The National Credit Union Administration’s lawsuits regarding non-agency mortgage-backed securities mark a shift in focus to misrepresentation rather than breaches of representations and warranties, according to industry attorneys. Last week, the NCUA filed lawsuits against JPMorgan Securities and RBS Securities claiming that misrepresentations as well as violations of federal and state securities laws caused...
The Supreme Court of the United States has accepted First American Financial Corp. v. Edwards, in which the justices will consider whether an individual who has not suffered any actual damages from violations of the Real Estate Settlement Procedures Act has legal standing to sue in federal court. SCOTUS plans to consider two questions, the first of which is “whether RESPA requires the plaintiff in a private damages action to allege that an unlawful…
Legislation gaining momentum in Congress to create a covered bond framework still lacks the endorsement of the Federal Deposit Insurance Corp. Analysts note that the FDIC’s concerns need to be addressed for there to be any hope of establishing a non-agency market via covered bonds. Last week, the House Financial Services Committee approved H.R. 940, the U.S. Covered Bond Act of 2011, by a 44-7 bipartisan vote. However, the committee rejected...
Treasury Undersecretary Jeffrey Goldstein told an industry gathering last week that the Obama administration is paying very close attention to industry feedback on its controversial risk-retention proposed rule, after an outpouring of concern from both the industry and a number of members of Congress raised the alarm. “We are seriously considering feedback and are committed to getting this rule right, so that we can ensure securitization ...
Trade groups representing home builders and real estate agents are warning Congress that a decrease in conforming loan limits will result in higher interest rates for borrowers and other less favorable loan terms. However, the housing advocates face a tough battle in extending temporarily elevated conforming loan limits. Without action from Congress, the high-cost loan limit for agency mortgages and the FHA will fall from $729,750 to $625,500 beginning Oct. 1. Some 5.25 million owner-occupied homes will no longer qualify...
Staff at the Consumer Financial Protection Bureau can proceed with their integrated mortgage disclosure project, “know before you owe,” without having a confirmed director in place, and they might even be able to release a proposed rule before a chief is confirmed by the Senate. But any final rule issuance on the bureau’s part would likely prompt a legal challenge from somewhere within the mortgage finance industry, according to some leading industry attorneys. …
Morgan Keegan, a brokerage subsidiary of Regions Financial, agreed to pay $200 million last week to settle fraud charges related to subprime mortgage-backed securities. The settlement was reached with the Securities and Exchange Commission, state regulators and the Financial Industry Regulatory Authority. The regulators accused Morgan Keegan of causing the false valuation of subprime MBS in five funds managed by Morgan Asset Management from January to July 2007. The settlement also states...
The House Appropriations Committee, in a politically charged move, has approved a $19.9 billion spending bill that will affect regulators and the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among the visible implications of the budget package, which is almost $2 billion (9 percent) below last year’s funding level and almost $6 billion below President Obama’s FY2012 request – is a double move on the controversial Consumer Financial Protection Bureau…
Under a settlement with the Federal Trade Commission, a federal court has banned First Universal Lending and its three owners, Sean Zausner, David Zausner and David Feingold, an attorney in Palm Beach Gardens, FL, from the mortgage modification business and ordered them to pay almost $19 million for consumer refunds. The defendants allegedly deceived distressed homeowners with phony claims that they would negotiate with their respective lenders to modify their mortgages and make them more affordable ...
If you make your living originating residential mortgages, you’re going to have to be licensed either by the state or by the Nationwide Mortgage Licensing System and Registry under the federal Secure and Fair Enforcement for Mortgage Licensing Act, otherwise known as the SAFE Act, under a new final rule from the Department of Housing and Urban Development. …
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