The dust is starting to settle over an increasingly complex landscape of agency loan limits for 2012 that features 83 defined metro markets where the FHA can insure loans that are too big to be financed by Fannie Mae or Freddie Mac. The Department of Housing and Urban Development this week released guidance on FHA loan limits that changed twice in calendar 2011. On Oct. 1, a new set of FHA loan limits based on a $625,500 maximum went into effect, and they will apply to loans with FHA case numbers assigned between that date and Nov. 17, said...(Includes one data chart)

President Barack Obama and his Democrat allies on Capitol Hill initiated a multi-prong attack against their Republican opponents this week in an effort to put them on the hook in the 2012 election over their refusal to allow an up-or-down vote on Richard Cordray, the president’s nominee to head the controversial Consumer Financial Protection Bureau. The initiative started this weekend, when the White House released a report and began an accompanying media blitz, warning of the dangers American consumers face in the financial marketplace without a director at the...

Massachusetts Attorney General Martha Coakley sued five major lenders late last week for allegedly illegal foreclosure practices. One of the firms, GMAC Mortgage, responded by pulling out of Massachusetts lending, prompting Coakley to request a Congressional investigation of GMAC. This week, the AGs of California and Nevada followed suit with a joint announcement of a dual mortgage fraud probe. “We have two clear goals with this lawsuit,” Coakley said. “One is to provide for real accountability for the roles the banks have played in unlawful and illegal foreclosures and second...

The proposal drafted by a senior House Republican that aims to lure private capital into the secondary mortgage market received the general support of industry witnesses at a hearing this week, but Democratic lawmakers say repealing key features of the Dodd-Frank Act would be a non-starter. The Private Mortgage Market Investment Act, drafted but not yet filed by Rep. Scott Garrett, R-NJ., would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all. Under the bill, the Federal Housing...

Patton Boggs, a large Washington DC-based law and lobbying firm, has seen an en masse exodus of its mortgage banking lawyers. Ballard Spahr created a Mortgage Banking Group for the three Patton Boggs partners and an associate, while Dykema welcomed two senior attorneys to its growing Financial Services Regulatory and Compliance practice. Patton Boggs did not return calls for comment regarding the future of its own mortgage practice, and the departed lawyers would not speculate as to the future of their former firm. Partners Richard Andreano, John Socknat and Michael Waldron...

In a move that further complicates the 50-state settlement discussions between the mortgage servicing industry and state attorneys generals, Massachusetts Attorney General Martha Coakley, D, has sued a handful of top mortgage lending banks for allegedly pursuing illegal foreclosures and “deceptive loan servicing.”The targets of Coakley’s actions are Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC, as well as Mortgage Electronic Registration System, Inc.“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” Coakley said. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks’ illegal behavior and real relief for homeowners.”

A Federal judge in California rejected a servicer’s motion to dismiss a putative class action that accused the servicer of wrongly rejecting a borrower's mortgage modification application and of improperly starting foreclosure proceedings.In Gaudin v. Saxon Mortgage Services Inc., the plaintiff argued that a trial modification plan provided to her by the lender represented a binding contract that required Saxon to evaluate the plaintiff under the Home Affordable Modification Program, and to provide a permanent loan mod, provided all conditions of the trial plan were satisfied.In requesting a dismissal, Saxon argued that the trial plan only required it to evaluate the borrower’s eligibility for a modification, and did not require Saxon to offer a modification.

Massachusetts. In Culhane v. Aurora Loan Services of Nebraska, the United States District Court for the District of Massachusetts late last week granted the defendant’s motion for summary judgment, finding that Aurora, as holder of the plaintiff’s mortgage by assignment from Mortgage Electronic Registration Systems Inc., and as the servicer of the loan, could exercise the statutory power of sale and foreclose under Massachusetts laws. U.S. District Court Judge William G. Young held MERS may serve as the mortgagee as the lender’s nominee, MERS has the authority and right, and may assign mortgages in which it is named as the mortgagee, and such mortgages are valid and enforceable. Further, the judge concluded that, “The court holds that there was no flaw in this process. Under Massachusetts law, MERS lawfully held the legal title to Culhane’s mortgage in trust first for Preferred and subsequently for Deutsche.”

Banks significantly increased their non-agency jumbo originations even before the high-cost conforming loan limit was lowered in October, with jumbo originations outpacing overall originations during the period. A number of lenders large and small continue to see opportunities in the jumbo space, though securitization is likely to remain limited in the near-term. Some $27.0 billion in non-agency jumbos were originated in the third quarter of 2011, according to estimates by affiliated publication Inside Mortgage Finance ... [Includes one data chart]

Bank of America and Wells Fargo continued their dominance of the FHA servicing market, accounting for 55.1 percent of the business as of Sept. 30. Of the 1,177,858 FHA-insured loans currently being serviced, 16.91 percent are in various stages of delinquency. Seriously delinquent loans – 90 days or more behind on their mortgage payments – comprised ... [includes one chart]