Federal banking regulators recently put out some fresh signals that they are listening to the lending community and want to collaborate with the new Consumer Financial Protection Bureau to better harmonize their regulatory, supervisory and examination requirements and procedures to help lower the compliance load for lending institutions. “Our dealings with the CFPB over the last several months have focused on consumer complaints and policy and exam coordination,” John Walsh, acting comptroller of the currency, told members of the Senate Banking, Housing and Urban Affairs Committee during a recent hearing. “The CFPB currently has in process several rulemakings where interagency consultation will be critical, and we are working on a consultation agreement that will provide the prudential regulators with reasonable time to review, discuss and comment on CFPB rulemakings,” he added.

Weeks after bringing the first criminal charges to be filed in a “robo-signing” related case, the Nevada State Attorney General’s office has filed suit against Lender Processing Services, the nation’s largest provider of default mortgage services, and some of its subsidiaries for engaging in allegedly deceptive practices against consumers in the state. The lawsuit, filed Dec. 15, 2011, in the 8th Judicial District of Nevada, follows the state AG’s investigation into LPS’ default servicing of residential mortgages in Nevada, especially loans in foreclosure. The lawsuit includes allegations of widespread document execution fraud, deceptive statements made by LPS about efforts to correct document fraud, improper control over foreclosure attorneys and the foreclosure process, misrepresentations about LPS’ fees and services, and evidence of an overall press for speed and volume that prevented the necessary and proper focus on accuracy and integrity in the foreclosure process.

California. In XL Specialty Insurance Company v. Perry, No. 11-2078, U.S. District Court for the Central District of California ruled that the Federal Deposit Insurance Corp. cannot intervene in in a litigation dispute between former IndyMac Bancorp executives and their insurers. The court ruled the FDIC did not meet the standard for intervention as a matter of right, or the standard for permissive intervention. Connecticut. In RMS Residential Properties, LLC v. Anna M. Miller et al., the Connecticut Supreme Court recently ruled that RMS Residential Properties, LLC, with an assignment from Mortgage Electronic Registration Systems, Inc., had standing to foreclose after the borrower defaulted, and that MERS was a valid mortgagee at the origination of the loan, as the nominee for the original lender. The court rejected the claim of the defendant, who argued that that MERS, as third party, could not be named as a mortgagee because it was not the original lender or the party secured by the mortgage. The court also rejected the defendant’s request to declare the MERS mortgage to be void because MERS was not the owner of the debt.

There’s been a notable changing of the guard among attorneys in the mortgage banking practices at the law firms of Patton Boggs, Ballard Spahr and Dykema. Partners Richard Andreano, John Socknat and Michael Waldron and associate Reid Herlihy left Patton Boggs recently with upwards of 100 clients and signed on with the newly created Mortgage Banking Group at Ballard Spahr. The new unit is part of Ballard Spahr’s larger effort to build up its Washington, DC, office. Meanwhile, Dykema augmented its regulatory presence by bringing on board former Patton Boggs senior lawyers Heather Hutchings and Haydn Richards to its Financial Services Regulatory and Compliance practice.

The FHA will continue to play a critical role in the nation’s housing markets in 2012 even as it tries to balance the need to extend credit while reducing its market share to open the way for private capital to return to the mortgage market, according to industry observers. That means walking a tightrope in trying to keep the Mutual Mortgage Insurance Fund actuarially sound while trying to avoid piling on more fees and additional restrictions, which could hamper housing recovery, observers said. “We can’t have an economic recovery without a housing recovery,” said Brian Chappelle, a mortgage industry consultant. “The philosophical debate about the role of government in housing should be ...

Republican lawmakers in the House advanced an ambitious bill to create a regulatory framework for non-agency mortgage securitization over its first legislative hurdle this week, although they failed to gain much Democratic support and the future for mortgage reform legislation in the Senate remains highly uncertain. The House Financial Services Subcommittee on Capital Markets and the Government Sponsored Enterprises approved draft legislation, the Private Mortgage Market Investment Act, introduced by its chairman, Rep. Scott Garrett, R-NJ. The amended legislation, which...

Market experts and participants are uncertain as to just how capable the private sector is to step in and replace Fannie Mae and Freddie Mac, as legislative initiatives to deal with the government-sponsored enterprises and reform the non-agency MBS market gain some momentum in Congress. “I think the problem so far has been the fear that the flow of credit would dry up if we try to extract the government from the mortgage finance system. With $5 trillion in GSE/agency debt out there, it’s a compelling fear,” said Ralph Daloisio, a managing director of the New York-based structured finance group of...

Servicing and delinquency issues in recent years have prompted three of the four major bank portfolio lenders to decrease their focus on portfolio originations. Meanwhile, Wells Fargo has indicated that it is willing to continue to increase its first-lien portfolio holdings, seeing attractive returns relative to other investing options. Bank of America and JPMorgan Chase decreased their first-lien mortgage portfolio holdings in the third quarter of 2011 compared with the previous quarter, according to the Inside Mortgage Finance Bank Mortgage Database. The banks ranked first and third, respectively ... [Includes one data chart]

Non-bank servicers have received a reprieve from scrutiny by the Consumer Financial Protection Bureau due to a heated political fight in Congress. Despite a major push last week by the Obama administration, Senate Republicans blocked an attempted vote to confirm former Ohio Attorney General Richard Cordray as director of the CFPB. Last week, the Senate voted 53-45 on a motion to consider Cordray as director of the CFPB. At least 60 votes were needed to end a Republican filibuster. Scott Brown, R-MA, was the only Republican to vote in favor of the motion ...

The Treasury Department increased its threats against non-agency servicers regarding Home Affordable Modification Program performance. In a report released last week, the Treasury was highly critical of JPMorgan Chase and a number of other non-agency servicers remain on notice. Freddie Mac, acting as the Treasury’s compliance agent for the Making Home Affordable program, conducts quarterly assessments of HAMP servicers. In the third quarter of 2011, Chase was deemed to be in need of “substantial improvement” in compliance with MHA guidelines, the third quarter in a row for the servicer ...