Cyber warfare is heating up in the United States and throughout the world, with “distributed denial of service” attacks up significantly in the third quarter against mortgage lenders and other financial services providers and corporate entities, according to a report released this week by Prolexic Technologies, a vendor of DDoS protection services. During the third quarter, Prolexic mitigated seven DDoS attacks of more than 20 gigabits per second (Gbps) for different clients across multiple industries, the firm said. A number of these attacks leveraged a toolkit called “itsoknoproblembro” that has been used in some recent high-profile DDoS attacks. In a DDoS attack, one or more hackers deploy...

Major banks reported increased charge offs and nonperforming assets for home-equity loans in the third quarter of 2012 due to new guidance from the Office of the Comptroller of the Currency. However, bank officials and industry analysts suggest that banks have largely already reserved for the new reported losses and that overall trends point toward improvements in HEL performance. In June, the OCC updated its accounting guidance to require banks to classify mortgages and other loans discharged by troubled borrowers in bankruptcy as troubled debt restructurings. The agency said a bank should charge off the excess of the loan’s carrying amount over the fair value of the collateral with the remaining balance of the loan placed into non-accrual status. “The bankruptcy court ‘removed’...

The Federal Housing Finance Agency’s five-year strategic plan aims to develop a “new system” for recording mortgages electronically and assuming custodianship of mortgage documents but is curiously silent about the role the Mortgage Electronic Registration System would play in a future revamped secondary mortgage market. The new system is among many initiatives and strategies outlined in the FHFA’s recently issued updated strategic plan for 2013-2017. The plan builds on an earlier plan for the conservatorships of the government-sponsored enterprises released in February. As part of building a new infrastructure to replace the GSE model, the FHFA said...

The mortgage industry does not appear to be making much headway when it comes to reducing the volume of complaints consumers lodge with the Consumer Financial Protection Bureau. In fact, according to the CFPB’s latest consumer complaint report, mortgage-related issues are becoming more prevalent. As of the end of the third quarter, the CFPB had received approximately 79,200 consumer complaints, including approximately 36,300 related to mortgages (46 percent), 23,400 for credit cards (30 percent), 12,900 related to bank accounts and services complaints (16 percent), and 2,900 having to do with private student loans (4 percent). Three months earlier, mortgages accounted...

Just two institutions – Fannie Mae and Freddie Mac – end up securitizing the vast majority of conventional home loans, but a large universe of lenders deliver a significantly diverse supply of loans to the government-sponsored enterprises. A new Inside Mortgage Finance special report based on loan-level securities disclosures reveals that 1,848 different institutions delivered single-family mortgages to the two GSEs during the third quarter. They ranged in size from Wells Fargo, which delivered nearly a quarter of mortgages securitized by Fannie and Freddie during the period, to Wisconsin-based Universal Mortgage Corp., which sold one small $39,000 loan to Fannie during the period. The report, GSE Seller Profile: 3Q12, shows...

Four borrowers from Alabama with adjustable-rate mortgages filed a class-action lawsuit this month against 12 banks that establish the London Interbank Offered Rate. The lawsuit suggests that more than 10,000 borrowers meet the class specifications, which cover loans originated from 2000 through 2009, and that the banks made millions of dollars or even billions due to alleged collusion. “This matter arises from a global conspiracy to fix or set LIBOR – the reference point for setting interest rates on ARMs and other loans – by a cabal of prominent financial institutions,” according to the lawsuit filed in the U.S. District Court for the Southern District of New York. The lawsuit is believed to be the first from borrowers regarding LIBOR manipulation. The plaintiffs claim...

The mortgage lending industry is universally opposed to a Consumer Financial Protection Bureau proposal to establish a new, more comprehensive “all in” annual percentage rate formula that would include various additional fees and charges. The APR provision is one part of the CFPB’s extensive proposed rule intended to simplify and integrate the mortgage disclosures consumers are entitled to under the Truth in Lending Act and Real Estate Settlement Procedures Act. The overhaul was mandated by the Dodd-Frank Act. In the proposed rule, which came out in July, the bureau would replace...

Both supporters and opponents of the mortgage interest deduction are laying the groundwork in anticipation of a renewed post-election effort to significantly revise or even outright repeal a staple of middle-class homeownership as Washington is forced to grapple with tax reform and the looming “fiscal cliff.” A number of industry trade groups were reluctant to go on record but industry insiders say they are getting their facts and research together in anticipation of the first serious attempt to repeal the MID in two decades. The most critical factors that will dictate...

PNC Bank has sued Republic Mortgage Insurance Co. for refusing to pay claims and attempting to rescind coverage on thousands of legacy mortgage loans that came with the bank’s acquisition of National City Corp. in 2008. In a complaint filed in federal district court in Pittsburgh last week, PNC Bank alleged that the North Carolina mortgage insurer refused to honor coverage it sold to National City under a “flow” policy and “pooling” policy between 1989 and 2005 by increasing its rescissions and cancellations. The flow policy provided...

The number of major fair lending settlements brought by federal regulators over the last year highlights the increasing importance of mortgage lenders properly evaluating their risk of being out of compliance and responding appropriately and preemptively, according to top banking agency officials. Since November 2011, the Department of Justice has settled seven fair lending cases – against Bank of America, Countrywide Financial, GFI Mortgage Bankers, Luther Burbank Savings, Mortgage Guaranty Insurance Corp., SunTrust Mortgage, and Wells Fargo – mostly related to steering, pricing and underwriting. In the aggregate, these settlements have produced more than $550 million in monetary relief in compensation for more than 250,000 victims, according to Jon Seward, head of housing and civil enforcement for the Justice Department. “All seven cases resulted from referrals” as the regulators are...