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Lender Still on the Hook Despite CFPB Consent Order

A recent motion filed by a mortgage
company to dismiss portions of a class action suit against it shows, according
to an attorney familiar with the matter, that a consent order settling charges
brought by the Consumer Financial Protection Agency (CFPB) “does not
necessarily bring finality to the issues it covers.”   At least not in the absence of releases
from affected consumers.

Barbara S. Mishkin, writing in the
Ballard & Spahr CFPB Monitor says
that earlier this week Castle & Cooke Mortgage, LLC filed a motion to
dismiss
three counts in a class action complaint filed against it in federal
court last July.  The named plaintiff, a consumer,
had received redress under a consent order from CFPB against Castle &
Cooke finalized in November 2013.  The
order had settled charges that the mortgage company had violated the Regulation
Z loan originator compensation rule by establishing a quarterly bonus system
giving loan officers greater bonuses for originating loans at higher interest
rates.  CFPB maintained that the bonus
system was not reflected in the company’s compensation agreements and while
payroll records reflected the bonuses there was nothing indicating what portion
of a bonus was attributable to which loan

 

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