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National Mortgage News--Caitlin McCabe; The Philadelphia Inquirer

Philadelphia officials announced the expansion of a program that will give first-time homebuyers and other eligible city residents up to $10,000 when they purchase a home in the city.

The revamped program, called Philly First Home, is expected to launch in June and aims to help make homeownership more affordable as the city sees its most robust building boom to date. The funds from the program can be used toward down payments and closing costs, officials said. Only Philadelphia residents who have lived in the city for three years are eligible.

Recipients can receive up to $10,000, or 6% of the purchase price of a home — whichever is less, provided in the form of a loan that will be forgiven if a resident stays in the home for at least 15 years. Applicants must be first-time home buyers or residents who have not owned a home for at least three years, have a household income at or below 120% of the area median income, and complete housing counseling at an agency funded by the Division of Housing and Community Development, which is launching the program.

According to the U.S. Department of Housing and Urban Development's guidelines, a single person making up to $75,720 would be eligible. A household with two would qualify with a combined income of $86,520. For a household of four, the income cutoff is $108,120.

The program's launch comes during a period of unprecedented change in Philadelphia, as younger and wealthier residents move into the city. The median sale price of a home has surged nearly 30% in the last five years, according to Zillow, jumping from $125,000 in March 2014 to $162,600 in March 2019, the latest data available.

Philadelphia's growth has highlighted massive inequities in the city, as the poverty rate hovers at about 26%, longtime residents fear being pushed out, and starter homes have become more difficult to find. Those problems have been exacerbated by a growing consumer debt crisis, including burdensome student loans, which has increasingly made home ownership out of reach for more Americans.

"We have to think about stabilizing our existing housing stock, and that means making sure that the pursuit of attaining the great American Dream ... is accessible," Councilwoman Cherelle Parker, who represents North Philadelphia neighborhoods, including West Oak Lane, said at a Thursday news conference.

Parker was joined by multiple members of City Council, including Council President Darrell Clarke, Councilwoman Maria Quinones-Sanchez, and Councilman Al Taubenberger, as well as members of Mayor Jim Kenney's administration, community organizations, and the real estate industry.

Beth McConnell, policy director for the Philadelphia Association of Community Development Corporations, in her remarks called the program "one critical way that Philadelphia is responding to gentrification ... [by] directing resources to people who could be hurt by that growth or pushed out."

Philadelphia has previously provided down payment assistance, including a current program that offers homebuyers grants of $1,000 through a partnership with JPMorgan Chase & Co. The launch of Philly First Home will expand that assistance to up to $10,000, with $3 million coming this year from the Housing Trust Fund.

Last year, after a proposed 1 percent tax on construction costs fell apart, Council members and Kenney instead agreed to contribute the real estate tax revenue from properties with expiring 10-year tax abatements to the city's Housing Trust Fund. Officials deposited $19 million into that fund earlier this year. Beyond the home ownership assistance program, money from the fund is expected to be used to expand affordable rental and home ownership opportunities.

With the $3 million contribution to the Philly First Home program, officials expect to assist roughly 300 households this year, said Anne Fadullon, the city's director of planning and development. She added that $2.5 million has been earmarked for next year.

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MortgagesOctober 1, 2018

The financial assistance provided by the program will become a second lien on the property, city officials said. If the home is sold or leased — or a resident refinances the first mortgage to take cash out of the property — within the first 15 years of ownership, the lien will become due and payable.

City officials said that the lien will be forgiven after 15 years of home ownership.

Tribune Content Agency

The Illinois Department of Financial and Professional Regulation adopted rules to amend certain parts of its Residential Mortgage License Act that include independent loan processor licensing, as well as bond and advertising requirements. These provisions are effective immediately.

The state of New Jersey enacted provisions relating to the disclosure of a security breach of an online account. These provisions are effective on September 1, 2019.

Oklahoma Senate Bill 915 establishes remote online notarial acts; establishing procedures for online notarizations.

These provisions are effective on January 1, 2020.

Utah House Bill 247 repeals the following “RESPA Caption” requirement promulgated under Utah Code Ann. § 17-21-18.5(4)(a) & (b):

“(a) For recording a document that is subject to and complies with the Real Estate Settlement and Procedure Act, 12 U.S.C. Sec. 2601 et seq. for a residential property constructed for at least one family but no more than four families, the county recorder shall receive:

(i) $14 for each deed of conveyance;

(ii) $40 for each deed of trust; and

(iii) $14 for each assignment of a deed of trust when recorded concurrently with the assigned deed of trust.

(b) If a person submits for recording a document described in Subsection (4)(a), the person shall notify the county recorder by including the word ‘RESPA’ in at least 16 point font on the front page of each document.”

This repeal is effective May 14, 2019.

Minnesota House Bill 1840 removes all references to "subprime" from the Minnesota Statutes. 

These provisions are effective on July 1, 2019.

Weiner Brodsky Kider PC

On April 15, 2019, the Iowa Governor signed House File 260 (HF 260), amending the maximum interest rate or charges permitted for certain loans under the Iowa Regulated Loan Act and implementing a permissible maximum service charge for certain loans under the Iowa Consumer Credit Code.

First, HF 260 broadens the authority of the Iowa Banking Superintendent to set a maximum rate of interest or charges permitted on certain regulated loans under the Iowa Regulated Loan Act.  In particular, the authority of the Superintendent to set the maximum rate or charges will now extend to loans with the maximum unpaid balance amount of $30,000, instead of $10,000. 

Second, HF 260 amends the Iowa Consumer Credit Code by allowing consumer finance lenders to collect a service charge not to exceed the lesser of ten percent of the amount financed or thirty dollars on interest-bearing consumer credit transactions.  This includes, without limitation, consumer loans, consumer leases, and credit granted pursuant to a seller credit card.  The consumer finance lender, however, may not collect a minimum charge upon prepayment of an interest-bearing consumer credit transaction if the lender has collected a service charge.  

HF 260, according to the Iowa Legislature, is effective on July 1, 2019.

HousingWire--Kathleen Howley

Indiana Attorney General Curtis Hill filed a lawsuit Monday against Equifax seeking consumer restitution and penalties related to the 2017 breach that exposed the Social Security numbers and other personal data of more than half the adult population of America.

“This action against Equifax results from an extensive investigation, and we will continue our diligent efforts to protect consumers from illegal or irresponsible business activities,” Hill said.

The suit cites Congressional testimony by Equifax’s former CEO Richard Smith in which he acknowledged that the U.S. Department of Homeland Security notified the company in March 2017 about vulnerability in software the company was using. There was a patch, or update, that could have fixed the problem before attackers gained entry to the system, but Equifax didn’t apply it, Smith told the committee.

Criminals breached the Equifax system two months later, and stole information that, in addition to Social Security numbers, included passport numbers, driver’s license numbers, emails and credit card information of about 148 million people, Equifax said in regulatory filings. In July 2017, Equifax discovered the data breach, but didn’t let people know for another month and a half, the company said.

Equifax did not return a phone call and an email from HousingWire seeking comment.

The lawsuit also cites a report by the U.S. House of Representatives Committee on Oversight and Government Reform that found the breach was “entirely preventable.”

The Government Accountability Office released a report in March recommending the Consumer Financial Protection Bureau and the Federal Trade Commission expand oversight of credit reporting agencies.

In February, Equifax said in regulatory filings the CFPB and the FTC have notified the company they expect to seek “injunctive relief damages” related to the 2017 data breach. Beyond that, the CFPB plans to seek “civil money penalties,” Equifax said.

Equifax said it has submitted written responses to both agencies addressing the allegations, and said it continues to cooperate with the investigations.

Indiana House Bill 1136 makes the following changes to the Uniform Consumer Credit Code (UCCC): 

(1) Amends the provisions authorizing specified additional charges for consumer loans to permit a lender to contract for and receive a transaction fee for a revolving loan account that may not exceed the greater of: (A) 2% of the amount of the transaction; or (B) $10. (Current law authorizes the lender to charge a transaction fee in the lesser of these two amounts.) 

(2) Replaces the authorized $5 delinquency charge (subject to indexing by the department of financial institutions) for consumer credit sales and consumer loans with a nonindexed delinquency charge of: 

(A) $5, if installments are due every 14 days or less; 

(B) $25, if installments are due every 15 days or more; or (C) $25, in the case of a single installment due at least 30 days after the sale or loan is made. 

(3) Specifies that a creditor may not charge or collect a delinquency charge on a payment that: 

(A) is paid within 10 days after its scheduled due date; and 

(B) is otherwise a full payment of the payment due for the applicable installment period; if the only delinquency with respect to a consumer credit sale or a consumer loan is attributable to a delinquency charge for an earlier installment. 

(4) Specifies that an initial pleading related to a debt collection action filed by a debt buyer must include certain information. 

(5) Makes a violation a deceptive act. 

(6) Urges the legislative council to assign to an interim study committee, for study during the 2019 interim, the topic of revisions to the UCCC. 

(7) Sets forth issues for consideration by an interim study committee assigned this topic.

These provisions are effective on July 1, 2019.

Ballard Sparh, LLP--Pavitra Bacon

On April 26, the South Carolina Servicemembers Civil Relief Act (the “Act”) was signed into law and went into immediate effect. The Act seeks to “expand and supplement” the federal Servicemembers Civil Relief Act (“SCRA”), and provides that an SCRA violation constitutes a violation under the Act. The Act expands servicemember protections in a few important ways:

1. the Act’s definition of “military service” covers members of the South Carolina National Guard who are on active duty (as defined by the statute) for a period of more than 30 days;
2. the Act’s protections extend to dependents of servicemembers engaged in military service; and
3. a servicemember may terminate certain types of contracts after receiving “military orders to relocate for a period of service of at least ninety days to a location that does not support the contract” without being subject to an early termination fee.

The Act includes a private cause of action and, in the event of an intentional violation, the Act provides for a civil penalty not to exceed $5,000 per violation that is to be retained by the state. The Act applies to contracts entered into on or after April 26, 2019.

Colorado House Bill 1172 enacts an organizational recodification of title 12 of the Colorado Revised Statutes, and, in connection therewith, limiting substantive changes to those that conform similar provisions to achieve uniformity, eliminate redundancy, or allow for the consolidation of common provisions or that eliminate provisions that are archaic or obsolete.

These provisions are effective on October 1, 2019.

Indiana House Bill 1440 reorganizes current provisions regulating loan brokers and moves the reorganized provisions to a new article, including: 

(1) the loan broker regulation account; 

(2) licensure and notice requirements; 

(3) education and examination requirements for licensure; 

(4) requirements for loan broker offices, personnel, and conduct of business; and 

(5) violations and enforcement. 

Makes conforming amendments. Repeals the current law regulating loan brokers.

These provisions are effective on July 1, 2019.