The spring 2014 semi-annual regulatory agenda of the Consumer Financial Protection Bureau indicates the CFPB remains on schedule on a handful of mortgage-related rulemakings, including an eventual rule implementing Dodd-Frank Act changes to the Home Mortgage Disclosure Act. The good news for the mortgage industry is that the bulk of Dodd-Frank-required mortgage rules have already been issued. On the HMDA front, the CFPB recently convened...
Aurora Loan Services, once a huge player in the non-agency subprime and Alt A market, has agreed to resolve a class-action lawsuit alleging it duped distressed borrowers into paying monthly fees on nonperforming loans that were already destined for foreclosure. The $5.3 million settlement will be split among 15,000 California borrowers who signed bogus loan-workout agreements with the false hope of curing their deficiencies and keeping their homes. Borrowers claimed that Aurora had misled them into thinking that their foreclosures were on hold while they were being considered for loan modification. In reality, however, Aurora’s policy was...
There has been a resurgence of city lawsuits lately against major banks seeking to recover lost property tax revenues, which city officials say were needed to pay for expensive foreclosure-related city services. The latest in these lawsuits was filed by the City of Los Angeles against JPMorgan Chase alleging discriminatory mortgage lending led to a wave of foreclosures that continues to diminish revenue for basic city services. The new litigation against Chase comes...
When it comes to the legal theory of disparate impact and the Supreme Court of the United States, perhaps the third time around will be the charm. Recently, the Texas Department of Housing and Community Affairs requested the nation’s highest court to agree once again to take on the issue of disparate impact under the Fair Housing Act. The questions presented to the high court in Texas Department of Housing and Community Affairs, et al., Petitioners v. The Inclusive Communities Project, Inc. are...
Lenders that upstream product to the megabanks through correspondent loan sales are beginning to worry that because profits were so weak during the first quarter – or nonexistent – they might be cut off as sellers. Moreover, lenders fret that some of the largest players might shut the door on them for a different reason: they can’t deliver enough volume in an origination-challenged market. Speculation has focused...
Progressive policy groups and low-income housing advocates ramped up their calls for Fannie Mae and Freddie Mac to honor their legislatively mandated affordable housing commitment to finance the National Housing Trust Fund, and industry observers speculate that the government-sponsored enterprises’ regulator is inclined to reverse course … when the timing is right. Two weeks ago, a letter spearheaded by the Center for American Progress with a dozen co-signers renewed calls to Federal Housing Finance Agency Director Mel Watt to lift the GSE funding moratorium and begin channeling funds to the National Housing Trust Fund and the Capital Magnet Fund. Notably absent from Watt’s first major policy speech as FHFA director last month was...
While lenders affiliated with homebuilders tend to lend to riskier borrowers than other originators, their mortgages actually perform better, according to new research published by the Federal Reserve Bank of Chicago. The researchers suggest that the stronger performance is related to the hands-on nature of homebuilder lending, among other factors. The Chicago Fed published the findings in a study authored by Sumit Agarwal, Gene Amromin, Claudine Gartenberg, Anna Paulson and Sriram Villupuram, who note that their findings run counter to assumptions about the quality of builder-affiliate originations. “At first glance, the allegations of the nefarious role played by the homebuilders in the crisis are consistent...
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