Most major servicers reported increases in mortgage delinquency rates during the fourth quarter of 2011, but some industry data suggest seasonal factors influenced the increase. According to the Inside Mortgage Finance Large Servicer Delinquency Index, 10.88 percent of loans serviced by 19 major companies were in some stage of default at the end of 2011. That was up from 10.70 percent at the end of September and marked the fourth consecutive increase in the index. The biggest increase was in the serious default category, loans 90 days or more past due but not yet in foreclosure. Some 3.27...(Includes one data chart)

A new report detailing servicers’ compliance with foreclosure laws in San Francisco found that the mortgage industry has systematically violated state and municipal code. While California allows for both judicial and non-judicial foreclosures, the majority of servicers use the “power of sale” clause from the trust deed to choose a non-judicial foreclosure, wherein little oversight takes place. Prepared by Aequitas Compliance Solutions, the report was commissioned by San Francisco’s Office of the Assessor-Recorder. Aequitas compiled and reviewed 382 residential mortgage foreclosures, 16 percent of the...

The long-anticipated mortgage servicing settlement between the federal government, 49 state attorneys general and the nation's largest servicers isn’t just a big deal in terms of dollar amount and legal liability. It’s a critical shift in the legal and regulatory enforcement paradigm that will alter the landscape for years to come. “[T]he settlement is a strategic change in the legal and reputational risk landscape, and not just for what’s left of mortgage banking,” explained Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a Washington, DC, think tank...

The Treasury Department’s Financial Crimes Enforcement Network recently put out final regulations that extend anti-money laundering program requirements and Suspicious Activity Report filing requirements to nonbank mortgage lenders. This means that nonbank mortgage lenders and originators are going to have to set up AML programs, assign a compliance officer and develop training programs, legal experts say, and compliance will be complex and costly. “Today, FinCEN is closing a regulatory gap by requiring nonbank mortgage lenders and originators to develop anti-money ...

Mortgage lenders looking for some certainty as to whether the disparate impact theory of discrimination applies under the Fair Housing Act will be disappointed to learn they’ll have to wait. In the key case of Magner v. Gallagher, the city of St. Paul, MN, suddenly removed its challenge to an appellate court ruling on this question, precisely because it thought it would prevail. City leaders came to believe that a victory could substantially undermine important civil rights enforcement as it relates to housing throughout the nation, and that was a price they didn’t want to ...

It looks like 2012 is turning out to be the year of the settlement between top mortgage lender/servicers and federal and state government entities. Bank of America subsidiary BAC Home Loans Servicing LP – which did business as Countrywide Home Loans Servicing LP in a previous incarnation – recently agreed to reverse or refund $36 million in fees to settle charges by the Federal Trade Commission that it overcharged struggling homeowners, in violation of an earlier agreement with the government. BAC Home Loans Servicing has already reversed or refunded $28 million worth of ...

The Consumer Financial Protection Bureau released a draft monthly mortgage statement last week that the agency hopes will make it easier for homeowners to understand their mortgage and get a better handle on costs and fees. Compliance by mortgage servicers and creditors might get a boost in the process. The model document that was issued includes the principal, the current interest rate, the next date on which the interest rate may change, a description of late payment fees and a telephone number and email address that may be used to contact the servicer...

The Consumer Financial Protection Bureau’s first official budget – which will be funded by the Federal Reserve – segregates expenditures into three buckets, the lion’s share of which will go to the supervision, enforcement, fair lending and equal opportunity account. Outlays within this category are set to out-step the other two categories combined. After spending about $60 million in fiscal 2011, this SEFLEO bucket is set to climb to about $214 million for 2012 and $261 million next year. Consumer-related expenditures totaled $43 million in 2011 and are projected to roughly double ...

All mortgage lending related institutions under the regulatory purview of the Consumer Financial Protection Bureau are one step closer to a little more certainty about the confidentiality of the data and information they provide the agency and its officials after action by the House Financial Services Committee last week. The full committee passed H.R. 4014 (introduced by Rep. Bill Huizenga, R-MI), a measure that would stipulate that providing information to the CFPB for any purpose as part of the supervisory process would not be construed as waiving, destroying or otherwise affecting any ...

The Multi-State Mortgage Committee and the American Association of Residential Mortgage Regulators have issued Secure and Fair Enforcement for Mortgage Licensing Act (SAFE) Act Examination Guidelines for use by state nondepository mortgage regulators. The primary purpose of the guidelines is “to ensure that all individuals acting as mortgage loan originators are properly licensed and registered under the SAFE Act in all states in which they are conducting business,” said John Ducrest, commissioner of the Louisiana Office of Financial Institutions and chairman of the ...