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Mortgage Lending: 8.4.2 Referrals

It is common—and legal—for one person to refer business to another in the real estate business. And it is not unusual for settlement service providers to aggressively solicit referrals.

Mortgage Lending: 8.4.4 Marketing Services Agreements

The CFPB has found some illegal referral fees concealed as marketing services agreements.262 A marketing services agreement (MSA) is ostensibly a contract for one settlement services provider or creditor to pay another for advertising or promotional services.263 But they are ultimately intended to refer customers to a particular service provider.

Mortgage Lending: 8.4.6.1.2 Disclosure of the arrangement

For an affiliated business arrangement to comply with these terms, the existence of the relationship between the referrer and the settlement service provider must be disclosed to the consumer, using the form included with Regulation X.308 The timing of the disclosure depends on a variety of factors and also varies depending on who is making the referral.309 Making the disclosure for the first time at closing should violate RESPA if the timing deprives the consumer of a realistic opportunity

Fair Debt Collection: 11.15.12a Pleading

Before filing an FDCPA complaint, it is important to interview the consumer carefully to identify any harm the consumer suffered beyond experiencing the violation.2143 A very small loss may be sufficient to establish standing.2144

Mortgage Lending: 6.1.2 Preemption Issues Addressed in Other Chapters and Other NCLC Books

This chapter focuses on NBA, HOLA, and FCUA preemption of state laws regulating aspects of a loan other than the interest rate. Federal law also overrides state laws regarding interest rates in a number of circumstances. First, the federal laws governing home loans made or insured by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the Rural Housing Service (RHS) preempt state law limits on interest rates (and also state law limits on a number of other loan terms).

Mortgage Lending: 6.5.3.1 Introduction

The subsections that follow examine the meaning of the various categories of state law limitations that the 2004 and 2011 OCC lending rules list as preempted, and those listed in the savings clause. Because of their substantial overlap, it discusses decisions interpreting the OCC’s preemption rule for non-mortgage loans along with decisions interpreting the parallel provisions of its mortgage rule.340 When relevant, and when not clear from the context, decisions interpreting the 2011 rule are identified as such in the text and footnotes.

Mortgage Lending: 6.5.3.2 Licensing

The regulations provide that national banks may make real estate or other loans without regard to state-law limitations concerning licensing, registration, filings, or reports by creditors.347 A state court applied this rule to hold that a state law requiring national banks to file a notice, designate an agent, and pay a filing fee when transacting business in the state was preempted.348 Another decision holds that the NBA itself preempts a state statute that required an out-of-state plainti

Mortgage Lending: 6.5.3.10 Disbursements and Repayments

The OCC rule identifies disbursements and repayments as another subject on which state laws are preempted.392 A district court cited this rule in holding that the regulations preempted a state law that prohibited a lender from including a cash loan as part of a home improvement loan.393

Mortgage Lending: 6.5.3.12 Loan Amount for Real Estate Loans

For real estate secured loans, the rule states that banks may make loans without regard to state-law limitations relating to the aggregate amount of funds that can be loaned upon the security of real estate.415 One court held that this subsection encompasses a claim that a bank made a loan in excess of the borrower’s needs or ability to repay.416 The subsection seems to be aimed more at caps on loan amounts, however.

Mortgage Lending: 6.5.3.14 Due-on-Sale Clauses

For real estate secured loans, state laws relating to due-on-sale clauses are preempted,435 with exceptions as provided in the Garn-St Germain Act.436 That law includes its own preemption provision437 and has been interpreted by a number of courts.438 Due-on-sale clauses and the Garn-St Germain Act are discussed in detail in another treatise in this series.

Mortgage Lending: 6.5.3.15 Covenants and Restrictions in Leases

The rule states that national banks can make loans without regard to state-law limitations on the covenants and restrictions that must be contained in a lease to make it qualify as acceptable security for a real estate loan.440 The scope of this provision is unlikely to be an issue in consumer cases.

Mortgage Lending: 6.5.4.1 General Interpretation of the Savings Clause

After listing subject areas in which national banks can disregard state laws, each of the OCC’s preemption rules then includes a savings clause that lists types of state laws that are not preempted under certain circumstances.441 Under the pre-Dodd-Frank Act rules, these laws were not preempted “to the extent that they only incidentally affect the exercise of” national banks’ powers.

Mortgage Lending: 6.5.4.4 Criminal Laws Not Preempted

The OCC regulations carve out criminal law as an area that is not preempted. But the regulations include footnotes endorsing the view of an early United States Supreme Court decision466 that, while general criminal laws can be applied to national banks, those directed specifically at banks cannot.

Fair Debt Collection: 16.1.2 Preemption Issues

The FDCPA does not preempt state statutory claims unless they are inconsistent with it.4 A consumer can recover statutory damages under both the FDCPA and a state debt collection statute.5 Nothing in the FDCPA prevents a state from, as a matter of state law, applying its prohibitions to entities that the FDCPA does not cover. 6