A policy shift at the Securities and Exchange Commission requiring admission of guilt in certain cases may encourage wrongdoers in the securities market to litigate rather than settle, resulting in fewer SEC settlements, according to some compliance attorneys. Fear of possible criminal prosecution and the lasting impact of an admission of guilt could compel accused companies and individuals to take their cases to trial rather than negotiate a settlement, warned Philip Stein and Jeremy Sahn, partners in the Miami-based law firm of Bilzin Sumberg. Starting in June 2013, the SEC began requiring...

Issuers of non-agency MBS and agency mortgage sellers have addressed most of the legacy representation and warranty issues that have bedeviled the market for the past few years, according to industry analysts. However, repurchase and buyback issues haven’t been completely resolved as investors and regulators make last grasps at recoveries. Analysts at Compass Point Analytics & Trading estimated that the total losses incurred for rep-and-warrant claims from Fannie Mae, Freddie Mac, the Federal Housing Finance Agency, the FHA and non-agency MBS investors by publicly traded U.S. originators still in existence will total $89.0 billion. The analysts said lenders have charged off or reserved $88.0 billion for such losses. Compass Point said...

Industry participants expect that volume will continue to grow as investor demand for commercial MBS remains strong despite some loosening of underwriting standards.

Purchase-mortgage lending exceeded refinance production for the first time in five years during the fourth quarter of 2013, according to a new Inside Mortgage Finance ranking and analysis. The shift has been in the works for some time as the potential refinance market began to shrink when interest rates rose late in the second quarter of last year. Mortgage lenders originated an estimated $168 billion of purchase mortgages during the fourth quarter of 2013, accounting for 55.1 percent of total originations. The last time purchase mortgages comprised more than half of new production was back in the fourth quarter of 2008. But purchase-mortgage originations fell...[Includes three data charts]

Mortgage industry attorneys expect to see more Consumer Financial Protection Bureau enforcement actions in the future stemming from compliance deficiencies that were dug up during the supervisory examination process. “One of the things that we saw towards the last quarter of 2013 was a couple of enforcement actions which grew directly out of supervisory exams,” Allyson Baker, a partner in the litigation group at the Venable law firm, said during a webinar this week sponsored by Inside Mortgage Finance. Baker, formerly an enforcement attorney with the CFPB, was referencing...

The whistleblower who gained fame and a lot of money from suing major banks for “robo-signing” and other improper mortgage servicing practices has filed an amended lawsuit accusing 22 companies of defrauding the Department of Housing and Urban Development of billions of dollars in false FHA claims. Lynn Szymoniak, whose 2011 interview on “60 Minutes” blew the lid off improper servicing practices at some major banks, filed a qui tam, or whistleblower, lawsuit in the U.S. District Court of South Carolina last week alleging violations of the federal False Claims Act and state false claims statutes. Defendants include CitiMortgage, Wells Fargo Bank, Bank of America, Deutsche Bank, HSBC USA, JPMorgan Chase and U.S. Bank, as well as servicers, trustees, custodians and title companies. The lawsuit seeks...

The idea of expanding the Home Affordable Refinance Program may never die, but comments this week show the Obama administration has little interest in reviving it. During a question-and-answer event this week sponsored by Politico, Department of Housing and Urban Development Secretary Shaun Donovan made it clear that HUD will not push for an expansion of HARP. While more could be done for non-agency borrowers, he said that would require legislation. “I think we should continue to look at everything we are doing in marketing it … but I think this is something we ought to continue to look at on the legislative front,” said Donovan. An industry lobbyist said...

Future changes to Home Mortgage Disclosure Act regulations may shed more light on how lenders adapt to the new ability-to-repay rule, as well as assessing the role of credit history and payment burden in the lending process and mortgage pricing. The Consumer Financial Protection Bureau late last week took the opening steps in overhauling HMDA reporting requirements under provisions included in the Dodd-Frank Act. Among the changes on the table are disclosing the loan term, total points and fees, the length of any teaser or introductory rate, and the applicant or borrower’s age and credit score. Also, the CFPB is...

Less than six weeks into the tenure of the new Federal Housing Finance Agency head, the policy direction of Fannie Mae’s and Freddie Mac’s regulator remains a mystery, much to the consternation of some industry observers. Since Mel Watt was sworn into a five-year term as FHFA director on Jan. 6, the former North Carolina Democrat congressman has made no public appearances or policy statements, except for canned comments attributed to him in routine FHFA announcements. “Everybody wants...

Green Tree Loan Servicing is the latest lender to turn away mortgage brokers, a move that in years past might create pangs of anxiety in the industry. But brokers have seen this movie before – many times – and they appear to be just fine with the latest news. “I know companies are still getting out, but we’re also seeing a number of companies stepping up to the plate,” said Don Frommeyer, senior vice president of Amtrust Mortgage Funding. Asked whether there are fewer options for brokers these days, he said...