A federal district court judge in Manhattan has named a lead master to review 9,342 mortgages for material breaches following a put-back trial against UBS Real Estate Securities. The trial in the U.S. District Court for the Southern District of New York will determine whether UBS breached certain representations and warranties and may have to repurchase the defective loans originally pooled in three trusts. U.S. Bank, the trustee for all three pools, is seeking more than $2 billion in damages, court filings show. U.S. Bank sued...
And since RBS is essentially owned by the British government, any settlement money will indirectly come from U.K. taxpayers. Who knows, maybe Adele, Paul McCartney and Elton John can chip in…
Presidential candidates Hillary Clinton and Donald Trump both want to promote homeownership, but they have different views on how to go about it. The Democrats’ platform supports giving “everyone a fair shot at homeownership” in America by putting them in a financial position to own a home, and preserving the 30-year fixed-rate mortgage while “modernizing” credit score models. The GOP platform assures voters that the “American Dream” of homeownership “is not a stale slogan,” ...
Mortgage lenders were making big strides in reducing the number of loan defects related to documentation just as the new integrated disclosure rule took effect, leading to a surge in compliance-related defects. That’s according to a new report based on an analysis of the post-closing quality control data associated with more than 50,000 mortgages that was performed by ACES Risk Management Corp., otherwise known as ARMCO, a provider of web-based audit technology ...
A GSE investor in Kentucky lost her case last week when the court dismissed claims that the government damaged Fannie Mae and Freddie Mac by implementing the net worth sweep of the GSEs’ profits. Arnetia Robinson alleged that her investments in Fannie and Freddie were “materially damaged” when the Federal Housing Finance Agency and the Treasury Department amended the existing preferred stock purchase agreement in 2012. According to court records, Robinson was seeking declaratory and injunctive relief that would prevent enforcement of portions of the PSPA. She contended that the sweep violates the Housing and Economic Recovery Act and said the Treasury acted “arbitrarily and capriciously.”
Plaintiffs in a Fannie Mae and Freddie Mac shareholder case challenging the GSEs’ quarterly earnings sweep dropped some of the charges in their original complaint to bypass the Federal Housing Finance Agency’s motion to consolidate all of the cases. The pair, Gary Hindes and David Jacobs, is looking to dismiss counts that allege derivative breach of contract and other similar claims and instead allege “unjust enrichment” against the Treasury Department. The plaintiffs bought the class action suit focusing on Delaware and Virginia corporate law on behalf of themselves and other stockholders. Court documents in David Jacobs and Gary Hindes v. The Federal Housing Finance Agency...
An increase in interest rates will help boost originations of non-agency nonprime mortgages, according to panelists at a webinar hosted by Inside Mortgage Finance this week. Higher interest rates will make it less attractive for prime borrowers to refinance, which could force lenders to look for volume elsewhere, including the nonprime market. Purchase mortgages account for a large share of the nonprime loans originated in recent years and higher interest rates could also increase nonprime mortgages aimed at debt consolidation. Matthew Nichols, CEO of Deephaven Mortgage, said...
The House Financial Services Committee this week marked up, mostly on party lines, a comprehensive alternative to the Dodd-Frank Act that would, among other things, create a legal safe harbor for mortgage loans that are originated by a lender and then held in portfolio on its balance sheet. Democrats unanimously opposed the bill and refused to offer a single amendment, continually railing against Wells Fargo and accusing the Republicans of wanting to take the nation “back to the regulatory Stone Age.” The bill passed...
The Federal Emergency Management Agency this week updated Senate lawmakers on efforts to produce more accurate flood maps and flood-risk models. A key change will shift flood-risk analysis and insurance pricing from the so-called 1 percent annual chance of flooding to the actual flood risk to the structure itself. Testifying before the Senate Committee on Banking, Housing and Urban Affairs, FEMA Administrator Roy Wright said adopting the structure-based methodology would require an entirely new approach in flood insurance rating and underwriting, including new regulatory hazard and risk products. Other witnesses at the hearing expressed support for the recommendation, saying it would remove the uncertainty caused by constantly changing flood lines in FEMA maps. The hearing is...
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