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...
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...
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 U.S. Attorney General’s recently released 2011 annual report to Congress on the Equal Credit Opportunity Act Amendments of 1976 provides some useful insight as to what prompts it to litigate referrals from other agencies, as opposed to bumping them back for administrative resolution. Referrals that are most likely to be returned generally share a few characteristics, such as whether the practice at issue had ceased and there is little chance that it will be repeated. Another characteristic is whether the violation may have been accidental or stemmed from ignorance of the...
The Federal Reserve Board recently brought a consent order against Morgan Stanley to deal with what it characterized as a pattern of misconduct and negligence in residential mortgage servicing and foreclosure processing at the Wall Street firm’s Saxon Mortgage Services subsidiary, once the 34th largest mortgage servicer in the United States. “As noted in the announcements relating to the 2011 enforcement actions, the Federal Reserve believes monetary sanctions are appropriate and plans to announce monetary penalties in these cases,” the Fed said. The monetary penalties...
With all the concern thatfs been raised about loan originator compensation since the mortgage marketfs collapse in 2008, and given a certain amount of gget-toughh rhetoric from leadership at the Consumer Financial Protection Bureau, the agency seemed to take a quick-and-dirty approach when issuing its first pronouncement in topic earlier this month. Back in September 2010, the Federal Reserve put out loan originator compensation rules under the Truth in Lending Act and Regulation Z, effective as of April 6, 2011. Then with enactment of the Dodd-Frank Act of 2010...
The mortgage lending industry is apprehensive about the multitude of mortgage servicing rules coming its way, and that anxiety is probably well justified, leading industry representatives suggests. Beyond last year’s consent orders and last month’s $25 billion mortgage servicing settlement and all the ramifications they have for industry servicing practices going forward, the most immediate concern has to do with a proposed rule on mortgage servicing due out this summer from the Consumer Financial Protection Bureau. Last week, the CFPB made a public “pre-announcement” of the...
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]
The Department of Housing and Urban Development has announced discrimination settlements with two mortgage lenders accused of denying FHA mortgage loans to expectant mothers. Two women filed separate complaints against Magna Bank in Nashville, TN, and Home Loan Center in Irvine, CA, alleging a violation of the Fair Housing Act. According to the complaints, the women’s loan applications were rejected because they were pregnant and temporarily on leave. The settlement agreement with Magna Bank requires the bank to pay the complainant $14,085 for allegedly ...
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