Gramm-Leach-Bliley is an Act of Congress that strengthens consumer privacy. Its requirements force lenders to hold borrower personal information as sacred and not share it unnecessarily with other parties. Among the protections it offers consumers of loans and other financial products are:
- Your lender must disclose to your any intent to share your private information with another party
- You have a right to direct your lender not to share your personal information
- A lender may not share account numbers and similar information to other parties for marketing purposes
In addition, your lender must provide you with a written policy of its privacy protection practices annually. This written statement should address the lender’s policy regarding disclosures of personal information with third parties, disclosures of personal information of people who are no longer customers of the institution, and how the lender protects consumer information. Your lender must keep you informed of which types of third parties may gain access to your personal information, the categories of personal information it may share with such parties, and the lender’s policies for protecting your information.
Failure to comply with the Gramm-Leach-Bliley Act could lead to stiff penalties for your lender. A mortgage document review can determine if your lender is in violation of the Act.
Under the Real Estate Settlement Procedures Act (RESPA) Regulation X, a lender is required to provide a borrower a special information booklet not later than three business days after the mortgage application is received or prepared. The booklet may be mailed or delivered in person, but it must be sent during the time frame. There are two exceptions to this rule:
- If a borrower is using a mortgage broker then the mortgage broker must give the booklet to the borrower;
- If the borrower is turned down for a loan during the time frame then the booklet is not required.
The special information booklet contains important consumer information regarding a variety of real estate settlement services. While there is no explicit penalty for failure to provide the booklet, bank regulators have been known to impose fines and penalties for not providing the special information booklet. If your client did not receive the booklet during the time frame then you can register a complaint under RESPA law at
Director, Office of RESPA and Interstate Land Sales
US Department of Housing and Urban Development
Room 9154
451 7th Street, SW
Washington, DC 20410
Learn more about RESPA violations and loan audits from U.S. Lender Audit.
You know your sick and tired of your mortgage company sending you threatening letters. Now it’s time to do something about it. The latest statistics show that 83% of all mortgages have violations in them. And you might be wondering, “What’s a violation and what does it mean?”
Essentially, it means your mortgage company broke a law. There are case laws that offer specific requirements for mortgage companies to follow and if they don’t follow those requirements then there are penalties. In some cases your mortgage company could be required to refund you some of your money. Here’s what you do:
- Hire an attorney that specializes in loan modifications
- Have your attorney order a mortgage document review
- After your review reveals violations to any applicable state, federal, or local laws, authorize your attorney to meet with your mortgage company to negotiate a loan modification
Pretty simple, right?
It is simple, but there are complex laws that require certain documentation of your mortgage company. The mortgage document review is the one tool that can show any violations, giving you the evidence you need to win in court and/or seek a more fair and equitable mortgage agreement. A qualified attorney can help, but you’ll need the document review to be your leverage.
As an attorney working in the loan modification issue and helping homeowners achieve a fair and equitable loan settlement, you’ve got to be familiar with applicable local, state, and federal case law. As you know, many times precedent rules. But precedent is based on written law. And when it comes to written law, there are plenty of applicable Acts, Statutes, and other legislation to help you get the best settlement for your client.
- TILA - Truth in Lending Act. Passed in 1968. Designed to help protect consumers who fall victim to predatory lending practices and requires certain disclosures for any loan or mortgage company to issue to potential borrowers with stringent timelines.
- RESPA - Real Estate Settlement Procedures Act. Protects consumers of HUD financing and requires certain disclosures and prohibits kickbacks for loan services.
- HOEPA - Home Ownership And Equity Protection Act. Passed in 1994. Amends TILA. Requires further disclosures with stringent timelines when a consumer is applying for a high rate, high interest loan. Designed to protect consumers who borrow against their home equity.
- ECOA - Equal Credit Opportunity Act. Designed to protect minorities from discrimination practices in lending.
- Gramm-Leach-Bliley Act - Passed in 1999. Also known as Financial Services Modernization Act. Restricts information lending institutions can hold on its customers and strengthens consumer privacy.
- State And Local Laws - Many states and local governments have their own laws that are even stricter than federal law. If you practice law in those states then you should be familiar with applicable local laws and know how to use them to protect your clients.
If you are working on a loan settlement case then you’ll need evidence to act as negotiation leverage. The best tool to gain that leverage is a forensic loan audit.