Wells Fargo has agreed to a $175 million fair lending settlement with the U.S. Department of Justice, the Illinois Attorney General’s office and the Pennsylvania Human Relations Commission. The settlement provides $125 million in compensation for minority borrowers who were allegedly steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin. Wells will also provide $50 million in direct downpayment assistance to borrowers in communities around...

Mortgage lending representatives are asking federal banking regulators to stop using disparate impact analysis in fair lending cases, arguing that its use is based on unsupported legal theory, yet carries real consequences for banks and consumers that detract from legitimate fair lending efforts. Frank Keating, president and CEO of the American Bankers Association, said his members are strong advocates for fair lending and fully support enforcement against practices that intentionally discriminate. “However, disparate impact asserts fair lending violations occurred based only on...

Judge Michael Simon of the U.S. District Court for the District of Oregon ruled that breach of contract claims brought by tens of thousands of homeowners may proceed in a nationwide class action alleging that Bank of America improperly force-placed high-premium flood insurance policies on homeowners across the country. In Arnett, et al. v. Bank of America, N.A., Civil Action No. 11-cv-1372, plaintiffs Ronda and Larry Arnett allege that Bank of America has a practice of force-placing flood insurance coverage above...

In the proposed rule the Consumer Financial Protection Bureau released two weeks ago addressing various issues associated with high-cost mortgages, the bureau revealed the most detail yet regarding a National Mortgage Database that’s been in development for the past two years. A 2010 report by the Government Accountability Office indicated officials from the Federal Reserve and representatives of Freddie Mac were working on such a database on a pilot basis. “The officials are exploring the feasibility...

The regulatory workload required of the Consumer Financial Protection Bureau and other federal banking regulators is moving forward sporadically, with a number of proposals yet to be released before the January 2013 deadline imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The industry concern is that regulators will find themselves forced into a massive document dump at the end of the year, with mortgage lenders then having to scramble in dozens of directions at the same time in an attempt...

When Mortgage Electronic Registration Systems is in the news, it’s usually racking up another court victory. Not this time. MERS recently agreed to make a number of changes to its practices – including regular reports on the accuracy of its records – as part of a settlement of a lawsuit that Delaware Attorney General Beau Biden filed against it last year. Among the changes MERS agreed to was to maintain a database that will enable homeowners whose mortgages are held by MERS members to see who owns and services...

California. Gov. Jerry Brown, D, has signed into law the Homeowner Bill of Rights (AB 278/SB 900). The new law will force large lenders to provide a single point of contact, eliminate dual tracking and impose significant civil penalties for “robo-signed” documents, while permitting homeowners to sue to prevent foreclosure. This makes California the first state in the nation to statutorily implement a large section of the national mortgage servicing settlement reached earlier this year with the nation’s top...

House of Representatives. Regulatory Confidentiality Bill Introduced. Earlier this month, Reps. James Renacci, R-OH, and Ed Perlmutter, D-CO, introduced H.R. 6125, a bill that would revise the Federal Deposit Insurance Act to provide protections to documents and information submitted by banks and nonbanks to the Consumer Financial Protection Bureau and to state bank and financial regulators. The measure has been referred to the House Financial Services Committee. H.R. 4014, a similar bill, passed the House...

Moody’s Investors Service last week issued a request for comment, in which the firm proposes to update its published methodology covering Moody’s approach to Servicer Quality assessments for primary servicers of residential mortgage loans in the U.S. The key changes proposed include augmenting servicer data with more timely trust data, applying a formal weighting system to the assessment factors, applying a more positive treatment to modified loans, and adding a re-default rate to those modified loans. Once the proposed...

Issuance of new non-mortgage ABS jumped 16.3 percent from the first quarter of 2012 to the second, with big gains in credit card and student loan securitization, according to a new market analysis and ranking by Inside MBS & ABS. A total of $48.01 billion of non-mortgage ABS were issued during the second quarter, the market’s biggest three-month output since the third quarter of 2009. It brought year-to-date issuance to $89.28 billion, up 19.6 percent from the first six months of 2011. Credit card issuance more than tripled from the first quarter, surging...[Includes three data charts]