In an unpublicized move, industry sources indicate that the Consumer Financial Protection Bureau told mortgage lending representatives in a Nov. 21 conference call that it has made several systems and process changes related to its mortgage consumer complaint system, in response to a joint comment letter the industry had submitted. Further, the CFPB is said to be already training participating financial institutions on the new system, which is expected to be fully operational any day now. Large banks (those with assets in excess of $10 billion) are to be covered by the system.

A Federal judge in California rejected a servicer’s motion to dismiss a putative class action that accused the servicer of wrongly rejecting a borrower's mortgage modification application and of improperly starting foreclosure proceedings.In Gaudin v. Saxon Mortgage Services Inc., the plaintiff argued that a trial modification plan provided to her by the lender represented a binding contract that required Saxon to evaluate the plaintiff under the Home Affordable Modification Program, and to provide a permanent loan mod, provided all conditions of the trial plan were satisfied.In requesting a dismissal, Saxon argued that the trial plan only required it to evaluate the borrower’s eligibility for a modification, and did not require Saxon to offer a modification.

Massachusetts. In Culhane v. Aurora Loan Services of Nebraska, the United States District Court for the District of Massachusetts late last week granted the defendant’s motion for summary judgment, finding that Aurora, as holder of the plaintiff’s mortgage by assignment from Mortgage Electronic Registration Systems Inc., and as the servicer of the loan, could exercise the statutory power of sale and foreclose under Massachusetts laws. U.S. District Court Judge William G. Young held MERS may serve as the mortgagee as the lender’s nominee, MERS has the authority and right, and may assign mortgages in which it is named as the mortgagee, and such mortgages are valid and enforceable. Further, the judge concluded that, “The court holds that there was no flaw in this process. Under Massachusetts law, MERS lawfully held the legal title to Culhane’s mortgage in trust first for Preferred and subsequently for Deutsche.”

Consumer Financial Protection Bureau.Federal Deposit Insurance Corp.Federal Reserve Board.National Credit Union Administration.Office of the Comptroller of the Currency. Big Institutions Under CFPB Oversight. The Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Federal Reserve Board, the National Credit Union Administration and the Office of the Comptroller of the Currency announced together that banks, thrifts and credit unions with more than $10 billion in total assets will be subject to direct CFPB supervision, examination and enforcement with respect to federal consumer financial protection laws.

The House Financial Services Financial Institutions and Consumer Credit Subcommittee plans a hearing on Tuesday, Dec. 6, on the examination relief bill (H.R. 3461) that panel Chairman Shelley Moore Capito, R-WV, and ranking member Carolyn Maloney, D-NY, introduced on Nov. 17. H.R. 3461, among other things, would require more timely examination reports; more information about the facts the agency relied upon to make its exam decisions; and more precise, consistent and understandable classification standards…

Banks significantly increased their non-agency jumbo originations even before the high-cost conforming loan limit was lowered in October, with jumbo originations outpacing overall originations during the period. A number of lenders large and small continue to see opportunities in the jumbo space, though securitization is likely to remain limited in the near-term. Some $27.0 billion in non-agency jumbos were originated in the third quarter of 2011, according to estimates by affiliated publication Inside Mortgage Finance ... [Includes one data chart]

Bank of America and Wells Fargo continued their dominance of the FHA servicing market, accounting for 55.1 percent of the business as of Sept. 30. Of the 1,177,858 FHA-insured loans currently being serviced, 16.91 percent are in various stages of delinquency. Seriously delinquent loans – 90 days or more behind on their mortgage payments – comprised ... [includes one chart]

The combined holdings of residential MBS by banks and thrifts topped the $1.5 trillion mark for the first time ever during the third quarter, as depository institutions without a lot of great alternative investment options continued to plow money into the market. Banks and thrifts held a record $1.533 trillion in residential MBS at the end of September, up 2.8 percent from the previous quarter and 10.4 percent ahead of the same period in 2010. Banks and thrifts held a combined 23.2 percent share of the outstanding residential MBS in the market. The biggest...(Includes two data charts)

In a blow to ratings agencies, a federal court in New Mexico has ruled that the First Amendment does not necessarily protect ratings services from lawsuits filed by disgruntled MBS investors. Judge James Browning ruled that the characteristics of MBS issued by Thornburg Mortgage and the way the ratings were disseminated may preempt free speech protection. The suit dates back to the spring of 2009, when plaintiffs that include the Genesee County Employees’ Retirement System, Midwest Operating Engineers Pension Trust Fund and the Maryland-National Capital Park &...

It would be better for the mortgage market, for taxpayers and for Fannie Mae and Freddie Mac if Congress did not dawdle in promulgating housing finance reform and clarified the future role, if any, the two government-sponsored enterprises will have, the CEOs of Fannie and Freddie told lawmakers this week. Testifying before the House Financial Services Subcommittee on Oversight and Investigations, Fannie CEO Michael Williams and Freddie CEO Charles Haldeman called on Congress to take action as the continued lack of clarity about Fannie and Freddie’s future is harmful to...