The Securities and Exchange Commission’s no-action letter that cleared the way for the Royal Bank of Scotland to register public offerings of covered bonds is likely to fuel demand for U.S. dollar-denominated covered bonds, according to Fitch Ratings. The SEC letter paves the way for issuers to offer covered bonds to a wider range of investors than previous bonds issued under the restrictive Rule 144A of the Securities Act of 1993, said Fitch analyst Vanessa Purwin. The rule provides a safe harbor from registration requirements for certain securities that are resold privately to qualified large...

Last week’s launch of the RMBS Working Group’s website demonstrated that government investigators see Wall Street insiders as a valuable source of information to detect and prove fraud and other misconduct in the packaging of mortgage securities. “Fraud can be hard to uncover without help from whistleblowers who were corporate insiders,” the task force said on the website. Whistleblowers can get rewards of up to 30 percent of the government’s monetary recovery based on the specific information, as well as protection from retaliation. The inclusion of a whistleblower provision in the Dodd-Frank Act has...

Nonbank venture capital funds that see opportunity in the expected pullback of banks from the $10 trillion mortgage servicing rights sector likely will not dodge the growing regulatory compliance burden that has become one motivation for banks to pull out of the business. Nationstar Mortgage Holdings, a unit of Fortress Investment Group that was taken public in March, is on pace to become the largest nonbank servicer in the industry if it succeeds in buying the mortgage servicing portfolio of GMAC Mortgage and Residential Capital. Nationstar CEO Jay Bray recently went on record saying he expects...

The mortgage lending industry won a comprehensive and authoritative victory and a great deal of legal certainty from the Supreme Court on the issues of fee-splitting and markups under the Real Estate Settlement Procedures Act. Last week, in Freeman et al. v. Quicken Loans Inc., the nation’s highest court unanimously sided with the lender and ruled that a plaintiff has to show that a fee charged for a real estate settlement service was shared between two or more persons to prove a violation of Section 8(b) of RESPA has occurred. In this case, the plaintiffs were three couples, the Freemans, Bennetts...

The Federal Housing Finance Agency’s seasonally adjusted purchase-only house price index rose 0.6 percent in the first quarter of 2012. Seasonally adjusted house prices were up 0.5 percent year over year for the period, the first such increase seen since 2007.The U.S. housing market is looking better, with April's housing starts near the highest levels in over three years and showing signs of growth, according to economists at BMO Harris Bank in Chicago. “After bottoming in 2009, the U.S. housing sector has had little to no substantial growth; however, today’s housing...

Federal Reserve Board. Fed Pushing Independent Foreclosure Review. The Federal Reserve last week released a new video on its website and on YouTube that explains to borrowers facing foreclosure how they can apply for a free, independent foreclosure file review. The video, available in English and Spanish, reminds borrowers that they may be eligible to receive compensation if the independent review finds evidence of direct financial injury due to servicer error. Borrowers are eligible for a review if their primary residence was...

Alabama. The state recently enacted Senate Bill 347, which sets the procedures a borrower is to use to obtain a payoff statement for a residential mortgage, including the form of such a request and deadlines for responding to a request, as well as the method for providing the statement. Senate Bill 347 also mandates that a secured creditor has to record a mortgage satisfaction within 30 days after receipt of full payment and performance of the obligation. The bill also creates a process for enforcing the recording requirement. The bill’s provisions are effective...

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...

Complying with all the requirements of the Real Estate Settlement Procedures Act under the new Consumer Financial Protection Bureau is going to be a much different ballgame than had been the case when the Department of Housing and Urban Development was calling the shots, a leading industry attorney indicated recently. “The bottom line on RESPA enforcement [at the Consumer Financial Protection Bureau] is that there are many enforcement powers and authorities at the bureau’s disposal,” Holly Spencer Bunting, a partner in the Washington, DC, office of K&L Gates LLP, told participants...