As IMFnews reported recently: one nonbank lender had a $910,000 jumbo mortgage rejected by a secondary market buyer because of a $19 TRID-related mistake on the disclosure form.
In 1Q, the residential MBS sector was down 7.1 percent from 4Q15 with $277.05 billion in new issuance. It was the lowest output since the second quarter of 2014...
As the non-conforming secondary market continues to grapple with headaches surrounding TRID errors and scotched jumbo deals, another storm may be brewing: whether Fannie Mae and Freddie Mac are buying loans that – if tested properly for violations – would reveal flaws. The good news for the lending industry is that the government-sponsored enterprises are not now conducting routine post-purchase file reviews for technical compliance for TRID errors. The GSEs now are just checking to make sure the new consumer disclosures, which merge the requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act, are being used. Still, that has not prevented...
Litigation over legacy residential MBS deals that went sour in the run-up to the financial crisis continued last week, as California Attorney General Kamala Harris sued investment bank Morgan Stanley for alleged misrepresentations about RMBS investments, which she said contributed to huge losses by investors such as the state’s public pension funds. In what is just the second such use of the False Claims Act by a state, Harris’ complaint, filed in San Francisco Superior Court, alleges that Morgan Stanley violated the FCA, as well as California securities law and other state laws, by allegedly hiding or downplaying the risks of complex investments involving large numbers of underlying loans or other assets. Harris used...
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