With his home state of Nevada leading the nation in foreclosures, Republican Sen. Dean Heller has introduced legislation that seeks to simplify and speed up the short-sale process via an amendment to the Truth in Lending Act. Heller has recently introduced SB 3177, the Stopping Ongoing Lender Delays Act (or SOLD Act). His legislation would require each servicer of a home mortgage to respond in writing within 30 calendar days to a mortgagor of a residential mortgage loan who has requested in writing a short sale of the dwelling or residential real property that is subject to the mortgage...

The U.S. Court of Appeals for the 11th Circuit recently reversed and remanded a lower court’s rejection of a Fair Debt Collections Practices Act claim, determining in Reese v. Ellis, Painter, Rattertree & Adams, LLP that the contents of a “dunning” notice from the lender’s foreclosing law firm amount to an effort to collect a debt under the act. In this case, the borrowers, Izell and Raven Reese of Roswell, GA, purchased a piece of property in 2004 with the help of a $650,000 loan from Provident Funding Associates, LP. To get that loan, the Reeses signed a promissory note and...

In Hogan v. Washington Mutual Bank, N.A. et al, the Arizona high court has dismissed the ‘show me the note’ claim in foreclosure litigation, throwing out a legal argument often used to block an impending foreclosure. “We granted review to decide whether a trustee may foreclose on a deed of trust without the beneficiary first having to show ownership of the note that the deed secures,” explained Arizona Supreme Court Chief Justice Rebecca White Berch. “We hold that Arizona’s non-judicial foreclosure statutes do not require the beneficiary to prove its authority or...

Last week, the Federal Reserve Board put out action plans for Citigroup and HSBC Finance Corp. to correct deficiencies in their residential mortgage loan servicing and foreclosure processing. These enforcement actions require the mortgage servicing subsidiaries to provide appropriate remediation to borrowers who suffered financial injury as a result of errors by the servicers. The Fed also released the engagement letter between Ally Financial Inc. and its independent consultant to review foreclosures that were in the firm’s pipeline in 2009 and 2010...

The Consumer Financial Protection Bureau has proposed procedures it plans to use in exercising its supervisory and enforcement authority over how nonbank consumer financial service companies (like mortgage lenders and mortgage servicers) control their third-party vendors, such as subservicers, foreclosure trustees and law firms, and force-placed insurers. It’s all about controlling the potential risk to consumers. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has authority to supervise any nonbank that it has “reasonable cause” to determine is posing a risk...

The Supreme Court of the United States last week sided with Quicken Loans while unanimously rejecting the legal arguments of two federal agencies in affirming a lower court’s determination that a plaintiff must prove a settlement fee was split by two or more persons in order to successfully stake a claim under the Real Estate Settlement Procedures Act. The relevant portion of RESPA at issue in Freeman et al. v. Quicken Loans Inc. is the provision that “[n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a...

Effective June 2012, Ginnie Mae will provide monthly disclosures about accumulated multiple issuer pool (MIP) activity in terms of dollar amount and number of loans as well as by pool term, pool type and security interest. The information provided will apply to issuances for the current month. The disclosure will provide issuers and investors additional insight into the multiple issuer pools in process. However, the information can change any time until the completion of the MIP process at the end of the month, Ginnie Mae cautioned. A final list will be ...

The FHA saw its total originations drop 5.4 percent in the first three months of 2012 compared to the same period last year but posted a modest gain on a quarterly basis, according to Inside FHA Lending’s analysis of FHA data. Excluding Home Equity Conversion Mortgage loans, FHA originations in the first quarter totaled $50.0 billion, of which 79.0 percent were originated in-house. Sponsored third-party originators accounted for the remaining 21.0 percent, or approximately $10.5 billion, data showed. Production jumped 12.0 percent in the first quarter of 2012 from $44.6 billion in the fourth quarter of 2011. The top 50 FHA lenders accounted for ... [With 1 chart]

Incentive payments to FHA servicers based on a compliance score will soon replace the current tier ranking-based inducements used by the Department of Housing and Urban Development to reward above par servicer performance. In an update to its servicer evaluation process, HUD said implementation of the National Servicing Center’s Servicer Performance Scorecard (SPS) is underway and the transition from Tier Ranking System (TRS) incentive payment to an SPS payment scheme will be announced in a mortgagee letter as soon as the implementation is completed. In the future, the SPS may be used as ...

The Department of Housing and Urban Development is evaluating potential changes to its tough condominium requirements, some of which could be announced soon. A department spokesperson declined to comment on specific requirements that may be included in new guidelines but said the agency is working to respond to industry concerns. Industry observers say the rules, which HUD put in place in 2009, have left many condominium units ineligible for FHA-insured financing. Condominium association boards have been ...