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Truth in Lending: 9.10.8 Pyramiding of Late Fees

Effective January 10, 2014, the CFPB adopted a rule similar to the prior FRB rule (discussed in companion materials), but removed any reference to a “full” payment and instead applied the requirement only to “a periodic payment.”1390 The distinction between the meanings for “full” payment and “periodic” payment intended by this change in the regulations is unclear.

Truth in Lending: 9.5.4.5.1 General

Unless an exemption applies (described below), creditors of higher-priced mortgage loans (HPMLs) must establish an escrow account for the payment of property taxes and insurance.503 The FRB’s original mandatory escrow rule applies to higher-priced mortgage loans if the loan application was received on or after April 1, 2010 (October 1, 2010, for manufactured homes).504 This rule was substantially modified by the FRB, pursuant to the Dodd-Frank Act, by setting a higher threshold for mandatory

Fair Credit Reporting: 8.5.5 Enforcement of Right

The 2003 FACTA amendments to the FCRA appear to have eliminated the ability of consumers to privately enforce the adverse action notice requirements of the FCRA. As part of those amendments, Congress added the following language to 15 U.S.C. § 1681m:

(8) Enforcement

Truth in Lending: 9.3.2.4 The Definition of Loan Originator

The CFPB’s rule largely builds off of the FRB’s prior rule, adding detail and exceptions. This subsection only reviews the ways in which the CFPB’s rule differs from the preexisting rule issued by the FRB. Practitioners seeking to understand the scope of the CFPB’s definition of a loan originator should review the discussion of the FRB’s rule in § 9.3.2.4.1 of the archived version of Chapter 9 available online as companion material to this treatise.

Fair Credit Reporting: 3.6.1.4 OFAC Alerts

Yet another example of a failure to provide all information in a consumer’s file (albeit perhaps difficult to privately redress) is Trans Union policy of not including information from the U.S.

Fair Credit Reporting: 3.6.1.5 Disclosure of Previously Reported Information

Consumer reports show the present status of a consumer’s file, and do not disclose the information that may have been provided to a user in the past. An important issue is whether CRAs are in fact required to disclose the content of such prior reports, because it is the prior reports that form the basis of a user’s adverse action.

Fair Credit Reporting: 3.6.1.6 Disclosure of Other Persons in Consumer’s File

The disclosure right is limited to information in the CRA’s files “on the consumer.”523 The consumer has no right to information on other individuals. However, if information that relates to other individuals is retained in a consumer’s files, that must be disclosed given the requirement that a “CRA must disclose all items in the consumer’s file.”524

Fair Credit Reporting: 3.6.1.1 Statutory Standard

With a limited number of exceptions, the FCRA requires that all information in the consumer’s file at the time of the consumer’s request must be provided to the consumer.466 The Act explicitly requires CRAs, upon request of the consumer, to “clearly and accurately disclose . . .

Fair Credit Reporting: 4.4.7.1 Generally

The FCRA mandates specific procedures when a CRA furnishes “items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer’s ability to obtain employment.”1065 This requirement applies only when the consumer report is furnished for employment purposes1066 and the public record information is adverse.

Fair Credit Reporting: 4.4.7.2 Election to Notify Consumer of Release of Public Record Information

The first option that a CRA can choose is to notify the consumer, at the time that public record information is released, that the CRA is furnishing public record information to a user, together with the name and address of the person to whom such information is being released.1081 This option is necessary for CRAs that generate their employment reports from a preexisting database rather than collect the data from court records on an as-needed basis.

Fair Credit Reporting: 4.4.7.3 Election to Establish Strict Procedures for Complete and Up-to-Date Public Record Information

The second option a CRA can elect is to maintain strict procedures to ensure that the public record information is both complete and up to date.1089 While section 1681k does not specifically use the term “accuracy,” some, but not all, courts have held that inaccurate information violates this section.1090 Compliance with this section is in addition to compliance with section 1681e(b).1091 Whether a defendant followed strict procedures is gene

Fair Credit Reporting: 4.4.7.4 Exemption for National Security Investigations

The procedures required for the reporting of adverse public record information for employment purposes does not apply in the case where a United States agency or department seeks the report, if the head of that agency or department makes a written finding.1116 The finding must state that the report is relevant to a national security investigation, the investigation is within the jurisdiction of the agency or department, and there is reason to believe that one of six conditions will occur, if the exemption does not apply.

Fair Credit Reporting: 4.3.5.2 How Errors Occur in Public Record Information

There are several ways that public record information in a consumer’s file can end up with errors. Just like information from furnishers, the source public record could itself contain an error.466 Consumer reporting agencies are not likely to discover and correct such errors on their own. In addition, errors are sometimes made by CRAs (or the companies they hire) in copying information from public records.

Fair Credit Reporting: 4.3.8 Duplicative Reporting

Duplicate accounts can occur when debts are sold or transferred from one furnisher to another, either for collection or as part of sale of a portfolio of loans. This problem especially affects student loans532 and debt collection accounts.533 One older study revealed that twenty-nine percent of tradelines, fifteen percent of inquiries, and twenty-six percent of public record entries were duplicates.534

Fair Credit Reporting: 3.6.4.2 Disclosure of Sources of Reporting Information

The CRA must disclose to the consumer not only all information in the consumer’s file at the time of the request, but also must clearly and accurately disclose the sources of that information.560 Thus, CRAs must disclose the identity of all furnishers of information,561 with the exception of medical furnishers.562 The consumer should not need to specifically request that the CRA identify the sources, although there is conflicting caselaw.

Consumer Class Actions: 15.5.10 How and When to Object

15.5.10.1 Filing the Objection

In addition to checking local rules or standing orders for filing objections, an objector should be sure to carefully follow the provisions for objecting that are contained in the order granting preliminary approval, and should also review the class notice and settlement agreement—even if these provisions go beyond local procedures (and they usually do)—in order not to lose an objection on a technical flaw, such as filing the objection too late.

Mortgage Servicing and Loan Modifications: 7.3.2 Payment Deferral

In March of 2020, the GSEs announced the creation of a new payment deferral option to assist borrowers with short-term defaults who cannot afford a payment plan.134 Subsequently, the GSEs announced deferrals for pandemic and disaster related defaults, which are distinct from the general payment deferral and are covered elsewhere.135 The GSEs created the payment deferral in order to assist borrowers who have recovered from short-term hardships and who can afford to restart their pre-hardship

Mortgage Servicing and Loan Modifications: 7.3.2 Payment Deferral

In March of 2020, the GSEs announced the creation of a new payment deferral option to assist borrowers with short-term defaults who cannot afford a payment plan.135 Subsequently, the GSEs announced deferrals for pandemic and disaster related defaults, which are distinct from the general payment deferral and are covered elsewhere.136 The GSEs created the payment deferral in order to assist borrowers who have recovered from short-term hardships and who can afford to restart their pre-hardship paym

Mortgage Servicing and Loan Modifications: 7.5.4 Relief Options

Relief options allow borrowers to gradually pay back delinquent amounts or temporarily reduce the amount of the mortgage payment or temporarily stop making mortgage payments. All relief options must result in the borrower bringing their mortgage current or paying the mortgage in full. Freddie Mac will consider proposals from servicers on behalf of borrowers who do not meet the eligibility requirements for a proposed relief option if the relief option is the best possible solution to cure the delinquency.263

Home Foreclosures: 16.1 An Overview of the Process

All states have statutes that authorize both the creation of a lien against real property when taxes on the property are not paid and the enforcement of this lien by a sale of the property.1 These statutory schemes are not uniform. Nevertheless, enough common features exist to permit some generalizations. While a detailed comparison of state property tax laws is beyond the scope of this treatise, this chapter discusses the basic legal principles involved in the real estate tax and enforcement process.