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38 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION the latest Continued from Page 37 american land title association Warns new cFPB Forms could confuse consumers Inaccurate statements of title insurance fees are one problem ALTA found with the CFpB forms. t he new Consumer Finance Protection Bureau (CFPB) mortgage disclosure forms have major problems and could create confusion, the American Land Title Association (ALTA) said in a written statement released early last month in response to CFPB Director Richard Cordray's testimony to the House Financial Services Committee. "Unfortunately, we're already aware of one major problem with the new CFPB forms," ALTA's CEO, Michelle Korsmo, said in her written statement. "The Bureau's Closing Disclosure, which replaces the current HUD-1 Settlement Statement, inaccurately discloses the fees associated with title insurance premiums for consumers. State law and regulation in half of the United States dictates that consumers must pay title insurance rates that are different than how the CFPB requires industry to inaccurately disclose these fees to the consumer." In his testimony, Cordray stated the CFPB is "committed to an even-handed approach to rulemaking that maintains important protections for con- sumers while listening to all stakeholders and making changes where appropriate." Korsmo said the new forms CFPB introduced are misleading for consumers and could create confusion. "Every homebuyer should be well-informed about the accurate costs of homeownership—includ- ing what they pay for each ser- vice during the real estate closing process. For many consumers, buying a home is the single larg- est investment they will make in their lifetime," she said. "It's critical that Director Cordray and the CFPB staff adjust the disclosure forms prior to August 1 to ensure consumers receive accurate information about their mortgage costs. ALTA and our member companies stand ready to help the Bureau ensure con- sumers are neither confused nor misled at the closing table." ALTA asked the CFPB to an- nounce a "five-month restrained enforcement period" on the new forms to give businesses time to adjust to new regulations. "As with previous regulatory reform, only when the new forms are in practice will many issues and defects be discov- ered," Korsmo said. "A restrained enforcement period helps our members, and the broader real estate industry, make the changes needed to their business process- es and collaborate with industry and regulators to ensure the consumer has a positive experi- ence at the closing table." to self-report any violations. The bank's conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans. According to the report, one quality-control employee wrote in an email discussing MetLife Bank's practice of downgrading its quality control findings: "Why say significant when it feels so gvood to say MODERATE." "MetLife Bank took advantage of the FHA insurance program by knowingly turning a blind eye to mortgage loans that did not meet basic underwriting require- ments, and stuck the FHA and taxpayers with the bill when those mortgages defaulted," U.S. Attorney John Walsh of the District of Colorado said. "This settlement is part of our system- atic, national effort to hold lenders accountable for irresponsible lending practices that not only harmed FHA, but also contribut- ed to a catastrophic wave of home foreclosures across the country." The settlement was the result of a joint investigation conducted by HUD, the Civil Division, and the U.S. Attorney's Office for the District of Colorado. "MetLife Bank took advantage of the FhA insurance program by knowingly turning a blind eye to mortgage loans that did not meet basic underwriting requirements. John Walsh, U.S. Attorney, District of Colorado

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