The Consumer Financial Protection Bureau has provided some potentially significant insight into some of the positions it may end up taking on the rules that will govern the final integrated mortgage disclosure it’s developing. The disclosures were released as part of the CFPB’s announcement that it is putting together a Small Business Review Panel under the provisions of the Small Business Regulatory Enforcement Fairness Act. The panel is part of the broader initiative to integrate the mortgage disclosure forms that borrowers receive when applying for and closing on a loan...

Last week, the Federal Reserve Board released action plans that Bank of America, Citigroup, EverBank, JPMorgan Chase, MetLife, PNC, SunTrust, US Bancorp and Wells Fargo developed and will have to implement per the consent orders issued last April in order to correct alleged deficiencies in residential mortgage loan servicing and foreclosure procedures. The Fed also released engagement letters between the institutions and the independent consultants they retained to review foreclosures that were in process in 2009 and 2010...

Bank of America may be prepared to pony up $8.5 billion to settle litigation with residential mortgage-backed securities investors, but it’s not conceding a point in the face of government accusations that it discriminated against mortgage borrowers with disabilities. Last week, the Department of Housing and Urban Development accused the bank of imposing unnecessary and burdensome requirements on borrowers who depended on disability income to qualify for their mortgages in violation of the Fair Lending Act. The bank also allegedly required some disabled borrowers to provide physician...

The Department of Housing and Urban Affairs and the U.S. Attorney for the Southern District of New York compelled Flagstar Bank FSB, one of the nation’s largest savings banks and originators of mortgage loans, to admit it provided false certifications to HUD in violation of the False Claims Act when seeking government insurance for residential mortgages. The government agencies said the false certifications induced FHA to accept loans for government insurance that were not eligible and that resulted in losses to HUD when the loans defaulted...

Citigroup, Inc. was recently stung with a $158.3 million settlement and compelled to admit culpability to settle with the Justice Department and the Department of Housing and Urban Development after a former CitiMortgage employee raised concerns about the lender’s allegedly reckless mortgage lending practices. The former employee, Sherry Hunt, filed a private whistleblower lawsuit last August under the False Claims Act, alleging that Citi subverted FHA to push through poorly underwritten mortgages for a higher profit margin. Two weeks ago, the U.S. government joined the suit, seeking...

The Supreme Court of the United States heard oral arguments last month in Freeman v. Quicken Loans (Case 10-1042), an important fee-splitting case under the Real Estate Settlement Procedures Act, and the initial consensus of leading industry attorneys following the case is that the high court appears to be favorably inclined towards Quicken’s side. “If questions raised by the justices are any indication of where the court is headed, I’d say the scales are tipped in the direction of a favorable decision for Quicken Loans,” said attorney Phillip Schulman, in the Washington, DC, office...

Consumer advocates may be railing against the $25 billion settlement the five largest mortgage servicers struck recently with 49 state attorneys general, but the participating banks are still vulnerable on a number of fronts, according to a top analyst at Moody’s Investors Service. On the one hand, “The settlement will have little to no financial effect on the banks and will remove some of the uncertainty surrounding mortgage servicing,” said Joseph Pucella, vice president and senior…

Some leading Republicans in the House of Representatives recently wrote Consumer Financial Protection Bureau Director Richard Cordray requesting additional disclosures about the agency’s pending budget. “[W]hile we commend the CFPB’s efforts to draft better and more detailed budget justifications, we believe that the budget justification that was released with the president’s fiscal year 2013 budget request is not as good as it could be,” wrote House Financial Services Oversight and Investigations Subcommittee Chairman Randy Neugebauer, R-TX,…

New Hampshire. In Dow v. Bank of New York Mellon Trust, the state Superior Court affirmed the role of MERS as the mortgagee of a mortgage loan, ruling that MERS has the authority to both hold and assign its interest in mortgages under state law. New Jersey. In U.S. Bank, N.A. v. Guillaume, the New Jersey Supreme Court last week ruled that state courts do not have to dismiss foreclosure actions if defects in the…

Consumer Financial Protection Bureau.Bureau to Deal With Forced-Placed Insurance. Officials at the CFPB recently indicated the bureau plans to address the practice of force-placed insurance by mortgage servicers. Although few details have been made available, the CFPB will reportedly require servicers to show they have a reasonable belief that borrowers have fallen behind on necessary payments before charging them for forced-place insurance. The bureau has indicated it intends to permit borrowers to choose their own insurance, instead of depending on the...