An Update on CFPB and Tax Reform

CFPB Update; Tax Reform; Assembly is Coming; E Closings An Update on CFPB and Tax Reform

I hope you are not reading this because you are home with the flu and need something to help you doze off and get some sleep! There is something going around my office and I am trying my best to avoid it. But a nap sounds good...

Anyway, here are some things that I think you will find interesting.

CFPB Update:
  • Mick Mulvaney still in charge. Leandra English, appointed by former Director Cordray as Deputy Director of CFPB before Corday’s resignation, continues to litigate whether Mulvaney is the true Director under the law. But at the moment, Mulvaney is running things.
  • Director Mulvaney recently issued a very interesting memorandum to the employees at CFPB. A change in philosophy and approach is clearly the word. Here are some excerpts:
    • “We are government employees. We don’t just work for the government, we work for the people. And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them. All of those people are part of what makes this country great. And all of them deserve to be treated fairly by their government.”
    • “Let me be clear: there will absolutely be times when circumstances dictate that we take dramatic action to protect consumers. And at those appropriate times, I expect us to be vigorous in our enforcement of the law. But bringing the full weight of the federal government down on the necks of the people we serve should be something that we do only reluctantly, and only when all other attempts at resolution have failed.”
    • “On regulation, it seems that the people we regulate should have the right to know what the rules are before being charged with breaking them. This means more formal rulemaking on which financial institutions can rely, and less regulation by enforcement.”

  • The D.C. District Court of Appeals has issued its ruling in the PHH Home Equity Case. Highlights of the decision:
    • The single-director structure of the CFPB is constitutional.
    • Former Director Cordray’s interpretation of RESPA Section 8(c)(2) was not adhered to by the court. So the decision of the three judge panel that reversed Cordray’s interpretation was reinstated. This means that the interpretation of Section 8(c)(2) under HUD’s standards has been put back in place. Was that confusing enough?
    • Bottom line: Section 8(c)(2) is an exemption from the anti-kickback prohibitions of Section 8(a) of RESPA as long as reasonable payments are made in return for services actually performed or goods actually furnished.
Tax Reform:

There is a lot in the recent tax reform bill approved by Congress and signed into law. One area of the tax law that did not change was the exemption from capital gains for the sale of a primary residence. ALTA deserves most of the credit in reinstating this provision into the final bill. Both the House and Senate previously had passed bills requiring that you would have to live in your home five out of the past eight years instead of the currently mandated two of the past five to avoid capital gains taxes when you sold the home. Normally, when the House and Senate pass identical bills or provisions, those proposals will become law. But the ALTA team developed and argument with supporting date that how many taxpayers would be impacted by the change and how it would hinder mobility, especially for millennial buyers and families. Thank you, ALTA!

Fund Assembly is coming.

Mark your calendars for May 10, 11 and 12, 2018 and register for the best real estate related conference in Florida. Take advantage of topics such as “Scams and Frauds in Real Estate Transactions,” “Technology in the Law Office” and our annual “Legislative Update.” And how can you pass up “Mortgage modifications, rating, novation, use of endorsements ?” Hope to see you there! Learn more and Register!  


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There is no question in my mind that real estate closings will change over the next 2-3 years and move in the direction of less paper and more technology. The technology is there. Lenders are recognizing the efficiency and cost savings associated with processing loans digitally. Consumers are getting much more comfortable conducting business digitally. These forces will move us (whether we like it or not) in this direction. The Fund has put together a team of folks to get you ready for these changes.

Over the next several months, we are getting as smart as we can about this new way of doing business and then we are going to “bring it on!” We will give you a lot of opportunities to learn about e-closings and to incorporate these into your practice.


Let me know how we can help you,

Melissa Jay Murphy

Executive Vice President, Chief Legal Officer,a nd General Counsel and Secretary