Six financial services trade associations presented the mortgage lending industry’s views to the Department of Housing and Urban Development regarding the agency’s proposed rule to implement a disparate-impact legal standard under the Fair Housing Act. One of their arguments was that HUD should postpone its rulemaking pending the United States Supreme Court’s disposition of Magner v. Gallagher (No. 10-1032). The primary issue in the case is whether the disparate-impact theory of discrimination applies under the Fair Housing Act or whether plaintiffs have to prove intentional ...

The Federal Housing Finance Agency might be backing away from its controversial suggestion to change mortgage servicer compensation from the current 25 basis points of outstanding principal balance to a flat fee of $10 per mortgage, per month for current loans, with no incremental fees other than existing incentive compensation for the servicing of non-performing mortgages. “Considering changes to the structure of mortgage servicing compensation is an important component of improving the operations of the future mortgage market,” an FHFA spokeswoman said. “We received useful input on ...

President Barack Obama last week launched the creation of a new Residential Mortgage Backed Securities Working Group to further investigate mortgage origination and servicing abuses. “Tonight, I’m asking my attorney general to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis,” the president said during his recent State of the Union address ...

The Consumer Financial Protection Bureau has released for public comment the eighth iteration of its consumer mortgage disclosure prototype forms, dubbed “hemlock” and “butternut,” specifically asking for input as to how the prototypes work with the CFPB’s current application disclosure prototype. “These prototypes use a format for closing costs that’s similar to the format on the initial disclosure to enable the two forms to work well together,” the CFPB said. “Consumers should be able to see if their final loan terms and costs are different from the numbers they were originally offered ...

State attorneys general reportedly have until today to agree to a potential $25 billion settlement with big mortgage lender/servicers – namely Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Under the latest iteration being voted on, about $17 billion of that amount would consist of penalties paid by the banks, which would be used for principal reductions. Another $5 billion would go toward a reserve account that would be used to pay $1,800 checks to homeowners affected by deceptive foreclosure practices, with $2 billion to $3 billion to go toward helping ...

Days after Consumer Financial Protection Bureau chief Richard Cordray appeared reluctant to commit to publishing a formal regulatory agenda before a key House committee, the bureau turned around last week and quietly issued just such a document, albeit an iteration that did not list key projects under the CFPB’s newly expanded powers it acquired with an appointed director. That suggests the agenda was put together prior to Cordray’s recess appointment and perhaps without his awareness, some observers suggest; otherwise, surely he would have mentioned it when he was ...

New York Attorney General Eric Schneiderman filed a lawsuit late last week against Bank of America, JPMorgan Chase and Wells Fargo, claiming that their use of MERSCorp’s Mortgage Electronic Registry System resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. Among its specific accusations, the NY AG’s office says that, out of the 13,000-plus foreclosure actions against New York homeowners in which MERS listed itself as the plaintiff, “in many ...

Consumer Financial Protection Bureau Director Richard Cordray gave no indication which way his agency may be leaning in terms of the kind of legal protection the CFPB may provide related to “qualified mortgages” and lender liability when the agency releases its ability-to-repay final rule under the Truth in Lending Act later this year. Appearing before the Senate Banking, Housing and Urban Affairs Committee last week, Cordray said, “One of the things we’ve heard most about from institutions is they would like to see this rule – whatever the criteria are – that there be some sort of safe ...

Mortgage Guaranty Insurance Corp. announced a new two-year waiver from regulatory capital requirements from the Office of the Insurance Commissioner for the State of Wisconsin, which would allow it to write new business through Dec. 31, 2013. Approved on Jan. 23, the waiver came after the previous waiver expired at the end of last year. As did the prior order, the new waiver allows MGIC to write new business as long as it maintains a level of capital sufficient to keep the company afloat. The new waiver required MGIC to contribute $200 million to MGIC Indemnity Corp. (MIC), a direct subsidiary of MGIC, by Jan. 31 as part of a ...

Veterans took advantage of their home loan benefit in record numbers, as loans originated under the Department of Veterans Affairs’ home loan guaranty program reached their highest total in eight years, according to the agency. The VA reported 357,594 mortgage loans with an agency guarantee in 2011, an increase of nearly 14.0 percent over last year. There are currently more than 1.5 million active VA home loans, the agency said. VA-backed home loans also showed the lowest serious delinquency and foreclosure rates in the mortgage industry, the agency noted. It cited the Mortgage Bankers Association’s National Delinquency Survey for 3Q11 showing ... [including one chart]