on April 5 issued a proposal that would broadly halt foreclosure initiations on principal residences from August 31, 2021 until 2022, and change servicing rules to promote consumer awareness and processing of Covid-relief loss mitigation options. Although...
Special Alerts"CFPB order offers insight into pandemic mortgage servicing" by Jeffrey P. Naimon (Law360)
The U.S. Consumer Financial Protection Bureau in December issued a consent order based on alleged violations of its 2014 mortgage servicing regulations. The consent order, which also bootstraps claims of unfairness and deception to alleged technical violations of the servicing regulations —...
ArticlesSpecial Alert: CFPB redefines Qualified Mortgage; “GSE Patch” to expire
The Consumer Financial Protection Bureau last week released two final rules further defining what types of loans can be a “qualified mortgage loan” for purposes of the bureau’s Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule). The General QM Final Rule substantially revamps the general rules...
Special AlertsSpecial Alert: Federal and state authorities take significant actions to address mortgage servicing concerns
On December 7, the Consumer Financial Protection Bureau, Multi-State Mortgage Committee of state mortgage banking regulators, and every state attorney general took actions against a large nonbank mortgage company for alleged violations pertaining to both mortgage origination and servicing practices...
Special AlertsSpecial Alert: CFPB proposes new Qualified Mortgage definition for Seasoned QMs
On August 18, the CFPB released a Notice of Proposed Rulemaking (NPRM) to create a new category of Qualified Mortgages to be called “Seasoned QMs”. The CFPB concluded that if a loan has performed for a long enough period of time and meets certain underwriting conditions and product restrictions, it...
Special AlertsSpecial Alert: California Assembly to introduce legislation for Covid-19-related relief for mortgage loans, vehicle-secured credit, PACE financing, and deferred deposit transactions
We understand that the California State Assembly will shortly propose amendments to Assembly Bill No. 2501 to create the “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020.” Note: The proposed legislation was available on California’s legislative service website shortly after publication...
Special Alerts"Navigating digitized mortgage processes during Covid-19" by Edward W. Somers (Law360)
The risks presented by the coronavirus pandemic have forced innovation in executing consumer contracts — and fast. Not least affected is the mortgage industry, which typically relies on in-person interactions for document execution to satisfy legal requirements and investor guidelines. Office...
Articles"Will private flood insurance keep mortgages from going underwater?" by Melissa Klimkiewicz and Sara Ruvic (HousingWire)
Spoiler: We aren’t certain whether private flood insurance will help homes retain their value, but we do know that the new flood insurance rules are presenting surprising challenges for lenders. For years, homeowners in high flood-risk areas have relied on subsidized flood insurance that the...
ArticlesSpecial Alert: Fannie Mae and Freddie Mac ease RON requirements
On March 31, Fannie Mae and Freddie Mac issued bulletins updating and clarifying their respective requirements for remote online notarizations as they seek to reduce in-person notarizations during the Covid-19 pandemic. Remote online notarization allows a notary to use electronic tools — typically...
Special AlertsSpecial Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to...
Special AlertsSpecial Alert: California governor announces financial relief package during Covid-19 crisis
On March 25, California Governor Gavin Newsom announced a financial relief package (Proposal) and related guidance to assist borrowers in California experiencing financial hardship as a result of the Covid-19 outbreak. According to the news release, the relief efforts are being supported by several...
Special AlertsSpecial Alert: HUD, DOJ sign MOU on mortgage False Claims Act violations
On October 28, HUD and DOJ announced a long-awaited Memorandum of Understanding (MOU), which provides prudential guidance concerning the application of the False Claims Act to matters involving alleged noncompliance with FHA guidelines. The announcement was made by HUD Secretary Dr. Benjamin S...
Special Alerts"HUD’s disparate impact proposal clarifies fair lending laws" by Jeffrey P. Naimon (Law360)
The U.S. Department of Housing and Urban Development last month released its long-anticipated proposal to revise its disparate impact rule under the Fair Housing Act. Although the proposal has attracted some criticism from those who believe the proposal would make it more difficult for plaintiffs...
Articles
News & Blogs
Freddie allows digital paystubs in underwriting
On May 22, Freddie Mac announced new capabilities allowing lenders to use a borrower’s digital paystub data when assessing income paid through direct deposit. Lenders will be able to access the enhancements to Freddie’s automated income assessment tool through the Loan Product Advisor (LPA) asset...
InfoBytesFHA expedites claims process for HECMs
On May 17, HUD announced new policies to expedite claims processing for home equity conversion mortgages (HECM). Specifically, FHA’s policies will allow for faster payment of funds to mortgagees upon assignment of an HECM to HUD by allowing borrowers with FHA mortgages to submit a request for a...
InfoBytesFHFA requests feedback on single-family pricing framework
Recently, the FHFA issued a request for input (RFI) on a single-family pricing framework for Fannie Mae and Freddie Mac (GSEs), including feedback on policy priorities and goals that FHFA should pursue in its oversight of the framework. “Through this RFI, FHFA seeks input on how to ensure the...
InfoBytesChopra highlights APOR in call for resilient and durable rules
On May 17, CFPB Director Rohit Chopra announced that the agency is currently reviewing several of its rules and guidance documents in an effort to eliminate unnecessary complexities and create “more durable rules that don’t over-rely on single entities.” Chopra flagged issues related to the federal...
InfoBytesDistrict Court denies servicer’s claims that it never received QWR
The U.S. District Court for the Eastern District of Missouri recently considered whether a mortgage servicer received a borrower’s qualified written request (QWR) relating to a missed mortgage payment. The borrower sent a money order to cover two monthly mortgage payments, but the payments were not...
InfoBytesFHFA rescinds GSE fee based on DTI ratios
On May 10, FHFA announced it is rescinding a debt-to-income-based loan-level pricing adjustment announced in January. As previously covered by InfoBytes , FHFA made several changes relating to upfront fees for certain borrowers with debt-to-income (DTI) ratios above 40 percent. The updated and...
InfoBytes6th Circuit: Tennessee judicial foreclosure time-barred
On May 4, the U.S. Court of Appeals for the Sixth Circuit affirmed a lower court’s decision in a judicial foreclosure action, holding that a bank’s lawsuit was barred by Tennessee’s 10-year statute of limitations for actions to enforce liens on real property. The appellate court also refused to...
InfoBytesIndiana enacts Money Transmission Modernization Act
On May 4, the Indiana governor signed SB 452 to amend Indiana code governing financial institutions. Among other things, the Act amends a provision to require the Department of Financial Institutions to adopt emergency rules no later than June 30, 2024, to authorize certain licensees (or certain...
InfoBytesFHA implements provisions for transitioning LIBOR-based ARMs
On May 2, FHA published Mortgagee Letter (ML) 2023-09 to implement provisions of the Adjustable Rate Mortgages (ARM): Transitioning from LIBOR to Alternative Indices final rule that was published in the Federal Register at the beginning of March. (Covered by InfoBytes here .) The final rule...
InfoBytesFDIC releases March enforcement actions
On April 28, the FDIC released a list of administrative enforcement actions taken against banks and individuals in March. The FDIC made public 11 orders including “four prohibition orders, three orders terminating deposit insurance, two consent orders, one order to pay civil money penalty (CMP),...
InfoBytes
Press Releases & Announcements
Buckley Sandler launches APPROVED licensing service
WASHINGTON, D.C. (March 7, 2018) – Buckley Sandler LLP today formally announced the launch of APPROVED , a new approach to licensing for financial services companies. Buckley Sandler is building upon years of financial services experience and licensing know-how to offer APPROVED, a technology-...
Press ReleasesBuckley Sandler Issues Second Edition of CFPB Mortgage Origination Rules Deskbook
Buckley Sandler today announced the publication of the second edition of the CFPB Mortgage Origination Rules Deskbook. Produced in partnership with the American Bankers Association, the book is the definitive guide for bank and nonbank mortgage originators navigating the Consumer...
AnnouncementsBuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Files Amicus Curiae Brief on Behalf of Industry Group in RESPA Case; Marks First Appeal Against CFPB Director Decision
On October 5, 2015, Buckley Sandler attorneys filed an amicus curiae brief on behalf of the Consumer Mortgage Coalition (CMC) in the first case to come up on appeal to the District of Columbia Circuit since the CFPB was founded in 2011. In the CMC’s brief, Buckley Sandler attorneys argued that the...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press ReleasesBuckley Sandler & American Bankers Association Release CFPB Mortgage Origination Deskbook
WASHINGTON, D.C. (October 9, 2014) – Buckley Sandler LLP , a leading financial services and criminal and civil enforcement defense law firm, is pleased to announce the availability of “The New CFPB Mortgage Origination Rules Deskbook.” Published in partnership with the American Bankers Association...
Press Releases
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Recent Blog Posts
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May 25, 2023
Freddie allows digital paystubs in underwriting
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May 25, 2023
FHA expedites claims process for HECMs
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May 24, 2023
FHFA requests feedback on single-family pricing framework
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May 24, 2023
Chopra highlights APOR in call for resilient and durable rules
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May 12, 2023
District Court denies servicer’s claims that it never received QWR