Legal Issues

Browse articles from all of our Newsletters related to Legal Issues.

January 20, 2017 - Inside MBS & ABS

Former Jeffries Group Bond Trader Faces Another Trial on MBS Fraud

After a two-year rollercoaster ride through the court system that ended in 2015, a former Wall Street trader finds himself facing another trial in an MBS fraud case. Jess Litvak, a former bond trader with the Jeffries Group, will go on trial again after a jury found him guilty in 2014 of violating securities laws. He was accused of fraud and misleading investors about the price he had paid for residential MBS. According to attorneys with the law firm of Shepherd Smith Edwards & Kantas in Houston, the U.S. Attorney’s Office in Connecticut originally brought...

January 20, 2017 - Inside MBS & ABS

GSE Shareholder Case Outlook, Will the Trump Administration Make a Difference?

As a number of shareholder lawsuits against Fannie Mae and Freddie Mac hang in the balance, a new administration offers reasons for some to be optimistic on the cases coming to a close and the Treasury’s sweep of the government-sponsored enterprises’ profits coming to an end. During a Jan. 18 call hosted by Investors Unite, legal experts weighed in on the outlook for GSE shareholder cases just days before the inauguration. Plaintiffs have been arguing that a government bailout of the GSEs and the subsequent Treasury sweep was unnecessary and illegal. “As GSE shareholders, we are...

January 20, 2017 - Inside MBS & ABS

Moody’s Settles Pre-Crisis Rating Charges for $864 Million; SEC Cites Rating Services for More Recent Problems

Moody’s Investors Service agreed to a $863.79 million settlement with the Department of Justice, 21 states and Washington, DC, late last week. The settlement focused on rating activities between 2004 and 2010 involving residential MBS and collateralized debt obligations. According to the settlement, Moody’s used an internal ratings model for most tranches of certain residential MBS that was more lenient than its published guidelines, allowing for lower credit enhancement levels than what the published guidelines required. The internal model was based...

January 19, 2017 - Inside Mortgage Finance

PHH Corp. Convinces Appeals Court to Let It Respond to Government’s Brief in CFPB Dispute

The U.S. Court of Appeals for the District of Columbia Circuit last week gave PHH Corp. the green light to weigh in on the legal arguments the Justice Department made late last year in support of the Consumer Financial Protection Bureau’s petition for an en banc rehearing of its dispute with the lender. The appeals court did so over the objections of the CFPB, and with 11 of the 12 judges in agreement and one not participating. PHH had argued that it ought to be able to respond to the second of two government arguments in favor of the review. Privately, some industry insiders thought...

January 19, 2017 - Inside Mortgage Finance

Trump Eyes Neugebauer to Replace CFPB’s Cordray, Legal Experts Divided as to Extent of His Authority

What once seemed like an idle speculation – the potential ouster of Richard Cordray as director of the Consumer Financial Protection Bureau – suddenly looks more likely. Last week, President-elect Donald Trump met with Randy Neugebauer, the former Texas Republican member of the House Financial Services Committee, who is under consideration as a replacement for Cordray, according to multiple press accounts. Neugebauer reportedly has not been offered the job, as of press time, nor have other candidates been considered for the position. “I heard...

January 16, 2017 - Inside the CFPB

Other News in Brief

Trump Administration Staffs up Bureau ‘Landing Team.’ The transition team of the incoming administration of President-elect Trump recently announced the members of its CFPB “landing team,” one of whom is Paul Atkins, currently CEO of Patomak Global Partners, a consulting firm. Atkins is a former commissioner at the Securities and Exchange Commission.... House, Senate Re-tool for 115th Congress. Congressional leaders have updated their committee and subcommittee leadership assignments for a new Congress that promises to put more heat than ever on the CFPB, now that a Republican will occupy the White House for the first time since the passage of the Dodd-Frank Act and the establishment of the bureau....

January 16, 2017 - Inside the CFPB

Justice Dept. Settles Redlining Allegations With Two Ohio Banks

The U.S. Department of Justice recently reached a settlement with two jointly owned but independently operated banks in Ohio, Union Savings Bank and Guardian Savings Bank, resolving allegations that the pair engaged in a pattern or practice of redlining predominantly African-American neighborhoods in and around the Ohio cities of Cincinnati, Columbus and Dayton, as well as in Indianapolis. According to the government’s complaint, Union (with $2.7 billion in assets and 29 branches) and Guardian (with $861 million in assets and 11 branches) violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The Justice Department alleges that, from at least 2010 ...

January 16, 2017 - Inside the CFPB

HSBC Slammed With $33 Million Fine Over Flawed Foreclosures

The Office of the Comptroller of the Currency recently fined HSBC $32.5 million for failure to correct faulty foreclosure practices in a timely manner as per a consent order originally issued back in 2011 to correct practices that harmed borrowers in the wake of the housing market’s collapse. The OCC also said the institution failed to file payment change notices (PCN) that complied with bankruptcy rules, which resulted in roughly $3.5 million in borrower remediation for approximately 1,700 mortgage loan accounts. “The bank’s untimely and missed PCN filing practices did not comply with bankruptcy rules, required the bank to undertake operational enhancements to achieve compliance, and were unsafe and unsound practices,” according to the consent order. The bank neither admitted ...

January 16, 2017 - Inside the CFPB

PHH Corp. May Have an Ally In Case Against CFPB

While many in the mortgage industry wait for the District of Columbia Circuit Court of Appeals to decide whether to rehear the arguments of the CFPB in its wrangling with PHH, the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew, et al. have stepped back onto the legal stage at the district court level. Specifically, “Plaintiffs respectfully move [the U.S. District Court for the District of Columbia] to hold a status conference at its earliest convenience to determine how this case ... can be most efficiently adjudicated in light of the CFPB’s petition for en banc review of the panel decision in PHH Corp. v. CFPB,” State National Bank and its parties asked the appeals ...

January 16, 2017 - Inside the CFPB

Appeals Court Grants PHH’s Request to Respond to USSG

Late last week, the District of Columbia Court of Appeals disregarded the objections of the CFPB and gave PHH Corp. permission to respond to the federal government’s arguments in support of en banc review of the court’s earlier three-judge panel decision.“Upon consideration of petitioners’ motion for leave to file a supplemental response to petition for rehearing en banc, the opposition thereto, and the reply, it is ordered that the motion be granted,” 11 of the 12 judges wrote in an order issued Jan. 13. PHH’s supplemental response is due Jan. 27, 2017, and is not to exceed 15 pages. Back in October, the three Republican appointees ruled that the CFPB’s leadership structure involving a single director who can be ...

January 16, 2017 - Inside the CFPB

CFPB Defenders Urge Trump White House to Keep Cordray at Helm

With the inauguration of Donald Trump as the 45th president of the United States now just days away, anxiety among defenders of the CFPB that its director, Richard Cordray, may be booted is intensifying, prompting some of his more vocal supporters to make impassioned public pleas to defend him and preserve the agency he heads. Up on Capitol Hill, Democrats on the House Financial Services Committee urged the new president to “reject the Wall Street agenda” and not remove Cordray from his post. “Any attempts to remove Director Cordray from his position are without historical precedent, and intended solely to distract the director and the bureau from its important work protecting servicemembers, students and other borrowers from financial predation,” the ...

January 13, 2017 - Inside MBS & ABS

Judge OKs BofA Settlement; SEC to Resubmit Payout Plan; Court Affirms Dismissal of Repurchase Claims

Judge William Pauley of the U.S. District Court for the Southern District of New York has approved a $335 million settlement by Bank of America with three pension funds and other investors to resolve a securities class-action against the bank. The settlement is one of the largest class-action settlements of securities-purchase claims arising from the financial crisis, according to the Pennsylvania Public School Employees’ Retirement System (PSERS), the court appointed lead plaintiff in the six-year old case. Other investors include...

January 6, 2017 - Inside FHA/VA Lending

Around the Industry

VA Extends Making Home Affordable Program. The Department of Veterans Affairs has extended the Making Home Affordable program to Oct. 1, 2017. The program was set to expire on Jan. 1, 2017. USDA Approves NewFed Mortgage to originate Section 52 Guaranteed Rural Housing Loans. The U.S. Department of Agriculture has approved NewFed Mortgage Corp., a multi-state residential mortgage lender, to originate USDA loans. Based in Danvers, MA, retailer NewFed offers FHA, VA, USDA, conventional and jumbo mortgage products. Reviews Genworth Financial’s Proposed Sale to Chinese Conglomerate. Fannie Mae has approved Arch Capital’s acquisition of ...

January 6, 2017 - Inside FHA/VA Lending

Michigan Lender Agrees to Pay $48 Million to Resolve FCA Claims

United Shore Financial Services of Troy, MI, has agreed to pay $48 million to resolve allegations of FHA-related fraud, adding to the more than $7 billion in settlements and judgments the Department of Justice has collected since 2009. United Shore, parent company of United Wholesale Mortgage and Shore Mortgage, was accused of improperly originating mortgages and falsely certifying compliance with FHA requirements. Originated between Jan. 1, 2006, and Dec. 31, 2011, the loans eventually turned bad, resulting in significant losses to the FHA insurance fund. The complaint did not specify the number and total amount of the bad loans United Shore originated or the size of FHA’s losses on those loans. United Shore was charged with violation of the False Claims Act, becoming the latest financial institution to join a growing list of FHA lenders that have opted to settle, rather than litigate, ...

January 6, 2017 - Inside FHA/VA Lending

Carson’s Inexperience Front and Center in Confirmation Hearing

The lack of experience in housing and mortgage financing matters could become a sticking point with Dr. Ben Carson, President-elect Donald Trump’s nominee for Housing and Urban Development secretary, during his Senate confirmation hearing on Jan. 12, according to stakeholders. “Democrats, in particular, will want to know his credentials and positions on various housing and enforcement issues,” said an industry observer. “There is doubt whether Carson can address such questions positively and specifically. ‘Living for a while in public housing’ is not a qualification to run HUD or oversee FHA for that matter.” However, Trump’s selection of Carson and other conservatives for cabinet positions signals his intent to govern from the right – a complete reversal from the eight years under President Obama. Notwithstanding his lack of housing expertise, Carson is on the path to promote and ...

January 6, 2017 - Inside FHA/VA Lending

FHA to Implement Methodology for Finding, Classifying Loan Defects

The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...

January 5, 2017 - Inside Mortgage Finance

As Legal Briefs Fly, Separation-of-Powers Question Becomes Pivotal Issue in PHH’s Dispute With CFPB

PHH Corp., the Department of Justice and the Consumer Financial Protection Bureau have, in recent weeks, gone back and forth with the filing of briefs on multiple angles associated with the legal dispute the lender has had with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. However, it looks like the separation of powers under the U.S. Constitution will play a more decisive role in the outcome than will issues related to RESPA, according to some top legal observers. PHH and the DOJ both submitted responses to the District of Columbia Circuit Court of Appeals on Dec. 22, the deadline set by the court. The government is seeking an en banc review by the full appeals court of a ruling by a three-judge panel. In its brief, the mortgage lender said...

January 2, 2017 - Inside the CFPB

Other News in Brief

CFPB Again Moves Against Finance Company. Late last month, the CFPB took its second legal action against Military Credit Services, LLC, a Norfolk, VA-based finance company, accusing the company of making loans with improper disclosures.... TransUnion Agrees to $19.4 Million Settlement. TransUnion, one of the largest credit reporting agencies in the U.S., has agreed to settle a dispute with the CFPB over the company’s practices related to the advertising, marketing and sale of consumer reports, credit scores or credit marketing products to consumers, the firm said in a recent Form 8-K filing with the Securities and Exchange Commission....

January 2, 2017 - Inside the CFPB

CFPB Fair Lending Priorities Include Redlining, Servicing

Mortgage-related issues will be a big component of the CFPB’s fair lending priorities for 2017, the bureau indicated in an online blog post late last year. Among the issues for the mortgage industry are redlining and servicing. “While the bureau has taken important strides in our efforts to protect consumers from credit discrimination and broaden access to credit, we continue to identify new and emerging fair lending risks and we will monitor institutions for compliance,” said Patrice Ficklin, associate director of the CFPB’s Office of Fair Lending. Going forward, then, the bureau is increasing its focus in three key areas, the first of which is redlining. “We will continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods,” ...

January 2, 2017 - Inside the CFPB

Banks, CUs Urge Changing CFPB to a Commission Structure

A handful of industry groups representing banks and credit unions wrote to Senate leaders recently, making the case for switching the leadership structure of the CFPB from a single director to a multi-member commission, which was how the bureau was initially envisioned by early advocates such as Elizabeth Warren, then an adviser to President Obama. In a letter to Senate Majority Leader Mitch McConnell, R-KY, and Minority Leader-elect Chuck Schumer, D-NY, the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federal Credit Unions urged lawmakers to pass legislation to create a five-person, bipartisan board to govern the bureau. “The CFPB is an independent regulatory agency that provides the sole ...

January 2, 2017 - Inside the CFPB

New Prez Has the Power to Can Cordray Now, Professor Claims

Numerous experts, commenters and observers are under the assumption that President-elect Trump will have to let the courts reach a definitive legal decision on the PHH Corp. v. CFPB litigation before deciding whether to remove CFPB Director Richard Cordray without cause. However, that’s not the case, according to Aditya Bamzai, associate professor of law at the University of Virginia School of Law. In a recent online blog post, Bamzai said the (sometimes unstated) premise in various articles and reports is that the CFPB’s pending challenge to the panel decision somehow prevents any attempt to oust Cordray. “Such a premise appears to rest on two mistaken assumptions: that the president cannot exercise his removal authority absent an Article III judgment authorizing ...

January 2, 2017 - Inside the CFPB

Trump Nominee Could Stymie CFPB Rulemaking, Pending the PHH Case

Depending on how the PHH Corp. v. CFPB case shakes out, the bureau’s rulemaking abilities will likely be severely challenged by the incoming administration of President-elect Donald Trump. In a recent client note, Barbara Mishkin, of counsel in the Philadelphia office of the Ballard Spahr law firm, pointed out how Trump’s selection of Rep. Mick Mulvaney, R-SC, as his nominee for director of the Office of Management and Budget (OMB) could become a major impediment for the bureau in its effort to crank out new regulations going forward. “Mr. Mulvaney has been described as a staunch deficit hawk and his nomination is viewed as sending a signal that federal regulations are likely to face tough scrutiny in a Trump administration,” ...

January 2, 2017 - Inside the CFPB

Key Constitutional Question Warrants Rehearing, DOJ Says

The important constitutional issue of separation of powers, and the perhaps somewhat unorthodox manner in which the three-judge panel of the District of Columbia Circuit Court of Appeals concluded that the CFPB’s leadership structure is unconstitutional, justify the court granting the bureau’s request for a rehearing en banc in its dispute with PHH Corp., the U.S. Justice Department told the court. “The conferral of broad policymaking and enforcement authority on a single person below the president, whom the president may not remove except for cause ... raises a significant constitutional question that the Supreme Court has not yet squarely confronted,” the DOJ said. To date, the nation’s highest court has sanctioned a limitation on the power to remove principal officers ...

January 2, 2017 - Inside the CFPB

PHH Says Panel Got it Right, No Need to Rehear En Banc

The long-running legal confrontation between PHH Corp. and the CFPB took another turn right before the holidays, with the nation’s eighth largest lender telling the District of Columbia Circuit Court of Appeals that its three-judge panel got it right in October when it ruled the CFPB’s leadership structure is unconstitutional. “The panel grounded its decision in existing Supreme Court precedent and other settled authority,” the company said. “It remedied a violation of the separation of powers by allowing the agency to continue to operate subject to basic constitutional constraints, without addressing the decision’s effect on past actions.” Further, “the panel interpreted the Real Estate Settlement Procedures Act according to its plain language and consistently with every other circuit to consider ...

December 22, 2016 - Inside The GSEs

With Mulvaney and Mnuchin, is a Deal with GSE Shareholders A Strong Possibility?

One of the most speculative stock bets out there – buying shares in Fannie Mae and Freddie Mac – is looking more like a sure thing these days, thanks to the recent pick of Mick Mulvaney, R-SC, to head the Office of Management and Budget in the new Trump administration. At least that’s how some industry officials and market watchers view it, including the Washington-based research firm Cowen & Co. In a report issued earlier this week, Cowen analyst Jaret Seiberg called the choice of Mulvaney for OMB chief “the most bullish sign yet that the Donald Trump administration will favor a solution to housing finance reform that includes a continued role for Fannie and Freddie.”

December 16, 2016 - Inside FHA/VA Lending

FL Court Finds HUD’s Face-to-Face Requirement a Vital Pre-Condition

A recent ruling by Florida’s Fifth Court of Appeal, if finalized, will affect any FHA foreclosure case that references the Department of Housing and Urban Development’s mandatory face-to-face interview with borrowers, according to industry attorneys. In Palma v. JPMorgan Chase Bank, Nat’l Ass’n, et al., the state appellate court found that HUD’s face-to-face interview requirement is “a condition precedent to foreclosure” for Florida mortgages that specifically incorporate the HUD regulation. Prior to the decision, no Florida appellate court has held that HUD’s requirement constitutes a condition precedent to foreclosure, according to attorneys with the Richmond, VA, law firm McGuireWoods. “Although this decision is not yet final and rehearing is likely, it has far-reaching impacts on the conditions and evidence required for foreclosure trials throughout Florida and is the ...

December 16, 2016 - Inside FHA/VA Lending

CFPB Slaps HECM Lenders with Combined Fines for Deceptive Ads

The Consumer Financial Protection Bureau has fined three reverse-mortgage lenders $790,000 in combined civil penalties to resolve charges of deceptive advertising to consumers. The bureau also ordered American Advisors Group (AAG), Reverse Mortgage Solutions (RMS) and Aegean Financial to stop the misleading ads and to implement compliance plans that include an advertising compliance policy. The misleading ads allegedly violate the federal Mortgage Acts and Practices – Advertising Rule (Regulation N) and the Dodd-Frank Act. AAG is the largest originator of FHA-insured reverse mortgages in 2016, with a 13.9 percent share of the HECM market. RMS third with a 4.11percent share, while Aegean, in 27th place, accounts for 0.48 percent. The three lenders allegedly ran ads that similarly misrepresented that a consumer with a reverse mortgage could not lose the ...

December 16, 2016 - Inside MBS & ABS

NY Court Rejects Credit Suisse’s Bid to Dismiss AG’s MBS Claims; Bond Trader Indicted for MBS Fraud

A New York appellate court this week denied Credit Suisse’s motion to dismiss claims made by NY Attorney General Eric Schneiderman in relation to the creation and sale of MBS to investors. In a majority decision, the New York Supreme Court held that the AG’s claims of securities fraud and persistent fraud or illegality are not time-barred, finding that the claims under the state Martin Act and Executive Law are governed by the six-year statute of limitations rather than the three-year limitations found in Section 214(2) of the state’s Civil Practice Law and Rules (CPLR). As of March 21, 2012, the parties entered...

December 12, 2016 - Inside the CFPB

Compliance Guidance Warns Lenders About Sales Incentives

In the wake of the Wells Fargo scandal involving the creation of unauthorized deposit and credit card accounts, the CFPB has issued a warning to lenders about the risks consumers face from improperly managed sales incentives. In CFPB Compliance Bulletin 2016-03, Detecting and Preventing Consumer Harm from Production Incentives, the bureau remarked, “The risks these incentives may pose to consumers are significant and both the intended and unintended effects of incentives can be complex, which makes this subject worthy of more careful attention by institutional leadership, compliance officers, and regulators alike.” For instance, “Such incentives may lead to outright violations of federal consumer financial law and other risks to the institution, such as public enforcement, supervisory actions, private litigation, reputational ...

December 12, 2016 - Inside the CFPB

Short-Term Bank Statement Loans May Lead Lenders Astray of ATR

Mortgage programs that use less than 24 months of bank statements to verify a borrower’s ability to repay back a loan are riskier than more traditional mortgages and may be prone to running afoul of the CFPB’s ATR rule, according to a new report from Moody’s Investors Service. “Although longer-term bank statement programs would likely satisfy the CFPB’s ATR rule, short-term programs may not,” analysts at Moody’s said. “To fully understand cashflow patterns typical of the borrower’s line of work, the longer the track record, the better,” they added. “The fewer statements a program requires, the higher the likelihood for inconsistencies in the calculation of available income from loan-to-loan.” Under the ATR rule, as Moody’s noted, the originator is required ...

December 12, 2016 - Inside the CFPB

TRID 2.0: The Comments: Clarifying Proposal Doesn’t Address Secondary Market Anxieties

The TRID 2.0 clarifying rulemaking proposal fails to alleviate most of the concerns that investors in the secondary mortgage market have about their potential legal liability, according to Pacific Investment Management Company. In its recent comment letter to the CFPB, PIMCO noted, “In most cases, the errors that relate to the [TRID] disclosures are subtle and technical in nature and do not result in corresponding consumer harm or confusion. Nevertheless, because the … rules implement provisions of the Truth in Lending Act that may carry actual or statutory damages and assignee liability to purchasers, there are serious concerns among secondary purchasers due to the rules’ expansion of liabilities in mortgage origination and investing.” Moreover, asset managers and other loan purchasers ...

December 12, 2016 - Inside the CFPB

CFPB Fines Reverse Mortgage Firms for Deceptive Advertising

The CFPB last week fined three reverse mortgage lending companies for allegedly deceptive advertisements, including claiming that consumers could not lose their homes. The CFPB ordered American Advisors Group (Orange, CA), Reverse Mortgage Solutions (Houston), and Aegean Financial (El Segundo, CA) to cease their allegedly deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay civil penalties. The bureau claimed that the companies ran ads that misrepresented that consumers could not lose their homes and that they would have the right to stay in their homes for the rest of their lives. The companies also were accused of falsely telling potential customers that they would have no monthly payments and that a reverse mortgage would ...

December 12, 2016 - Inside the CFPB

Democrat Lawmakers, Advocates File Briefs in Support of CFPB

Current and former Democrat members of Congress recently submitted a joint brief to the D.C. Circuit Court of Appeals in support of an en banc rehearing in the PHH Corp. v. CFPB case, including Dodd-Frank drafters and supporters, such as one of the bill’s namesakes, former Rep. Barney Frank, along with Sen. Elizabeth Warren, both from Massachusetts. The lawmakers argued that this case presents “a question of exceptional importance” and requires an en banc rehearing because the three-judge panel’s decision restructures the CFPB in a way that conflicts with Congress’s legislative plan. “By severing the for-cause removal provision, the panel decision fundamentally altered the CFPB’s structure in a way that is at odds with Congress’s design and will undermine the ...

December 12, 2016 - Inside the CFPB

PHH, Solicitor General to Respond to CFPB Appeals Court Directive

PHH Corp. has until Dec. 22, 2016, to respond to an order by the District of Columbia Circuit Court of Appeals related to its battle with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. The appeals court had directed the lender to reply to the bureau’s petition for an en banc rehearing of the recent ruling by a three-judge panel of the court. Back in October, the panel determined that two aspects of the CFPB’s structure – the dismissal of the director of the agency only for cause and the single directorship as opposed to a multi-member bipartisan commission – were unconstitutional. Additionally, the judges found in favor of the company’s arguments, among others, around the correct interpretations ...

December 9, 2016 - Inside The GSEs

Fair Housing Groups Accuse Fannie of Poor Foreclosure Maintenance

The National Fair Housing Alliance filed a housing discrimination lawsuit against Fannie Mae for allegedly not properly maintaining real estate-owned properties in 38 metropolitan areas with high proportions of African-Americans and Latinos.The lawsuit was filed this week in the federal district court in San Francisco. Fannie denies the allegations. According to the NFHA and 20 local fair housing groups across the country, Fannie purposely does not maintain its foreclosed properties in middle- and working-class minority neighborhoods to the same level of quality it does for foreclosures it owns in comparable white neighborhoods. Foreclosed properties in minority communities were littered with debris and trash, marked by graffiti...

December 9, 2016 - Inside MBS & ABS

ResCap Trust Sues More Lenders in Recovery Bid; Former S&P Executive Sued for Ratings Manipulation

ResCap Liquidating Trust last week filed two new lawsuits against lenders as it continued its efforts to recover losses due to bad loans purchased from correspondents that later forced the company into Chapter 11 bankruptcy. No other details were provided by defendant attorneys with American Mortgage Law Group, which warned that the Dec. 2 filings in Minnesota federal district court may trigger a second wave of litigation by the trust. AMLG said it has been helping a number of lenders with pre-litigation demands from the trust and has seen increased activity on that front. On Nov. 16, a federal judge dismissed...


HUD has announced a 25 basis point cut in FHA premiums, which is slated to take effect in late January. Is your lending shop for or against a cut in FHA premiums?

For. It should help lending volumes.
Against. The private MI sector should take on this risk, not the government.
Too early to say.
I believe the new White House may scuttle the idea so it doesn’t matter.

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