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Mortgage Lending: § 206.308 Continuing education requirements of counselors listed on the HECM Counselor Roster.

A HECM counselor listed on the Roster must receive, on a continuing basis, training, education, and technical assistance related to HECMs. The HECM counselor must maintain evidence of the successful completion of such continuing education, and such evidence must be made available to FHA upon request. FHA will consider a HECM counselor’s successful completion of a HECM course no less than once every 2 years as satisfying the requirements of this section.

Mortgage Lending: Listing of Provisions

Title 24—Housing and Urban Development

Subtitle B—Regulations Relating to Housing and Urban Development

Chapter II—Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B—Mortgage and Loan Insurance Programs Under National Housing Act and Other Authorities

Part 214—Housing Counseling Program

Mortgage Lending: 24 C.F.R. § 214.313 Housing counseling fees.

(a) Participating agencies may charge reasonable and customary fees for housing education and counseling services, as long as the cost does not create a financial hardship for the client. An agency’s fee schedule must be posted in a prominent place that is easily viewed by clients, and be available to HUD for review.

(b) Agencies must inform clients of the fee structure in advance of providing services. Clients cannot be charged for client intake.

Mortgage Lending: Introduction and Listing of Provisions

The Consumer Financial Protection Bureau (CFPB) now has authority to issue Regulation Z and its commentary, interpreting the Truth in Lending Act. See Pub. L. No. 111-203, tit. X, §§ 1100A, 1100H, 124 Stat. 2107, 2113 (July 21, 2010). On December 27, 2011, the CFPB issued its version of Regulation Z and its commentary, which is reprinted here. See 76 Fed. Reg. 79,772 (Dec. 22, 2011). The Federal Reserve Board, however, has not withdrawn its version of Regulation Z and related commentary. See 24 C.F.R. part 226.

Mortgage Lending: 12 C.F.R. § 1026.33 Requirements for reverse mortgages.

(a) Definition. For purposes of this subpart, reverse mortgage transaction means a nonrecourse consumer credit obligation in which:

(1) A mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the consumer’s principal dwelling; and

(2) Any principal, interest, or shared appreciation or equity is due and payable (other than in the case of default) only after:

(i) The consumer dies;

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter X—Bureau of Consumer Financial Protection

Part 1026—Truth in Lending (Regulation Z)

Sec.

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Supplement I to Part 1026—Official Interpretations

AUTHORITY: 12 U.S.C. §§ 5512, 5581; 15 U.S.C. §§ 1601 et seq.

SOURCE: 76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011), unless otherwise noted.

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Mortgage Lending: 33(a) Definition

1. Nonrecourse transaction. A nonrecourse reverse mortgage transaction limits the homeowner’s liability to the proceeds of the sale of the home (or any lesser amount specified in the credit obligation). If a transaction structured as a closed-end reverse mortgage transaction allows recourse against the consumer, and the annual percentage rate or the points and fees exceed those specified under § 1026.32(a)(1), the transaction is subject to all the requirements of § 1026.32, including the limitations concerning balloon payments and negative amortization.

Mortgage Lending: 33(c) Projected Total Cost of Credit

33(c)(1) Costs to Consumer

1. Costs and charges to consumer—relation to finance charge. All costs and charges to the consumer that are incurred in a reverse mortgage transaction are included in the projected total cost of credit, and thus in the total annual loan cost rates, whether or not the cost or charge is a finance charge under § 1026.4.

Collection Actions: 5.2.1 Collector Error in Determining Amount Due

Though computer records create the illusion of accuracy with respect to the amount due sought by a collector, what actually happens with credit records as they are passed from creditor to debt buyer to collection attorney paints a very different picture. For example, an Office of the Comptroller of the Currency investigation found startling errors in the amount that JP Morgan Chase sued on consumer credit card debt.39

Collection Actions: 5.2.2 Misapplication of Payments

Particularly when a debt is sold and resold, or when a creditor has hired multiple collection agencies to collect the same debt, consumer payments to these various entities may not all be properly credited, resulting in the collector claiming an excessive amount owed or seeking collection on a debt already paid in full.46 This can happen when a consumer makes a payment to the original creditor after the debt buyer has purchased the account.47 In fact, the debt buyer may have no system in place to ac

Collection Actions: 5.2.3 Sales-Related Claims As Defense to Credit Card Obligations

The Truth in Lending Act provides that a credit card issuer is subject to all claims (except tort claims) and defenses of a consumer against a merchant when the consumer uses a credit card as a method of payment or extension of credit, if certain conditions are met.51 That is, the consumer can dispute the amount owed on a credit card obligation by claiming that the purchases at issue involve claims against the merchant, such as product or service defects, deception, or nondelivery.

Collection Actions: 5.2.4 Sales-Related Claims As Defenses to Other Forms of Credit

Many sales transactions involve either a credit-sale, where the seller originates the credit, or the seller arranges for credit from a third party to allow the consumer to make the purchase. A prime example is a motor vehicle sale where the dealer originates and assigns the motor vehicle installment sales agreement or where the dealer arranges financing from a third party. Other examples are home improvement sales, manufactured home sales, furniture sales, and electronic appliance sales.

Collection Actions: 5.2.5 Servicemembers’ Dispute As to Finance Charges

When an obligation was incurred prior to a servicemember’s active duty, the interest rate and late payment fees on any credit obligation must be reduced to 6% while the servicemember is on active duty.53 Any additional charges must be forgiven, not deferred, and spouses jointly liable on the obligation share the same rights as the servicemember.

Collection Actions: 5.2.6 Where Debt or Interest Portion of Debt Is Void

State law often finds that usurious interest charges void or makes voidable either the interest charges or the principal and interest.55 A good example may be a payday loan for which interest rates exceed that allowed by law.56 If a loan obligation is void in whole or in part, this is a valid defense to the collection action.

Washington State has a statute providing that:

Collection Actions: 5.2.7.1 Generally

Often, consumers make a payment on a debt in reliance on the creditor’s or debt buyer’s representation that the partial payment will be in full settlement of the amount owed, or pursuant to an agreement that, if the consumer follows a revised payment schedule, the total remaining obligation will be reduced. Customer service agents are often authorized to waive or reduce fees and interest rates in response to customer requests.

Collection Actions: 5.2.8 Discharging the Debt by Accord and Satisfaction

When a consumer has made a partial payment of the amount the collector seeks, and notifies the collector that the payment is in full accord and satisfaction of the debt, then the debt is discharged if certain conditions are met. For payments made by check, these conditions are set out in U.C.C. § 3-311.85

Collection Actions: 5.2.9 Prior Collection Action on the Same Debt

A surprisingly common practice is for the consumer to be sued twice on the same debt.95 For example, a debt buyer may sell an account after the debt buyer’s collection lawsuit has been dismissed with prejudice. Alternatively, a consumer can be sued on a debt, pay it off in full, and be sued on the same debt again. The same consumer debt is regularly sold and resold to multiple debt buyers, often as part of a portfolio of thousands of accounts that may be evidenced by nothing more than an Excel file.

Collection Actions: 5.2.10 Debts Discharged in Bankruptcy

The discharge of a debt in bankruptcy is a complete defense to that debt. Nevertheless, some collectors continue to sue on debt discharged in bankruptcy. For example, in one case, a U.S. trustee alleged that Capital One filed 5600 bankruptcy proofs of claim for debts previously discharged in bankruptcy.

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter 13—National Housing

Subchapter II—Mortgage Insurance

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12 U.S.C. § 1715z-20. Insurance of home equity conversion mortgages for elderly homeowners

Mortgage Lending: Listing of Provisions

Title 15—Commerce and Trade

Chapter 41—Consumer Credit Protection

Subchapter I—Consumer Credit Cost Disclosure

Part B—Credit Transactions

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15 U.S.C. § 1648. Reverse mortgages

Mortgage Lending: Listing of Provisions

Title 24—Housing and Urban Development

Subtitle B—Regulations Relating to Housing And Urban Development

Chapter II—Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B—Mortgage and Loan Insurance Programs Under National Housing Act and Other Authorities

Part 206—Home Equity Conversion Mortgage Insurance