Lawmakers in California this week pulled from their agenda a series of bills designed to help borrowers in a significant, if temporary, victory for the mortgage industry in the long drawn-out legal battles spawned by the mortgage collapse in 2008. The proposed California Homeowner Bill of Rights featured many of the requirements that have been incorporated in evolving national servicing standards. One new provision would require servicers to pay a $25 fine each time a borrower defaults; the money would go to a fund to investigate fraud. But two of the six bills in the package were suddenly pulled from...
The mortgage lending industry is apprehensive about the multitude of mortgage servicing rules coming its way, and that anxiety is probably well justified, leading industry representatives suggests. Beyond last years consent orders and last months $25 billion mortgage servicing settlement and all the ramifications they have for industry servicing practices going forward, the most immediate concern has to do with a proposed rule on mortgage servicing due out this summer from the Consumer Financial Protection Bureau. Last week, the CFPB made a public pre-announcement of the...
The Federal Reserve Board recently brought a consent order against Morgan Stanley to deal with what it characterized as a pattern of misconduct and negligence in residential mortgage servicing and foreclosure processing at the Wall Street firms Saxon Mortgage Services subsidiary, once the 34th largest mortgage servicer in the United States. As noted in the announcements relating to the 2011 enforcement actions, the Federal Reserve believes monetary sanctions are appropriate and plans to announce monetary penalties in these cases, the Fed said. The monetary penalties...
The Securities and Exchange Commission has charged two officials of Houston-based bank holding company Franklin Bank Corp., with setting up increasingly aggressive loan modification programs during the last six months of 2007 to hide from investors the true amount of the banks nonperforming assets and to artificially inflate Franklins net income and earnings. According to the SEC, CEO Anthony Nocella and CFO Russell McCann instituted three loan modification schemes that caused Franklin to account for its significantly increasing portfolio of delinquent...
U.S. District Court for the District of Columbia. Mortgage Servicing Settlement Approved. Earlier this month, the U.S. District Court for the District of Columbia gave its approval to the consent orders that make up the $25 billion mortgage servicing settlement by federal regulators and 49 state attorneys general into alleged mortgage-related violations by the nationfs five largest mortgage servicers. The federal agencies that signed on to the settlement are the Department of Justice, the Department of Housing and Urban Development, the Department of Treasury...
Bank and thrift holdings of home-equity loans continue to decline, particularly holdings of closed-end second liens. Even though performance on the loans currently remains strong, industry analysts warn that these assets could cause major losses. Banks and thrifts held $1.18 trillion in home-equity lines of credit, unused HELOC commitments and closed-end seconds at the end of 2011, according to the Inside Mortgage Finance Bank Mortgage Database. That was down 1.5 percent from the third quarter of 2011 and down 8.8 percent from the end of 2010 ... [Includes one data chart]
The Consumer Financial Protection Bureau this week detailed servicing rules it will soon propose regarding disclosures to borrowers and servicing procedures. The mortgage servicing rules we are considering reflect two basic, common sense standards no surprises and no runarounds, CFPB Director Richard Cordray said. They would apply to all mortgage servicers regardless of how they are organized, including banks, thrifts, credit unions and nonbank servicers. The rule, which will amend the Truth in Lending Act and Real Estate Settlement Procedures Act, is required by the Dodd-Frank Act. The CFPB said it will publish a proposal ...
Ocwen Financial last week completed its acquisition of mortgage servicing rights from Morgan Stanleys Saxon Mortgage Services. Ocwen won some concessions from the seller since the sale was announced in October, though the servicer also faces criticism regarding its expanding portfolio. Ocwen acquired MSRs with an unpaid principal balance of $22.2 billion, largely comprised of non-agency mortgages. Ocwen had been subservicing $9.9 billion of the MSRs. Ocwen also acquired $2.7 billion in subservicing agreements from Saxon. The base purchase price for the Saxon transaction was ...
The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUDs new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...
The mortgage banking industry got some advance notice this week on the direction the Consumer Financial Protection Bureau plans on taking when it issues a mortgage servicing proposed rule later this summer. The CFPB said it wants to design mortgage servicing rules to keep mortgage borrowers from getting stuck with costly surprises because of a lack of transparency or getting the runaround from their mortgage servicer because of a lack of accountability. In recent years, many borrowers have complained that they did not receive the information they needed to help avoid foreclosure, CFPB Director Richard...