T
he last two years haven’t been easy, especially for the people in business. More so, for the people in the real estate market, everything has been chaotic, and from the looks of things, it might stay that way for a while, not unless congress acts upon the requests by NAR and NAHB. Perhaps to bring you up to speed with the current developments in the real estate market, we all know that the rates are down and the forbearance period is or almost over. In addition, with the rates relatively down, demand has been sky-high and has been for the past 5 years, only heightening now because people are realizing that now more than ever, our homes have value, especially after the fact that most are taking their jobs from home. In any market, operating optimally, you would expect that demand will equal the supply, only that in our real estate market, demand is a triple threat. There are no new homes, and the current supply of existing homes isn’t enough to sustain the sky-high demand. Prices are rising every single day because of increased competition! In a nutshell, it is a frantic market! Ordinarily, operating in such an environment, some players will go off the book and break some rules, after all, everybody is on edge and who would care if some rules are bend just a little bit? Well, Consumer Financial Protection Board is and has been watching and its response? Tightening the screws on mortgage servicers and originators who have been found on the wrong side of the consumer protection laws.
in misconduct when dealing with consumers. To be specific, it says that some lenders engaged in deceptive business practices including the violation of the Truth in Lending Act and the Equal Credit Opportunity Act, while also providing wrongful and inaccurate data on mortgage loans. Some of the practices CFPB uncovered with some lenders (which for some reason it did disclose who) were redlining after the lender received fewer applications from the minority neighborhoods. This obviously raised questions. Furthermore, it was discovered that the lender’s direct marketing and some open house materials used White models and that lender’s offices were concentrated in white neighborhoods and nearly all of its loan officers were white. Moreover, CFPB found that the loan officers from this lender send out internal emails that contained racist and derogatory remarks.
CFPB: Lenders engaged in discrimination, redlining, and reported bad data!
Among its revelations, CFPB uncovered that some lenders engaged
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In its investigations, CFPB also found that there were several instances of “widespread errors” in the lenders’ data disclosures. It disclosed that the financial institutions that botched the credit scoring, rate spread, and debt-to-income data fields on the home mortgage disclosure act will have no choice but to correct and resubmit their disclosures. There were instances where lenders also compensated loan originators differently on the basis of product type which is actually a violation of the Truth in Lending Act. according to CFPB, lenders gave less compensation for the bond loans subject to the requirements of a state Housing Finance Agency. In a separate statement, CFPB warned servicers about how they treat and manage borrowers coming out of forbearance. The Watchdog agency said that it is watching closely how the servicers work to prevent the wave of foreclosure about to happen this fall. In the statement, CFPB said, “Unprepared THE POWER IS NOW MAGAZINE | AUGUST 2021
