After 11 months of negotiations, the odds that the multistate attorneys general talks with most of the nation’s top mortgage servicers will yield any substantive, long-term fruit seem to shrink daily, as officials from two states – including one of the biggest – have decided to bail, in lieu of possible independent litigation. “I have lost confidence that the banks will bring to the table an agreement that properly holds them accountable for wrongful foreclosures,” said Massachusetts Attorney General Martha Coakley, one of two state AGs to withdraw from the negotiations last week, along with California AG Kamala Harris. “Because our office for some time has anticipated that result, we have begun preparing for litigation.

The Consumer Financial Protection Bureau has developed a portal that companies can use to view and respond to entries in the new complaint database, Inside Regulatory Strategies has learned. “The company portal serves as the interface between the CFPB and financial companies, enabling companies to view and respond to complaints submitted by consumers,” the bureau said in a presentation to industry representatives recently. “Using the portal, companies should provide an explanation of the resolution and the actions taken in the consumer’s situation, select a resolution status for the complaint and attach relevant documents, if necessary.” The CFPB also maintains a consumer portal so complainants can check the status of their cases. Here’s an overview of the complaint process: A consumer files a complaint, then the CFPB routes the complaint to the company.

The U.S. Attorney’s office in Manhattan has entered into an agreement with the law firm of Steven J. Baum, one of the largest volume mortgage foreclosure firms in New York state, that requires the firm to pay $2 million to Uncle Sam and to extensively change its mortgage foreclosure practices. The agreement resolves an investigation into Baum’s mortgage foreclosure-related practices, specifically whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits and mortgage assignments in state and federal courts in New York.

President Obama’s nominee to head the new Consumer Financial Protection Bureau passed his first Congressional gauntlet last week, gaining the approval of the Senate Banking, Housing and Urban Affairs Committee, in spite of unanimous opposition from Republicans on the committee, who are more opposed to the CFPB than they are about whoever is nominated to run it. Late last week, the committee voted to send the nomination of Richard Cordray, currently the head of the agency’s enforcement division, to the full Senate on a straight party line vote 12-10. “Today’s Banking Committee vote on Richard Cordray is an important step forward for American consumers,” said Chairman Tim Johnson, D-SD. “The Consumer Financial Protection Bureau needs a director, and Mr. Cordray has proven he is qualified for the job. He should be confirmed by the full Senate as soon as possible.

The Multistate Mortgage Committee of the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators last week came out with examiner guidelines for use in reviewing non-depository mortgage loan originators’ and creditors’ compliance with the Federal Reserve Board’s mortgage loan originator compensation rules. The guidelines are intended to promote standardization and consistency within the state regulatory community regarding enforcement of the FRB’s rules. The Fed’s final rules for closed-end credit under Regulation Z introduced loan originator compensation restrictions to protect consumers against the unfairness, deception and abuse that can arise with certain loan origination compensation practices. The rules generally prohibit paying loan originators on the basis of loan terms and conditions, dual compensation to originators by consumers and any other person, and “steering” consumers to loans to receive greater compensation.

VA-approved lenders should not submit payments for loans closed on or after Oct. 1 until the impact of recent legislation passed by Congress and awaiting President Obama’s signature becomes clear, the Department of Veterans Affairs said in a recent notice. The legislation apparently provides higher funding fees for VA home loans, contrary to changes in funding fees announced by the VA in Circular 26-11-12 on Sept. 8. Lenders were advised not to act until further notice. If the President signs the legislation, it will, in effect, keep funding fees at their FY2011 rates through Nov. 17, 2011, the VA said. This means ...

Expanding approved lenders’ reach in originating FHA-insured single-family mortgage loans is a “positive step” in improving their ability to compete with non-approved and sponsored FHA originators, according to industry participants. The recently revised FHA policy eliminates the geographical restrictions imposed upon direct endorsement lenders, which limited their FHA originations to designated lending areas. Under the new policy, loan origination and servicing may be conducted from an approved lender’s home office, branch office or direct lending branch office. HUD no longer has to approve a lender’s branch office facilities. However, all office facilities, regardless of type, must ...

The FHA is seeking legal opinion on whether Congress can grant it authority to bar any former executive of a defunct lender from participating in FHA programs for material violation of agency requirements. The Department of Housing and Urban Development’s Office of General Counsel is pondering the question in the wake of an internal report on the FHA’s inability to prevent former executives of defunct mortgage companies that failed to indemnify HUD on FHA losses from reentering the FHA program. The report from HUD’s Inspector General said 12 corporate officers have signed on to new mortgage firms with ...

A proposed FHA rule on “seller concessions” recently listed as withdrawn from the Office of Information and Regulatory Affairs’ review process is now being cleared for issuance by the Department of Housing and Urban Development. FHA spokesman Lemar Wooley clarified that the long-awaited proposal was not withdrawn as reported but “delayed” as a routine requirement for an Economic Impact analysis. “But now it is moving again,” he explained in an email. “It is in the clearance process and we hope to publish a proposed rule before the end of the year. According to Wooley, the proposed rule would ...