Federally regulated banking institutions may now hang the for rent sign on houses in their portfolio of residential other real estate owned properties as an alternative to selling difficult to move OREOs, according to new guidance released by the Federal Reserve. Last week, the Fed issued a policy statement reiterating that federal statutes and its own regulations permit the rental of residential properties acquired in foreclosure as part of an orderly disposition strategy. The general policy of the Federal Reserve is that banking organizations should make good faith efforts to dispose of...
A federal district court judge in Washington DC this week signed off on the proposed $25 billion settlement agreement between the federal government, state attorneys general and the top five mortgage servicers, putting in place a potential template for national standards for the mortgage servicing industry. On April 6, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia entered the proposed consent judgments against Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and Ally Financial, including a settlement term sheet and additional exhibits specific...
As the broadening of the governments Home Affordable Modification Program is in the midst of implementation, servicers need to focus on executing new guidelines. To that end, PricewaterhouseCoopers released analysis on the way the administrations modification program will impact servicers. Of the many programs and regulations in the works, including full-year forbearance, a homeowners bill of rights, real estate-owned rental programs and the joint investigation into mortgage-backed securities issues, the expanding HAMP eligibility is the only one considered high impact and in progress, making it...
Banks maintain real estate-owned properties unequally, with properties in minority communities showing clear signs of vacancy while those in white communities receive necessary attention, according to a new investigation by the National Fair Housing Alliance. The investigation, outlined in the report The Banks are Back Our Neighborhoods are Not: Discrimination in the Maintenance and Marketing of REO Properties, looked at 1,036 REO properties in nine different metro areas, comparing those in predominantly Latino and African-American neighborhoods to those in predominately white communities...
The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three non-public investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ...
In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ...
Iowa Attorney General Tom Miller, the lead official behind the recent $25 billion mortgage servicing settlement, told industry representatives last week that, unlike past agreements, the AGs are going to be sticklers for full and proper implementation this time around. Implementation is a very, very important aspect to our effort currently and going forward, Miller said to participants in a webinar sponsored by Inside Mortgage Finance, an affiliated publication. We put just an awful lot into this investigation and negotiations, and we dont want it to ...
Acting Comptroller of the Currency John Walsh reassured participants at an interagency conference on the Community Reinvestment Act last week that the enforcement orders federal bank regulators issued last year and the state attorneys general national mortgage settlement will work well together. Ive said from the beginning that it is not only possible, but absolutely necessary, that our separate actions be able to work well together. And I think weve succeeded in that, Walsh said. The steps we have each required servicers to take to fix the problems in servicing and foreclosure processing ...
PennyMac Loan Services has some unique loss-mitigation strategies, but Moodys Investors Service warned this week that some of the companys approaches are risky. Among other issues, PLS can require borrowers that otherwise would not qualify for a loan modification to deed their property to the servicer if the mod does not succeed. While this approach can improve loss mitigation performance or reduce timelines, Moodys believes these programs could result in borrowers and regulators challenging this practice as well as headline risk to the company, the rating service said. PLS has yet to employ the tactic. The warning from Moodys ...
Ocwen Financial has made a number of adjustments in recent months to better compete with other nonbank servicers. Perhaps most significantly, the special servicer has started to shift to an equity light business model. The shift occurred at the end of February when Home Loan Servicing Solutions completed a $186.2 million initial public offering. HLSS said it will use the proceeds to purchase the rights to receive servicing and other related fees, associated servicing advances and other related assets from Ocwen. HLSS was founded by William Erbey, chairman of Ocwen ...