Over Fifteen Years of Professional Service!
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Over Fifteen Years of Professional Service!
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Industry News
Servicing Company Settles HUD Claim: Fairbanks Capital Corp., a mortgage servicing company accused of mistreating its customers, has tentatively reached a $40 million settlement with the U.S. Department of Housing and Urban Development and the Federal Trade Commission. Fairbanks collects payments and handles bookkeeping for over 500,000 loans. Customers alleged the company has been a careless and abusive servicer, and were unresponsive when it made mistakes. The company's majority shareholder, The PMI Group Inc., released a statement saying that under the proposed settlement, Fairbanks would have to demonstrate changes in the way it operates in addition to creating a $40 million fund to benefit consumers allegedly harmed by Fairbanks. There are still a number of pending consumer lawsuits against Fairbanks that remain unsettled. HUD Fines Title Company: The Department of Housing and Urban Development settled an anti-kickback case filed against a closing agent located in Tennessee. The closing agent established a sham title company called TitleVentures in partners with a mortgage broker for the sole purpose of paying kickbacks to the mortgage broker for referring business. The bogus title company had no employees and no separate office space. The mortgage broker contributed little operating capital and performed no work on the actual closing documents. All the work was performed by the closing agents previously established title company. In return for steering business to TitleVentures, the mortgage broker was paid a percentage of each closing. HUD found that this amounted to an illegal kickback scheme under the provisions of RESPA. The closing agent was fined $7,500 and forced to close TitleVenutes. Kentucky Mortgage Brokers Association 2003 Trade Show: The annual KMBA Trade Show was held on October 6th and 7th at the Clarion Hotel off Hurstbourne Road in Louisville, Kentucky. Approximately fifty exhibitors informed and interacted with almost 900 Mortgage Brokers. Special thanks go to Jon McCain, Linda Hudson, Steve Hamm and Rusty Watkins.
Legal News
Kentucky Supreme Court Issues Ruling on Closings: The Kentucky Supreme Court ruled that an Attorney does not have to conduct the actual real estate closing and overturned the Kentucky Bar Association’s Advisory Opinion U-58. Therefore, within certain guidelines established by the Supreme Court, laypersons may handle a real estate closing in Kentucky. When a legal question arises at closing, lay closing agents may not answer except by reading from the document itself without providing any additional explanation. If they cannot do so, they must halt the closing so that the parties may seek legal counsel. If they answer such questions, they could be engaged in the unauthorized practice of law and may be criminally sanctioned as well as face financially liability. In effect, lay persons handling a closing are practically limited to the "point and sign" method of closing. The Court also noted it has always been the law that certain aspects of the real estate transaction must be performed by an attorney, such as preparing the title commitment letter and preparing deeds and mortgages. 'Upcharging' Regulation Now in Effect: A new Kentucky Administrative Regulation restricting the collection and disclosure of fees by lenders and mortgage brokers is now in effect. "Upcharging" or marking up of certain fees is now prohibited. While certain services (appraisal, survey, credit report) are specifically listed, that is not meant to be an exhaustive list. The full text of 808 KAR 12:050 is available upon request. (Copies of these cases may be obtained upon request) Professional closings with a personal touch! |
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