California is about to become the first state to enact into law a large portion of the national mortgage servicing settlement that state and federal government officials negotiated this year with the nation’s top five banks and apply it to all lenders. The state legislature passed the Homeowner Bill of Rights last week (AB 278/SB 900). The Democrat-controlled state Assembly approved the bill on a 53-25 vote, with the Senate endorsing the measure 25-13. The legislation will force large lenders to provide a single point of contact, eliminate dual tracking and impose significant civil...

California. Former IndyMac CEO Michael Perry and CFO Scott Keys agreed to a $6.5 million settlement to resolve a class-action lawsuit by shareholders who accused the executives of concealing how badly the mortgage lender’s financial position had deteriorated when they were buying company stock from March 1, 2007, to May 12, 2008. A shareholder’s motion for preliminary approval submitted last week said the pending settlement is “a reasonable resolution” of the dispute and ensures that shareholders will at least make some financial recovery. Florida. In Fuller v. MERS, U.S. District...

House of Representatives.Hearing on Impact of Dodd-Frank. The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises plans a hearing Tuesday, July 10, on the impact of the Dodd-Frank Act on customers, credit and job creators. The witness list includes the American Securitization Forum and the Securities Industry and Financial Markets Association.House of Representatives.Hearing on Impact of Dodd-Frank on Financial Services Competition...

Twenty-five states are thinking about revising their foreclosure laws to make it harder for lenders to seize properties, out of concern that inefficient loan modifications are leading to unnecessary foreclosures, the Wall Street Journal reported last week. That would prove costly for borrowers in the future, according to Mortgage Bankers Association CEO David Stevens. Should all 50 states decide to go down their own path, lenders are going to have multiple processes, each with their own little nuances, and every single penny of that cost will be borne by tomorrow's borrowers...

New issuance of residential MBS slipped modestly during the second quarter of 2012 despite a strong start in the securitization of deeply underwater Fannie Mae and Freddie Mac mortgages. A total of $378.04 billion of single-family MBS were issued during the second quarter, down 3.4 percent from the first three months of 2012, according to a new Inside MBS & ABS analysis. On a year-to-date basis, the market was still 30.5 percent ahead of issuance during the first half of 2011. The second quarter ended on a strong note. Total MBS production increased 12.5 percent from May to June, including a pickup in...

Credit Suisse last week issued its second non-agency MBS backed by prime jumbo loans, structuring slightly higher credit-enhancement levels than those seen on Redwood Trust jumbo deals. As was the case with its first jumbo MBS of 2012, the new Credit Suisse transaction (CSMC Trust 2012-CIM2) is backed largely by loans from the investment portfolio of MetLife Home Loans, which shut down its primary market originations activity early this year. The insurance company will continue to provide reps and warranty guaranties on MetLife loans, which accounted for 85.2 percent of the $425.1 million mortgage...

Representatives of the mortgage lending and securitization sectors are deeply concerned about and strongly opposed to a move in California that would use eminent domain to seize current non-agency mortgage loans and force their terms to be modified to ensure the affected homeowners can stay in their homes. The California county of San Bernardino and the cities of Ontario and Fontana have proposed to create a “joint powers authority to assist in preserving home ownership and occupancy for homeowners with negative equity within the parties’ jurisdictions,” according to a resolution adopted by the...

In response to the Federal Housing Finance Agency’s request for comments on its recent strate-gic plan, the American Securitization Forum put out a white paper this week spelling out the mechanics and potential benefits of a blueprint to transition to a single agency security that could be issued by Fannie Mae and Freddie Mac. “Implemented correctly, a single agency security could benefit all participants in the mortgage market, including borrowers, originators, investors and the taxpayer,” said ASF Executive Director Tom Deutsch. Current trading markets for Fannie MBS and Freddie PCs are...

Nationstar Mortgage LLC last week finalized its acquisition of more than $63.7 billion worth of servicing assets from Aurora Bank.Aurora Bank, a subsidiary of Lehman Brothers, has been carved up to repay creditors of the bankrupt Wall Street firm that was a major player in the non-agency MBS market. Ocwen Financial had earlier purchased $1.8 billion in commercial servicing rights from Aurora. The Aurora mortgage servicing portfolio is comprised of 75 percent non-conforming loans in non-agency MBS and 25 percent conforming loans in Fannie Mae and Freddie Mac pools, according to...

A New York state appeals court last week upheld a lower court ruling which dismissed an investor group’s attempt to overturn Bank of America’s proposed $8.5 billion MBS settlement. The five-judge panel of New York’s First Department Appellate Division affirmed Judge Barbara Kapnick’s March 28 decision to dismiss the complaint brought by Walnut Place LLC and related entities. Walnut Place, which represents investors that bought about $1.4 billion of Countrywide non-agency MBS, filed suit in February 2011 claiming Countrywide made false representations on nearly 66 percent of the 2,166 mortgage...