New Draft of Settlement Statement

The Consumer Financial Protection Bureau released its second round of alternative prototypes of a settlement disclosure form to be used during closing to replace the current HUD-1 and Truth in Lending disclosure. 

Right now, anyone who applies for a mortgage gets two disclosures that contain basic information about the mortgage: the Truth in Lending form and the Good Faith Estimate.

Last month, the CFPB tested two prototypes for a disclosure of final loan terms and closing costs. They were both similar. This time around, the CFPB created a different format for this information which are much longer. The current disclosures can be viewed online and are two different formats in five page drafts called Mimosa and Sassafras are available on the CFPB website.

New TIL and GFE Form

The Consumer Financial Protection Bureau (CFPB) recently released its fifth version of the draft mortgage disclosure form comparing a fixed-rate loan and an adjustable-rate  loan.  The CFPB said it will test this version of the disclosure with consumers, and consumers are invited to  go to this page to enter comments on the proposed form:  ”Know Before You Owe".  It appears that  the Bureau will finalize this form which combines the Truth in Lending form and Good Faith Estimate form in the very near future.

The CFPB has indicated it will release the first draft of a revised HUD-1 before Thanksgiving.   The last revision to the HUD form, which was effective on January 1, 2010, completely changed the form from a 2 page form to a 3 page form and  is very unpopular in the industry.

Companies Now Required to Use Attorney When Answering Garnishments

On September 12, 2011, the Georgia Supreme Court adopted an informal State Bar of Georgia opinion stating that any non-lawyer who answers a garnishment in Georgia is engaging in the unauthorized practice of law.  This decision means that all companies must now use an attorney licensed in Georgia when answering a summons of garnishment.  If a company does not have in-house counsel, then it must engage outside counsel to review and prepare the answers to a summons of garnishment.  Any non-lawyer employee who answers on behalf of a company will effectively be engaging in the unauthorized practice of law, and the court may issue a default judgment against the company because the answer was not filed by a licensed attorney. 

Most Employers are Required to Display New NLRB Poster

The National Labor Relations Board (“NLRB”) recently issued a new rule requiring most private sector employees to post a notice (“Notice”)  informing employees of their rights under the National Labor Relations Act (“NLRA”).  Pursuant to the rule, which becomes effective on November 14, 2011, the Notice must contain specific language informing employees of their right to form, join, or assist a union; to bargain collectively; to join in other concerted activities; and to refrain from such activities.

The rule states that the Notice must be 11-by-17 inches in size, and it must be posted in all places where other employment-related notices are posted.  The Notice must be posted in English as well as a foreign language if the foreign language is spoken by 20% or more of the employer’s workforce (the NLRB will provide translations of the Notice in other languages).  Employers that typically post personnel rules and policies on an internet or intranet site should also post the Notice there, in addition to a physical posting. Employers are not required to distribute the posting by email, Twitter or other electronic means.  A copy of the Notice is available for download on the NLRB website at www.nlrb.gov. 

There is a chance that the rule will not go into effect on November 14, 2011 due to an increasing backlash against it.  Representative Scott DesJarlais of Tennessee recently introduced House Bill 2854 seeking to repeal the rule.  Additionally, the National Association of Manufacturers has filed a lawsuit against the NLRB in the federal district court in Washington, DC in an attempt to block the rule.   Due to these recent developments, we recommend that employers be prepared to post the Notice but refrain from posting it until the November 14, 2011 deadline in the event that the rule is successfully challenged.  

AJC Reports Foreclosure Plummet

Foreclosures in Atlanta fell to their lowest point in more than two and a half years in September, the latest low point in a trend that has seen figures yo-yo 25 percent or more from month to month.

The Atlanta Journal Constitution reports that loan servicers have slowed foreclosures because home prices are weak and inventory is high and because servicers are working harder with borrowers to keep people out of foreclosure by restructuring loans.

But has the market bottomed out or is this just additional volatility in a difficult time?

The truth is no one knows but we can only hope that this is the beginning of a trend.