Johnston & Associates Special Alert Newsletter

In this newsletter we cover the following:
  • Complimentary Regulatory Round-up PowerPoint and Recordings
  • SPECIAL ALERT: HUD Stays DPA Requirements in Wake of Lawsuit
  • Regulatory Compliance and Litigation Webinars: Complimentary Recordings and PPTs for JT’s Marketing Service Agreement, Loan Officer Compensation, and other Complimentary Webinars
  • The Legal Services we offer at Johnston & Associates
  • Conference Attendance by Johnston & Associates
Welcome to a Special Installment of Johnston & Associates Newsletter

To all our preexisting clients, industry friends and strategic partners whom are in receipt of this special installment of Johnston & Associates Newsletter, as well as any and all the new readers whom have decided to subscribe hereto, we welcome and thank you for taking the time to read about those topics that we believe to be of great importance to the mortgage banking industry.

Along with all the other news updates that we have for our readers, we are very pleased to provide a link whereby our readers can register to receive a complimentary recording of the popular “Regulatory Round-up” Webinar that we had hosted earlier this month, as well as to provide our readers with some very important news regarding the Department of Housing and Urban Development (“HUD”) issued Mortgagee Letter 2019-06. The shortest topic of the HUD announcement provided new rules for down payment assistance on mortgages backed by the Federal Housing Administration (“FHA”).

With regard to some other recent news, Johnston & Associates will have an article published in the May edition of Mortgage Compliance Magazine, entitled “Fannie Mae Backs Dreamers.”  In addition, Johnston & Associates James Brody will be in New Orleans to attend the Mortgage Bankers Association’s 2019 Legal Issues and Regulatory Compliance Conference, as well as leading his own panel on the Lehman Bros. GSE and RMBS Litigation and other matters that our firm is intimately involved with.  Further, given its sustained success, Johnston & Associates will formally open its first branch office in Orange County, California, in June of this year.

Finally, as many of you already know, the professionals who comprise Johnston & Associates Mortgage Banking Practice Group represent our clients in matters that include, but are not limited to, repurchase and make-whole lawsuits, Servicer litigation, third-party mortgage fraud litigation, appeals to HUD’s Mortgagee Review Board, preparation of policies and procedures, creation of Loan Officer Compensation plans, formation of Marketing Service Agreements, assisting with the negotiation and review of Broker and Correspondent LPAs, and much, much more.

Complimentary Powerpoint and Recordings of “Annual Regulatory Round-up: Invaluable Tips for Maintaining Compliance in 2019 and Beyond”

On April 18, Johnston & Associates hosted its complimentary webinar, entitled “Annual Regulatory Round-up: Invaluable Tips for Maintaining Compliance in 2019 and Beyond”, which was very well attended and an overall great success. For all those who attended our Regulatory Round-up Webinar, as well as those who were not able to attend due to space or otherwise, we have received a large number of requests for a copy of the webinar recording and are happy to make such available to any and all whom would like to access such. In order to access a copy of the recorded webinar, please click on the following link:

Webinar details:

With the first quarter of 2019 wrapping up, now is the perfect time to make sure you’re up to date on the top trending Compliance topics of the year.  Johnston & Associates invites you to listen to a complimentary recording of a popular webinar, where James Brody, Chairman of the firm’s Mortgage Banking Practice Group, not only reviews these emerging trends, but also provides practical tips on how to ensure you remain compliant with the requirements.

Some of the main hot topic trends facing our clients that Mr. Brody reviews during the webinar include, but are not limited to, the following:

§ The Digital Mortgage Platform:  A refresher review on electronic disclosure/ESIGN Act requirements; digital record retention requirements; and how to ensure you remain compliant while leveraging digital marketing campaigns.

§  Non-QM Products:  A discussion on the compliance and risk considerations when determining whether or not to offer Non-QM and Non-Agency products, including: disclosure requirements; Ability to Repay rule implications; and the heightened scrutiny these products carry during regulatory examinations.

§  Loan Officer Compensation:  A comprehensive update on the current status of Loan Officer Compensation requirements, including Branch Manager Compensation.

§  Fair Lending:  A deep dive into fair lending best practices, including what constitutes a proper fair lending monitoring program, as well as a review of the recent $25 million fine levied against Citibank by the OCC.

§  State Enforcement:   A review of recent enforcement actions issued by some of the country’s more active state regulatory agencies.

HUD Stays DPA Requirements in Wake of Lawsuit

On April 18th, the Department of Housing and Urban Development (“HUD”) issued Mortgagee Letter 2019-06. The shortest topic of the announcement provided new rules for down payment assistance on mortgages backed by the Federal Housing Administration. (“FHA”)

According to HUD and the FHA, the new rules were meant to provide clarity around what documentation would be required for borrowers who are using funds from another person or entity to cover part of the FHA’s minimum down payment requirement of 3.5%. But some lenders claim the announcement does much more than that.

Most notably is the Cedar Band Corp., which operates the CBC Mortgage Agency, that provides down payment assistance to borrowers nationwide through its Chenoa Fund.

The Cedar Band group claims that HUD’s new rules are not merely “informal guidance” and will result  in “unlawful destruction” of its down payment assistance program and possibly the end of CBC Mortgage Agency’s business.

The Cedar Band group filed suit to fight back and have the rule overturned, claiming that HUD issued the rules both in violation of the law and outside its normal procedures for making rule changes of this type.

“HUD released the letter without prior notice, without soliciting comment, without consulting with affected American Indian tribes and bands, and without gaining the approval of necessary executive branch officials, including the President,” the group stated.

But the suit is not the only way The Cedar Group is fighting back. The group is, also, calling for support for anyone that could be effected, including borrowers and lenders, by leading a petition campaign.

At the request of industry leaders and associations, the FHA on Thursday issued Mortgage Letter 2019-07, officially delaying the implementation of the requirements in its ML 2019-06 for 90 days to allow for comments. ML 2019-06 initially applied to all loans assigned an FHA case number as of April 18. The new effective date is July 23.

You can read the entire mortgagee letter issued by HUD here:

You can find the petition and more about the CBC’s perspective here:

Complimentary Webinar Recordings and Presentation Materials Available from Johnston & Associates Mortgage Banking
We are pleased to offer complimentary recordings and other presentation materials from our recent webinars:
  • January 17, 2019 – “Lehman Bros. GSE and RMBS Litigation: A Comprehensive Review and Analysis” lender only webinar (only available by individual request)
  • July 26, 2018 – “Loan Officer Compensation Tips and Trends: How to Gain a Competitive Edge While Remaining Compliant” webinar
  • June 28, 2018 – “Repurchase and Indemnification Claims in 2018 and Beyond: A Comprehensive Update” webinar
  • May 10, 2018 – “Mergers and Acquisitions in the Mortgage Banking Industry: Expert Insights and Forecasts for 2018 and Beyond” webinar

These materials may be downloaded from our Johnston & Associates website or, for more information concerning any of the foregoing webinars and/or the subject matter of these webinars, please contact its Chairman James Brody.

Legal Services Offered by Johnston & Associates in the Mortgage Banking Industry

Johnston & Associates is a full suite boutique law firm, which amongst other practices such as real estate and commercial litigation, has a nationally recognized Mortgage Banking Practice Group.  With an experienced team of mortgage banking lawyers (including senior litigation attorneys, former in-house General Counsel and in-house Compliance Counsel from a well-known bank and mortgage company, etc.), certified fraud examiner and forensic underwriters, and an extremely competent support staff, all of whom are dedicated to aggressively and competently serving the needs of our valued clientele, Johnston & Associates Mortgage Banking Practice Group is known all across the country for the experience and results that it brings to the areas of regulatory compliance, mortgage banking litigation, and a broad range of mitigation services.

Amongst the many legal services Johnston & Associates offers the mortgage banking industry (e.g., brokers, lenders, servicers, vendors and more), such include, but are in no way limited to, as follows:

  • Mortgage Repurchase and Make-Whole Indemnification Litigation and Mitigation (e.g., Secondary Market Investors, Agencies, etc.)
  • Mortgage Industry Litigation (e.g., Servicer and Sub-Servicer Disputes, 3rd Party Fraud Recovery, CPL and Title Policy Actions, Appraiser E&O Claims, Loan Officer Actions, etc.
  • Mortgage Repurchase and Make-Whole Alternative Dispute Resolution (e.g., Arbitration, Mediation, etc.)
  • Regulatory Compliance, Administrative and Business Services (e.g., Mock Audits, LO Compensation, MSAs, Licensing, CA Dep’t of Business Oversight, HUD Review Board, etc.)
  • Transactional Matters (e.g., Drafting and Negotiating Broker and Correspondent Loan Purchase Agreements, Mergers & Acquisitions, etc.)

Should you have any questions regarding how Johnston & Associates Mortgage Banking Practice Group can be of assistance to you and/or your company, please contact its Chairman James Brody and/or its Co-Chair Ingrid Peterson.

Conference Attendance by Johnston & Associates

Johnston & Associates will have a number of its attorneys in attendance and/or speaking at the following upcoming conferences:

  • May 5-8, 2019: Mr. Brody will be in attendance with colleagues, as well as speaking on a litigation panel (e.g., Lehman Bros, JP Morgan Chase/EMC, etc.), at the National MBA’s Legal Issues and Regulatory Compliance Conference in New Orleans, LA
  • May 19-22, 2019: Mr. Brody will be in attendance with colleagues at the National MBA’s National Secondary Market Conference & Expo 2019, New York, NY.

If you or someone from your company will also be in attendance at the foregoing conferences and would like to set up a complimentary appointment to meet with Johnston & Associates Mortgage Banking Practice Group, please contact its Chairman, James Brody, to schedule a date and time. We hope to see you there!

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