Baron and Budd, a national plaintiffs’ law firm based in Los Angeles, is eyeing a possible class action against some top mortgage banks by investigating so-called equity accelerator programs, said to be offered by JP Morgan Chase, Citibank, Wells Fargo and numerous other banks and mortgage lenders. The programs are apparently being promoted as something that can help save substantial money on a home mortgage. However, the lawyers say banks are taking advantage of people enrolled in the program by failing to apply funds to the mortgage on the same day they are withdrawn from the customers’ accounts, meaning that consumers are essentially giving the bank a loan without their knowledge – and ultimately saving no money on their home mortgage.

The Stauffer and Nathan, P.C. law firm of Tulsa, OK, recently filed a federal class action in the U.S. District Court of the Northern District of Oklahoma against Wells Fargo and Experian, Equifax and Trans Union. The complaint accuses Wells of engaging in illegal mortgage servicing practices and “ramrod unlawful foreclosures” and alleges the major credit bureaus participated in erroneous credit reporting due to their “reckless failure to conduct independent investigations and just parroting the false and negative information supplied to credit bureaus by Wells Fargo.” The plaintiffs contend Wells Fargo “continues to engage in a free-for-all campaign to harass and disparage Oklahoma homeowners with unjustified foreclosure proceedings.” They also claim abuse of process, malicious prosecution, intentional infliction of emotional distress, and numerous violations of state and federal consumer protection statutes.

Bank of America’s 2008 purchase of Countrywide Financial Corp. continues to be an albatross around BofA’s neck, with U.S. Bancorp. filing suit against the largest lender in the land to compel it to repurchase mortgages sold by Countrywide back in 2005. U.S. Bancorp, which filed the lawsuit as a trustee on behalf of several unnamed investors, alleges breaches of representations and warranties, claiming Countrywide disregarded its own mortgage underwriting guidelines when it issued the loans at the center of the dispute. The 4,000 mortgages involved originally totaled $1.75 billion in principal. Countrywide agreed to buy back the loans within 90 days of the purchase date if any of the statements made in the loan contract were untrue, including an assertion that the loans complied with the bank’s underwriting guidelines, according to the complaint.

The National Association of Mortgage Brokers is tapping into national policymakers’ anxiety over job creation to press the Consumer Financial Protection Bureau to rescind its loan originator compensation rule. Ever since the early April implementation of the Federal Reserve Board’s Regulation Z Truth-in-Lending rule on steering and LO compensation, consumers have experienced a “dramatic increase in costs on their mortgages,” the NAMB said, and the regulation has become “a great impediment on the vital service of mortgage lending throughout local communities.” The group also complained about the overall regulatory compliance burden of a seemingly ever-increasing amount of regulations coming out of Washington, DC.

Federal Housing Finance Agency. HARP Being Re-Evaluated. The Federal Housing Finance Agency and the Obama administration are working together to take another look at the current Home Affordable Refinance Program to see if they can conjure up ways to extend the benefits of this refinance product to more borrowers. “FHFA is carefully reviewing the mechanics of the HARP program to identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP,” said Edward DeMarco, the agency’s acting director. “If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program's intent of assisting borrowers and reducing credit risk for [Fannie Mae and Freddie Mac], we will seek to do so. “Most creditworthy borrowers outside of the HARP program parameters and with positive equity should be able to refinance their mortgage through normal market mechanisms,” he added. “Indeed, since HARP’s inception [Fannie and Freddie] have completed more than 1 million streamlined refinances outside of HARP and nearly 7 million standard ‘rate and term’ refinances.”

The Homeowners Consumer Center is urging the U.S. Congress to immediately resurrect the homebuyers tax credit to help stabilize residential real estate markets throughout the country and to stimulate job creat “The reason the former attempt at a tax credit for homebuyers was not as successful as it could have been, is it was limited to first-time homebuyers only,” the group said. “We say give a $15,000 tax credit to anyone who is qualified to buy a house, including investors, and do it now.

The securitization market needs less uncertainty and a great deal more transparency in order to restore investor confidence and lure back private capital, industry executives told members of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. Witnesses testifying before the subcommittee, which held a field hearing in New York City, said the state of the securitization market remains uncertain, not just due to government subsidies crowding out any private sector action but also because hesitant investors do not yet see much improvement in the opaque environment that led to the...

Goldman Sachs has been ordered to retain an independent consultant to review foreclosure proceedings initiated by its former subsidiary, Litton Loan Servicing LP, under a formal enforcement action announced by the Federal Reserve Board last week. The firm was also required to provide financial remediation to affected borrowers. Additional monetary penalties are likely to be announced shortly. The Fed said it was acting against Goldman Sachs “to address a pattern of misconduct and negligence relating to deficient practices in residential mortgage loan servicing and foreclosure processing” involving Litton. Goldman sold...

Ginnie Mae in a conference call with its MBS issuers said it is going to be focusing its attention on new definitions related to data collection, and urged industry participants to provide feedback. Currently, the loan-to-value ratio definition stands as the ratio of the current unpaid principal balance amount to the appraised value, estimated value or purchase price of the property, and that value must include the upfront mortgage insurance premium. Under the new definition, however, the LTV ratio would be based on the original principal balance, said Ginnie officials. This includes any mortgage insurance premium to lower the sale price or...