A Manhattan federal judge earlier this month dismissed a class-action lawsuit against Standard & Poor’s Financial Services after finding no evidence that the rating agency defrauded investors when it gave a favorable rating to Fannie Mae stock prior to the financial crisis.The suit, filed in December 2012 on behalf of potentially hundreds of thousands of investors who bought stock in an offering by Fannie in May 2008, four months before the GSE was taken over by the government, alleged that S&P knowingly misrated Fannie’s stock. Valued at about $25 per share when it was issued, the stock dropped to about $3 per share after Fannie’s government conservatorship began in September 2008.
Consumer complaints filed with the Consumer Financial Protection Bureau about their residential mortgages fell to 12,531 during the second quarter, down 9.2 percent from the first three months of the year, according to an analysis of the bureau’s complaint database by Inside the CFPB, an affiliated publication. That rate of decline is better than the overall 8.2 percent drop in complaints seen across all financial services product lines in aggregate, but not as good as the declines related to ...
While new regulations have been costly for servicers to implement, they have helped improve borrower satisfaction, according to J.D. Power’s latest primary servicer satisfaction study. “The fact that satisfaction continues to increase seems to indicate that changes being made in response to these new regulations are having a positive impact on the experience of customers,” said Craig Martin, director of investment services at J.D. Power. He cited regulations from the Consumer Financial Protection Bureau ...
The high-stakes game of chicken Congressional Democrats and Republicans have been playing for the better part of the last two years over President Obama’s nomination of Richard Cordray to be director of the Consumer Financial Protection Bureau came to an end this week as GOP members of the Senate blinked first. On Tuesday, the Republicans agreed to allow an up-or-down vote on Cordray to avert a showdown over longstanding filibuster rules in the Senate. Sen. Majority Leader Harry Reid, D-NV, has been threatening to upend the Senate’s traditional filibuster mechanism and change the rule under which presidential nominees must receive 60 votes in order to be approved. Cordray’s nomination to a full five-year term was approved...
Compliance experts are urging FHA lenders to express their concerns about a potential new enforcement regime the Department of Housing and Urban Development has proposed that could raise the risks of doing business with the FHA. The HUD proposal, which was published as a notice in the Federal Register with a comment deadline of Sept. 9, seeks comment on measures that would further enhance quality assurance in origination, underwriting and servicing. HUD has routinely used quality assurance methods, including routine and targeted audits, post-endorsement loan reviews and monitoring of early default and claim rates to evaluate lender compliance. Attorneys with K&L Gates cautioned...
The Consumer Financial Protection Bureau may have over-reached by extending its new bulls-eyes on debt collectors to mortgage servicers, according to some top mortgage industry attorneys. The CFPB last week warned all companies under its jurisdiction that they will be held accountable for unlawful conduct in collecting a consumer’s debts, citing its authority under the Dodd‐Frank Act, which prohibits “unfair, deceptive, or abusive” acts or practices (UDAAPs). Attorney Alan Kaplinsky, a practice leader in the Philadelphia office of the Ballard Spahr law firm, said it’s particularly significant that the bulletins not only address the conduct of debt collectors and debt buyers, but also are directed at creditors and servicers. CFPB Bulletin 2013‐07 makes...
The audience for the marketing of private-placement securities is set to increase due to changes approved last week by the Securities and Exchange Commission. Separately, the Financial Industry Regulatory Authority voted to increase transparency for consumer ABS private placements, prompting some to suggest that FINRA could also increase transparency for private-placement non-agency MBS. The SEC voted 4-1 to adopt a new rule to implement a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings offered under Rule 506. The SEC also amended Rule 144A, which covers private placements of non-agency MBS and other securities. Under the new rule, offers of 144A securities can be made...
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