California. Gov. Jerry Brown, D, has signed into law the Homeowner Bill of Rights (AB 278/SB 900). The new law will force large lenders to provide a single point of contact, eliminate dual tracking and impose significant civil penalties for “robo-signed” documents, while permitting homeowners to sue to prevent foreclosure. This makes California the first state in the nation to statutorily implement a large section of the national mortgage servicing settlement reached earlier this year with the nation’s top...

In the proposed rule the Consumer Financial Protection Bureau released two weeks ago addressing various issues associated with high-cost mortgages, the bureau revealed the most detail yet regarding a National Mortgage Database that’s been in development for the past two years. A 2010 report by the Government Accountability Office indicated officials from the Federal Reserve and representatives of Freddie Mac were working on such a database on a pilot basis. “The officials are exploring the feasibility...

The regulatory workload required of the Consumer Financial Protection Bureau and other federal banking regulators is moving forward sporadically, with a number of proposals yet to be released before the January 2013 deadline imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The industry concern is that regulators will find themselves forced into a massive document dump at the end of the year, with mortgage lenders then having to scramble in dozens of directions at the same time in an attempt...

Judge Michael Simon of the U.S. District Court for the District of Oregon ruled that breach of contract claims brought by tens of thousands of homeowners may proceed in a nationwide class action alleging that Bank of America improperly force-placed high-premium flood insurance policies on homeowners across the country. In Arnett, et al. v. Bank of America, N.A., Civil Action No. 11-cv-1372, plaintiffs Ronda and Larry Arnett allege that Bank of America has a practice of force-placing flood insurance coverage above...

Mortgage lending representatives are asking federal banking regulators to stop using disparate impact analysis in fair lending cases, arguing that its use is based on unsupported legal theory, yet carries real consequences for banks and consumers that detract from legitimate fair lending efforts. Frank Keating, president and CEO of the American Bankers Association, said his members are strong advocates for fair lending and fully support enforcement against practices that intentionally discriminate. “However, disparate impact asserts fair lending violations occurred based only on...

Wells Fargo has agreed to a $175 million fair lending settlement with the U.S. Department of Justice, the Illinois Attorney General’s office and the Pennsylvania Human Relations Commission. The settlement provides $125 million in compensation for minority borrowers who were allegedly steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin. Wells will also provide $50 million in direct downpayment assistance to borrowers in communities around...

Mortgage lending and servicing industry representatives were able to get an advanced look at what the Consumer Financial Protection Bureau is considering imposing on the mortgage servicing sector, and that glimpse has generated a number of significant concerns right out of the box. The American Financial Services Association, the Consumer Mortgage Coalition, the Mortgage Bankers Association and the Residential Servicing Coalition submitted a joint comment letter to the CFPB in response to its April 9 outline of servicing rules...

Manipulation of the London Interbank Offered Rate could have resulted in lower interest rates for subprime ARM borrowers, according to Laurie Goodman, a senior managing director at Amherst Securities Group. Interest rates on close to 80.0 percent of subprime ARMs outstanding in May were linked to LIBOR, according to data from Lender Processing Services, whose data covers about two-thirds of outstanding mortgages. As of the end of May, 70.3 percent of eligible second liens have received a modification via ... [Includes six briefs]

Mortgage-backed security investors continue to claim that a proposal in San Bernardino County to seize certain mortgages in non-agency MBS via eminent domain is unconstitutional. They also warn that if the “Homeownership Protection Program” is implemented there will be negative consequences. “It could severely negatively impact the value of your home, it could scare away jobs from the desert, it could scare away new construction, it might even result in the inability to get a mortgage or financing anywhere in the county ...

The number of loans potentially subject to strict rules for “high-cost” mortgages would dramatically increase, based on a proposal last week by the Consumer Financial Protection Bureau. However, because so few lenders actually originate loans subject to Home Ownership and Equity Protection Act requirements, the CFPB said it believes that such loans will continue to constitute a small percentage of mortgage originations. The CFPB proposed expanding the high-cost definition to include essentially all closed-end mortgages and ...