For more than a decade, Countrywide Financial’s “VIP Program” approved nearly 18,000 sweet-heart mortgages to congressmen, policymakers and officials at the government-sponsored enterprises in an effort to curry favor in Washington and strengthen its business relationship with Fannie Mae, ac-cording to a newly released congressional inquiry. Last week’s 136-page report from House Oversight and Government Reform Committee Chair-man Darrell Issa, R-CA, completed a three-year investigation by the committee of Countrywide’s “Friends of Angelo” program, which ran from January ...

Consumers who take out mortgages that are considered high cost currently receive special pro-tections from fees and risky loan terms. The Consumer Financial Protection Bureau this week came out with a proposed rule that would expand what is considered a high]cost mortgage and provide more protections to consumers who take out those loans. Loans that meet high-cost triggers under the Home Ownership and Equity Protection Act are subject to special disclosure requirements and restrictions on loan terms, and borrowers in high-cost mortgages have enhanced remedies ...

As Inside Regulatory Strategies was going to press this week, the Consumer Financial Protection Bureau was releasing a detailed proposed rule to integrate the mortgage disclosures consumers are entitled to under the Real Estate Settlement Procedures Act and the Truth in Lending Act. The proposal is accompanied by new “loan estimate” and “closing disclosure” forms to present the costs and risks of the loan in clearer terms. “The forms benefit consumers by using plain language and a format that will help them understand their loans,” the CFPB said...

The Consumer Financial Protection Bureau last week issued a final rule to codify protections for privileged information submitted by financial institutions. The rule makes clear that an institution that provides privileged information to the CFPB does not waive any privilege it may have related to third parties, affirming what the agency said in January to the financial institutions under its supervisory authority. It also makes clear that bureau sharing of privileged information to another federal or state government agency does not waive any privilege that might apply...

Three jurisdictions in California are raising a lot of industry hackles over a plan that could lead to the use of eminent domain to seize currently performing underwater mortgages and force a restructuring of their terms. It’s a plan “more like Grand Theft Mortgage than a silver bullet” for the region’s housing woes, according to former Fannie Mae executive Edward Pinto. At issue is a resolution adopted last week by California’s San Bernardino county and the cities of Ontario and Fontana in which the jurisdictions entered into a joint powers agreement. Under the resolution...

House Oversight and Government Reform Committee Chairman Darrell Issa, R-CA, released a report last week that took another look at Countrywide Financial’s “Friends of Angelo” and “VIP Program,” concluding that Countrywide used the latter to lobby policymakers as well as to strengthen its relationship with Fannie Mae. According to the report, Countrywide reached an exclusive agreement with Fannie in 1999 to sell the government-sponsored enterprise billions of dollars in mortgages at a discounted rate. “The agreement led to a period of codependence and mutual growth,” the report noted...

The Basel III capital standards regime proposed last month by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. could give nonbank mortgage companies a boost at the expense of their bank competitors, according to analysts at Keefe Bruyette & Woods. “The downturn in the mortgage market wiped out most nonbank mortgage lenders, and most mortgage origination and servicing moved into the banking system. Since 2009, nonbanks have started to increase their presence in mortgage banking. We believe that Basel III could further...

Federal banking regulators and private-sector mortgage servicers have gradually stepped up their efforts to reach out to eligible borrowers facing foreclosure and have taken steps to improve their communication materials. However, they have not undertaken certain “best practices” such as conducting readability tests or using focus groups that might have maximized their potential outreach, the Government Accountability Office said in a new report. “Staff at the Board of Governors of the Federal Reserve System said that this was, in part, a trade off to expedite the remediation...

Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, successfully attached an amendment to H.R. 5972, the Department of Housing and Urban Development Appropriations Act, 2013. Garrett’s amendment would gut the disparate impact rule proposed by HUD last September by prohibiting the agency from using any of the agency’s funding to “promulgate, issue, establish, implement, administer, finalize, or enforce” the rule. The congressman’s amendment has strong support from the mortgage...

The Supreme Court of the United States surprised many industry and legal observers late last month by deciding it would not take on a key dispute under the Real Estate Settlement Procedures Act. “The writ of certiorari is dismissed as improvidently granted,” the high court said in a terse announcement. At issue in First American Financial v. Edwards is whether someone who has not suffered any actual damages from alleged RESPA violations has the legal standing to sue in federal court. The SCOTUS decision to not rule on the case, after deciding a year ago to take it on, means the...