The Securities and Exchange Commission has charged two officials of Houston-based bank holding company Franklin Bank Corp., with setting up increasingly aggressive loan modification programs during the last six months of 2007 to hide from investors the true amount of the bank’s nonperforming assets and to artificially inflate Franklin’s net income and earnings. According to the SEC, CEO Anthony Nocella and CFO Russell McCann instituted three loan modification schemes that caused Franklin to account for its significantly increasing portfolio of delinquent...
The National Fair Housing Alliance filed a federal housing discrimination complaint with the U.S. Department of Housing and Urban Development against Wells Fargo & Co. and Wells Fargo Bank, N.A. over its marketing and maintenance of foreclosed properties. A similar complaint against another major national mortgage lender is expected from the organization this week. In the Wells case, the NFHA said its complaint resulted from an undercover probe of the lender's real-estate-owned property management practices related to 218 properties. According to the housing advocacy group...
An unusual coalition of dozens of lender, realtor, consumer and civil rights groups late last week urged the Consumer Financial Protection Bureau to write a broadly defined “qualified mortgage” as part of the ability-to-repay final rule it’s putting together as per the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is expected to issue a proposed rule defining a QM shortly. As per the ability-to-repay standards of Dodd-Frank Section 1412, a qualified mortgage cannot have points and fees in excess of 3 percent of the loan amount. The groups are worried...
Four mortgage- and financial services-related trade groups told the Consumer Financial Protection Bureau they’re unhappy the CFPB hasn’t adopted more of the suggestions they’ve made over the numerous iterations the bureau has put out of its Know Before You Owe consolidated consumer disclosure project. The CFPB is currently on the ninth version of its evolving disclosures model. “During the Know Before You Owe iterations, we have submitted a large number of comment letters that walk the CFPB through a large number of very technical, but important details,” the groups said...
Ohio. The state Attorney General’s office recently finalized amendments to the state’s ability-to-repay rules that provide a safe harbor for certain types of mortgages. Under the new rules, a borrower is deemed to have an ability to repay and a reasonable probability of payment if the lender provides a fully-amortizing fixed-rate refinance mortgage that has the same or a lesser interest rate or principal amount than the current loan, and does not lengthen the payoff date. Pennsylvania. The state Department...
U.S. District Court for the District of Columbia. Mortgage Servicing Settlement Approved. Earlier this month, the U.S. District Court for the District of Columbia gave its approval to the consent orders that make up the $25 billion mortgage servicing settlement by federal regulators and 49 state attorneys general into alleged mortgage-related violations by the nationfs five largest mortgage servicers. The federal agencies that signed on to the settlement are the Department of Justice, the Department of Housing and Urban Development, the Department of Treasury...
At the request of the Federal Trade Commission, the U.S. District Court for the Central District of California has imposed a $3.89 million judgment against defendant Samuel Paul Bain and three of his companies, including U.S. Homeowners Relief, for their role in an allegedly fraudulent mortgage modification and foreclosure relief scheme. According to the FTC’s complaint, the defendants charged consumers up to $4,250 for a promise to reduce their mortgage payments, interest rates, and sometimes even their loan balances.The court order also bans Bain and his firms from telemarketing...
Bank and thrift holdings of home-equity loans continue to decline, particularly holdings of closed-end second liens. Even though performance on the loans currently remains strong, industry analysts warn that these assets could cause major losses. Banks and thrifts held $1.18 trillion in home-equity lines of credit, unused HELOC commitments and closed-end seconds at the end of 2011, according to the Inside Mortgage Finance Bank Mortgage Database. That was down 1.5 percent from the third quarter of 2011 and down 8.8 percent from the end of 2010 ... [Includes one data chart]
A subsidiary of Credit Suisse Group issued a $741.94 million non-agency jumbo mortgage-backed security at the end of March, the first jumbo issuance by a company other than Redwood Trust since 2008. CSMC Trust 2012-CIM1 included some unique characteristics prompting criticism from Fitch Ratings and speculation about whether Credit Suisse will issue more non-agency MBS. Standard & Poor’s and DBRS placed AAA ratings on the senior bond in the privately-placed deal based on 8.00 percent credit enhancement. Fitch – which was paid to provide feedback on the deal but ultimately was not selected to rate the deal – said the credit enhancement for the AAA tranche should have been 9.75 percent ...
The Consumer Financial Protection Bureau this week detailed servicing rules it will soon propose regarding disclosures to borrowers and servicing procedures. “The mortgage servicing rules we are considering reflect two basic, common sense standards – no surprises and no runarounds,” CFPB Director Richard Cordray said. “They would apply to all mortgage servicers regardless of how they are organized, including banks, thrifts, credit unions and nonbank servicers.” The rule, which will amend the Truth in Lending Act and Real Estate Settlement Procedures Act, is required by the Dodd-Frank Act. The CFPB said it will publish a proposal ...
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