Tag Archives: Truth in Lending

CFPB Proposes Amendments to New Final Ability-to-Repay Rule, Solicits Comment on Calculating Loan Originator Compensation

On January 10, 2013, the CFPB issued its final ability-to-repay rule (Rule), which implements Dodd-Frank mortgage reforms requiring creditors to make a reasonable and good faith determination that a consumer will have a reasonable ability to repay the loan according to its terms. Failure to comply with these requirements may give rise to various damages … Continue reading this entry

CFPB Issues Final Rules Amending Regulation X and Regulation Z

Today, the CFPB issued final rules amending Regulation X (Real Estate Settlement Procedures Act (“RESPA”)) and Regulation Z (Truth in Lending Act (“TILA”)). The amendments focus on mortgage servicing requirements and servicer obligations, and largely track the CFPB’s proposed rules issued August 10, 2012. The CFPB’s announcement of the final rules includes the preamble, regulatory text and … Continue reading this entry

Final Rule Issued on Ability-to-Repay/Qualified Mortgages

The Consumer Financial Protection Bureau (CFPB) issued its final ability to repay rule (Rule) on January 10, 2013. The Rule implements ability-to-repay provisions of the Dodd-Frank Act, which imposed strict underwriting standards upon lenders to ensure that prospective buyers have the ability to repay their mortgages. A failure to comply with these requirements will constitute a … Continue reading this entry

Class of Subprime Borrowers Made "Bad Bargain," Failed to Allege Violation of TILA's Disclosure Requirements, Second Circuit Holds

The Second Circuit has affirmed the Federal Rule 12(b)(6) dismissal of a Truth in Lending Act (TILA) claim in Poulin v. Balise Auto Sales, Inc., holding that the plaintiffs failed to allege facts suggesting that their purchases of cars with subprime installment loans included undisclosed finance charges, even though the plaintiffs purportedly paid substantially more than book value and alleged that purchasers with good … Continue reading this entry

Fourth Circuit: TILA "Consumer Credit Transaction" Means Closed Transactions

A-B-C. A-Always, B-Be, C-Closing. Always be closing, always be closing. Blake, Glengarry, Glen Ross. In David Mamet’s masterpiece, Glengarry, Glen Ross, a group of sad sack real estate salesmen are forced into a myopic focus on closing the deal by their overbearing, egomaniacal leader, Blake. Now that the the Fourth Circuit Court of Appeals has … Continue reading this entry

Third Circuit Joins Other Circuits, Holding That A Plaintiff Must Prove Detrimental Reliance To Recover Actual Damages For TILA Disclosure Violation

In Vallies v. Sky Bank, the Third Circuit joined the First, Fifth, Eighth, Ninth, and Eleventh Circuits, holding that the Truth in Lending Act (“TILA”) requires plaintiffs to prove actual damages sustained as the result of a disclosure violation. Plaintiff Vallies entered into a loan and security agreement with the defendant Sky Bank, which financed … Continue reading this entry

Home Equity Line of Credit Reduction Cases on the Rise

There have been a number of lawsuits throughout the country this past year arguing that lenders have unlawfully suspended or reduced home equity lines of credit (“HELOCs”). Although the theory underlying these cases find its genesis in the recent declines in the real estate market, one court has already permitted a claim to proceed. Under … Continue reading this entry

Seventh Circuit Rejects Argument That TILA Was Violated By Coupling A Service Contract Or Extended Warranty With A Financing Agreement

The Seventh Circuit has affirmed the dismissal of a Truth in Lending Act (“TILA”) claim in Sales v. Urankar, et al. In Sales, the plaintiff alleged that he entered into a retail installment contract for the purchase of truck that violated TILA because it was conditioned on the plaintiff’s agreement to a service contract or … Continue reading this entry

First Circuit Affirms Dismissal Of TILA Claim Based On End-Of-Month APR Increase; Circuit Split Remains

The First Circuit Court of Appeals has affirmed the District Court of Massachusetts dismissal of a putative class action raising claims under the Truth in Lending Act (TILA) and Massachusetts unfair or deceptive trade practices law. In Shaner v. Chase Bank USA, NA, the named plaintiff (Shaner) claimed that, as a result of her own … Continue reading this entry

Third Circuit Sidesteps Strict Liaiblity Argument For "Excessive" Title Insurance Fees Under TILA

Yesterday, in In re Madera, the United States Court of Appeals for the Third Circuit rejected the appellants claim that the Truth in Lending Act (“TILA”) requires lenders to disclose title insurance fees if the amount charged is higher than the prevailing rates set forth in the Manual of Title Insurance Rating Bureau of Pennsylvania … Continue reading this entry