The settlements reached by five major mortgage servicers with a handful of states over their use of the Mortgage Electronic Registration System has not weakened the legal position of MERSCorp itself, according to industry experts. The new agreements signed by New York Attorney General Eric Schneiderman with Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial has the banks paying a total of $25 million to the state in exchange for a release of further claims regarding the banks’ use of MERS throughout the servicing and foreclosure process and a pledge not to challenge...

Homebuyers rely on real estate agents to recommend specific lenders in about one-third of the mortgage-financed home purchases now taking place in the U.S. housing market. And despite the fact that many real estate brokerage firms have some sort of partnership with specific lenders, relatively little business appears to be generated by these arrangements. These are some of the major findings contained in a comprehensive new study of the home purchase mortgage market and the role real estate agents play in generating mortgage business for lenders. The study, “Key Factors in the Referral of Homebuyers to...

In a development that ultimately could affect legions of homeowners who couldn’t get a permanent loan modification, the U.S. Court of Appeals for the Seventh Circuit recently gave the go-ahead to a borrower class action against a mortgage servicer for not providing a permanent loan modification under the Home Affordable Modification Program. “We believe this affects hundreds of thousands of people, if not more – not just at Wells Fargo, but also with respect to other banks – who haven’t been able to get their loan modifications like they should have, given their compliance with their trial plans...

Home-equity lending in 2011 fell to its lowest level in more than 20 years as crumbling house prices and rigid underwriting continued to hammer away at second mortgage lending. Banks, savings institutions and credit unions reported a total of $803.6 billion of home-equity loans in their portfolios at the end of the year, down 7.2 percent from the previous December. Depository institutions accounted for the lion’s share, 92.1 percent, of the $873.0 billion home-equity market. Finance companies were the only other significant player in the market, with $49.0 billion at the...(Includes two data charts)

Senate Banking, Housing and Urban Affairs Committee member Jerry Moran, R-KS, and Sen. Joe Manchin, D-WV, recently introduced the industry-supported S. 2160, the Financial Institutions Examination Fairness and Reform Act, which would provide critical balance and additional transparency to decisions the regulatory agencies make in the examination process. S. 2160, like its counterpart in the House, H.R. 3461, would, among other things, require more timely examination reports; more information about the facts the agency relied upon to make its exam decisions; and more precise ...

Federal Housing Finance Agency.FHFA Office of Inspector General. FHFA’s Supervision of Freddie Mac’s Controls over Mortgage Servicing Contractors Faulted. The Federal Housing Finance Agency’s Office of Inspector General found some areas in which the Finance Agency could improve its supervision of Fannie Mae’s and Freddie Mac’s controls over its mortgage servicing contractors. “FHFA has not clearly defined its role regarding oversight of servicers, sufficiently coordinated with other federal banking agencies about risks ...

Arizona. A former Countrywide loan officer, Paige Kinney, aka Jamie Lee Lawler, 43, of Phoenix, AZ, has been sentenced to 15 years in prison and ordered to pay $22 million in restitution by U.S. District Judge Neil Wake. According to court documents related to the first indictment she faced, Kinney played a leadership role in a $40 million mortgage fraud scheme that targeted Countrywide Home Loans and other lenders through the use of straw buyers and “cash back” accounts. According to her plea agreement on the second ...

The fact that real estate law remains fundamentally local in nature fuels a dynamic that prevents a timely and cost-effective resolution to the nation’s foreclosure crisis: a nearly overwhelming deluge of state and local laws, rules and regulations. That’s one of the take-aways in the testimony that Alfred Pollard, general counsel of the Federal Housing Finance Agency, provided early this week before the House Committee on Oversight and Government Reform. “State and local officials have been very active in adding to or amending laws related to foreclosures or servicing of mortgages,” Pollard said...

Earlier this month, private-equity firm Fortress took its mortgage servicer unit, Nationstar Mortgage Holdings Inc., public, the second such offering for a mortgage servicer in a month, even as some large bank servicers increasingly look for the exits. The move might look like healthy creative vs. destructive capitalism to some, but it’s a disturbing trend on at least one public policy level, according to housing policy expert Karen Shaw Petrou, managing partner at Federal Financial Analytics, a Washington, DC, think tank. “From a purely market perspective, there’s no problem if banks lose and PEs win ...

Regulatory streamlining is absolutely essential if smaller mortgage lenders are going to survive the threat they face from their enormous regulatory burdens, two industry trade groups told the Consumer Financial Protection Bureau recently. “Currently, the industry is dealing with several new rules, including those under the Secure and Fair Enforcement Act for Mortgage Licensing and the Truth in Lending Act, and faces an unprecedented wave of additional rules required under Dodd-Frank Wall Street Reform and Consumer Protection Act,” said the Consumer Mortgage Coalition ...