11th Circuit Affirms FTC's $13.5 Million Judgment Against Mortgage Relief Fraudster

On November 2, 2017, the U.S. Court of Appeals for the 11th Circuit affirmed a $13.5 million judgment that the FTC obtained against a group of individuals, law firms, and related entities that engaged in a massive nationwide foreclosure avoidance scam. According to the Eleventh Circuit, the defendants offered "mortgage assistance relief services to people in danger of losing their homes to foreclosure." In doing so, the defendants "promised homeowners that in exchange for an upfront fee, they would negotiate more affordable monthly payments, lower interest rates, and reduced principal balances on their behalf." After the consumers paid, the defendants stopped communicating with them, often failed to obtain the promised mortgage relief, and frequently put consumers in a worse position that when they started.

The FTC filed suit against the defendants in the U.S. District Court for the Middle District of Florida. After years of active litigation, in July 2016, the district court granted summary judgment in the FTC's favor. The judgment barred the defendants from offering similar services in the future and prohibited further violations of the Telephone Sales Rule and the Mortgage Assistance Relief Services Rule. It also held the defendants jointly and severally liable for a $13.5 million judgment. The defendants appealed to the Eleventh Circuit, arguing that the district court improperly considered certain evidence in deciding the summary judgment motion. On November 2, 2017, the Eleventh Circuit affirmed the judgment.

While most have focused on the CFPB's enforcement actions, the FTC remains a force to be reckoned with, especially when pursuing perpetrators of mortgage relief fraud. The FTC has a specific webpage relating to mortgage relief fraud with links to enable consumers or legitimate businesses to report possible fraud to the FTC or to state attorney generals.

- Constantinos G. Panagopoulos and Theodore R. Flo

CFPB Launches Beta Version of HMDA Platform

On November 3, 2017, the Consumer Financial Protection Bureau (CFPB) announced the launch of the internet-based platform that financial institutions will use to submit data under the Home Mortgage Disclosure Act (HMDA).

Each user will need to register online for login credentials and establish an account in order to access the platform. Financial institutions can use the beta period to test login credentials, upload sample HMDA files, perform validation on their HMDA data, receive edit reports, confirm their test data submission, and conclude the test HMDA filing process. There is no limit on the extent to which a financial institution may use the platform for testing purposes during the beta period.

All test accounts that are created during the beta period, and test data that is uploaded during the period, will be removed from the platform when the filing period for 2017 HMDA data opens in January 2018.

The CFPB encourages institutions to provide feedback on their experiences using the platform by sending comments to HMDAfeedback@cfpb.gov.

- Richard J. Andreano, Jr.


Indiana Issues New Bond for Money Transmitter License

On October 14, 2017, the Indiana Department of Financial Institutions issued a new bond form for their Money Transmitter License to correct the language, making it consistent with their existing statute. This new bond form must replace the bonds currently issued through NMLS Electronic Surety Bond (ESB) functionality.

The revised bond form must be issued for the Money Transmitter License no later than December 31, 2017. Not doing so may impact the license renewal for 2018.

Nevada Converting to Electronic Surety Bonds on NMLS

On December 1, 2017, the Nevada Division of Mortgage Lending will start using the new Electronic Surety Bond (ESB) through NMLS.

More information on ESB is available here.

Six State Agencies Using NMLS MSB Call Report

Starting in Q1 2018, the following state agencies will start using the NMLS MSB Call Report: ‚ÄčIndiana Department of Financial Institutions, Iowa Division of Banking, New York Department of Financial Institutions, Ohio Department of Commerce, West Virginia Department of Banking, and Wisconsin Department of Financial Institutions. The Q1 2018 submission of the NMLS MSB Call Report is due 45 days after the third quarter end, on May 15, 2018.

More information on the NMLS MSB Call Report can be found here.

- Wendy T. Novotne

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