K&L Gates’ Mortgage Banking and Consumer Financial Products group provides a comprehensive range of transactional, regulatory compliance, enforcement and litigation services to the lending and settlement service industry.  Our focus includes first- and subordinate-lien, open- and closed-end residential mortgage loans, as well as multi-family and commercial mortgage loans.  We also handle direct and indirect automobile, and manufactured housing finance relationships.  In addition, we handle unsecured consumer and commercial lending.  In all areas, our practice includes traditional and E-commerce applications of current law governing the fields of mortgage banking and consumer finance.

Our clients include mortgage lenders and brokers, depository institutions, consumer finance companies, investment bankers, insurance companies and agents, real estate brokers, broker-dealers, technology companies, home builders, landlords, venture capital funds, hedge funds, relocation services, rating agencies, and document preparation companies.

Our Washington, DC presence enhances our ability to represent clients before the Department of Housing and Urban Development (“HUD-FHA”), Department of Veterans Affairs (“VA”), Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal Reserve Board (“FRB”), Office of Comptroller of the Currency (“OCC”), Office of Thrift Supervision (“OTS”), Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”).  Our close proximity to these agencies and authorities is particularly useful in our efforts to obtain agency approval of proposed business plans, defend against administrative enforcement actions and keep abreast of and help shape new regulatory requirements affecting the mortgage banking and consumer finance industry.  Our areas of concentration are discussed below.

We assist clients in such areas as:

• Mortgage Banking
  • Transactional
  • Regulatory Compliance
  • Enforcement and Litigation
• Consumer Finance
  • Transactional
  • Regulatory Compliance
  • Enforcement

Mortgage Banking
Transactional
K&L Gates lawyers handle a wide variety of transactions ranging from simple purchases and sales of mortgage servicing rights or whole loans to complex purchases and sales of entire companies.  Our transactional work includes:

• Performing comprehensive due diligence reviews.
  
  
• Structuring, negotiating and drafting mergers and acquisition agreements for mortgage, mortgage-related and consumer finance companies in both asset and stock transactions.
  
  
• Drafting purchase and sale agreements for residential, multi-family and commercial mortgage loans, consumer loans and receivables on a broker, correspondent and wholesale basis, and for servicing rights on a flow, assignment of trade, concurrent funding and bulk basis.
  
  
• Creating term loan, revolving credit and commercial real estate loan agreements.
  
  
• Negotiating and drafting pooling and servicing agreements, sub servicing agreements, data processing and service bureau agreements, software licensing agreements, contract processing and underwriting agreements, affinity and marketing agreements, and other operating agreements and seller/servicer guides.
  
  
• Negotiating and drafting joint venture agreements between providers of real estate settlement services, such as real estate brokers, mortgage brokers and mortgage lenders.
  

Regulatory Compliance
State and federal regulatory compliance is an integral part of our practice.  With respect to federal compliance issues, K&L Gates lawyers have worked at HUD and the Federal Reserve Board, and are fully conversant in the Real Estate Settlement Procedures Act (“RESPA”), Truth in Lending Act (“TILA”), Home Ownership and Equity Protection Act (“HOEPA”), Fair Housing Act, Equal Credit Opportunity Act, Fair Credit Reporting Act and Home Mortgage Disclosure Act.  Our U.S. state law practice includes researching and analyzing mortgage banking, real property, consumer protection and consumer finance laws in all 50 states and the District of Columbia.  In the area of federal approvals and multi-state licenses, we rely on regulatory compliance analysts with many years of industry experience to obtain and maintain all necessary federal and state licenses and approvals in a cost-efficient manner.

We provide a full range of regulatory compliance services, including:

• Producing multi-state surveys and analyses regarding state licensing obligations to engage in mortgage finance and consumer credit-related activities, including the making, brokering, acquiring, selling, or servicing of loans, whether secured by residential real estate, commercial real estate, personal property, or are unsecured.
  
  
• Obtaining and maintaining approvals by HUD/FHA, VA, Fannie Mae, Freddie Mac, or GNMA.
  
  
• Obtaining and maintaining state licenses to engage in mortgage finance or consumer credit finance activities in all states, the District of Columbia, or certain territories.
  
  
• Producing multi-state surveys on state and federal laws impacting the origination, servicing and sale of mortgage loan products.
  
  
• Drafting multi-state mortgage loan documents and disclosure forms.
  
  
• Preparing summary charts analyzing permissible origination and servicing fees for first- and subordinate-lien mortgage loans.
  
  
• Providing regulatory counseling and legal opinions on issues affecting the origination, servicing, acquisition, and sale of first- and subordinate-lien mortgage loans.
  
  
• Analyzing state laws to determine the extent and conditions under which liability attaches to an assignee of loans in the secondary market.
  
  
• Conducting bank and non-bank compliance program reviews.
  
  
• Offering strategic advice to bank and non-bank mortgage originators.
  
  
• Providing counsel and advise to national banks and their operating subsidiaries, federally chartered savings associations and their operating subsidiaries, state chartered banks, and state-chartered industrial loan corporations or industrial banks as to compliance with federal and state mortgage finance laws and the extent to which one or more preemption doctrines or statutes are available to the institution to assert preemption from the state requirements.

Our lawyers understand the interplay between state and federal law, and routinely counsel clients on federal preemption and related issues. We also analyze policies and procedures for compliance with applicable federal and state laws, prepare industry comment letters on proposed regulations, conduct in-house training seminars, and design and evaluate quality control systems.  In addition, we assist companies with implementing the latest federal and state laws and regulations, including financial privacy, private mortgage insurance requirements, state anti-predatory lending laws.  Internet lending also is a significant part of our practice, and we advise clients on a wide variety of compliance issues unique to on-line operations.

Enforcement and Litigation
In enforcement matters, K&L Gates offers both general and case-by-case counseling services to assist clients in avoiding and defending administrative and other governmental proceedings.  We help clients avoid enforcement actions by providing general advice and counseling, and by performing due diligence and quality control reviews. We also represent consumer finance lenders and purchasers of retail installment sales contracts in connection with government audits, state examinations, and consumer matters forwarded for response by state regulators and state attorneys general.

We also defend clients in a wide range of enforcement proceedings, including:

• FHA/VA/GNMA audits, examinations, administrative proceedings and Inspector General investigations, consisting of claims for indemnification, civil money penalties and withdrawals of governmental approval (including suspensions, debarments and probations).
  
  
• Investigations, administrative proceedings and lawsuits initiated by state banking authorities and attorneys general involving alleged violations of HOEPA, RESPA, state and federal fair lending laws and other state and federal consumer credit laws.
  
  
• HUD investigations and proceedings involving alleged Fair Housing Act and RESPA violations.
  
  
• DOJ investigations involving alleged fair lending and False Claims Act violations.
  
  
• FTC investigations involving alleged violations of federal fair lending laws, the Federal Trade Commission Act, HOEPA and other federal consumer credit laws.
  
  
• Federal and state banking agency proceedings involving TILA reimbursement orders and alleged fair lending violations.
  
  
• Investor repurchase demands and seller/servicer revocation proceedings.

In litigation matters, we defend mortgage lenders and other financial institutions in individual and consumer class actions involving, among other matters, fair lending laws, TILA, HOEPA, RESPA, escrow administration, force-place insurance, private mortgage insurance, “junk” fees, breach of contract matters, state consumer protection laws and mortgage broker issues.

Consumer Finance
Transactional
Our consumer finance practice encompasses a wide variety of transactional work, ranging from facilitating single unit sales finance transactions to structuring complete retail and wholesale finance programs for dealer finance sources.  Our work in this area includes:

• Creating and documenting wholesale finance (“floor plan”) relationships between finance sources and automobile, recreational vehicle, titled vessel and manufactured housing dealers.
  
  
• Drafting and negotiating dealer lines of credit to facilitate combined inventory and premises finance for automobile, marine, recreational vehicle and manufactured housing dealers.
  
  
• Structuring purchase and sale agreements for retail automobile, titled vessel, manufactured housing and recreational vehicle installment sales contracts.
  
  
• Developing continuous buy/sell agreements for the purchase of automobile, recreational vehicle, titled marine and manufactured housing retail installment sales contracts.
  
  
• Conducting due diligence reviews of prime and sub-prime consumer direct loan and retail installment sales portfolios and companies.
  
  
• Drafting and negotiating portfolio purchase agreements for prime and sub-prime consumer direct loan and retail installment sales portfolios and companies.
  
  
• Drafting and negotiating servicing, data processing, service bureau and affinity marketing agreements for consumer goods finance clients.

Regulatory Compliance
State and federal regulatory compliance is an integral part of our practice.  With respect to federal compliance issues, our lawyers are fully conversant in the Truth in Lending Act (“TILA”), the Equal Credit Opportunity Act (“ECOA”), the Fair Credit Reporting Act (“FCRA”) and the Fair Debt Collection Practices Act (“FDCPA”).  Our state law practice includes researching and analyzing direct lending, retail installment sales, motor vehicle retail installment sales, manufactured housing, and consumer protection laws in all 50 states and the District of Columbia.  In the area of federal approvals and multi-state licenses, we rely on regulatory compliance analysts with significant experience in the banking and financial services industry to obtain and maintain all necessary federal and state licenses and approvals in a cost-efficient manner.

We provide a full range of compliance-related services, including:

• Drafting multi-state direct loan and retail installment sales contracts for automobile, recreational vehicle, titled vessel and manufactured housing sale transactions, including federal and state disclosure forms.
  
  
• Drafting multi-state consumer automobile lease contracts, including federal and state disclosure forms.
  
  
• Conducting multi-state surveys of direct and indirect consumer finance laws, including retail installment sales acts and motor vehicle retail installment sales acts.
  
  
• Assisting companies to implement new federal and state laws, regulations and rules impacting direct and indirect consumer lending and consumer motor vehicle leasing.
  
  
• Analyzing existing company policies and procedures to determine compliance with federal and state laws, regulations and rules.
  
  
• Drafting company policies and procedures for direct and indirect automobile, recreational vehicle, and manufactured housing finance.
  
  
• Reviewing consumer finance marketing materials for compliance with state and federal law, including the federal Truth in Lending Act and state unfair and deceptive trade practices acts.
  
  
• Obtaining all necessary federal and state licenses and approvals for the making and/or purchase of consumer direct and indirect loan agreements.
  
  
• Conducting in-house training seminars at consumer finance institutions concerning federal and state compliance issues.

Enforcement
In enforcement matters, we offer both general and case-by-case counseling services to assist clients in avoiding and defending administrative and other governmental proceedings.  We help clients avoid enforcement actions by providing general advice and counseling, and by performing due diligence and quality control reviews. We also represent consumer finance lenders and purchasers of retail installment sales contracts in connection with government audits, state examinations, and consumer matters forwarded for response by state regulators and state attorneys general