The Consumer Financial Protection Bureau this week detailed servicing rules it will soon propose regarding disclosures to borrowers and servicing procedures. “The mortgage servicing rules we are considering reflect two basic, common sense standards – no surprises and no runarounds,” CFPB Director Richard Cordray said. “They would apply to all mortgage servicers regardless of how they are organized, including banks, thrifts, credit unions and nonbank servicers.” The rule, which will amend the Truth in Lending Act and Real Estate Settlement Procedures Act, is required by the Dodd-Frank Act. The CFPB said it will publish a proposal ...

Some liberal interest groups are questioning whether the RMBS working group formed by federal and state enforcement agencies to coordinate securitization investigations is moving fast enough. In an email circulated earlier this week, CREDO, a progressive network, wrote that the Department of Justice has yet to deliver on its promise of 55 investigators to the RMBS working group. As federal and state enforcement agencies were wrapping up the contentious $25 billion settlement with five mortgage servicers in late January, U.S. Attorney General Eric Holder announced a new task force designed to “stream...

A legal action brought by a group of four pension funds against Bank of New York Mellon alleging that the bank failed in its role as trustee to Countrywide MBS investors will proceed in federal court, albeit on much narrower grounds, a U.S. District Court judge has ruled. Last week, Judge William Pauley of the U.S. District Court for the Southern District of New York reduced “with prejudice” the number of Countrywide MBS trusts on which the plaintiffs could sue from 530 to 26. The case is Retirement Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago, et al v. the Bank of New York...

Fannie Mae and Freddie Mac have generally made exceptions to their own rule regarding title impediments for properties with oil, gas, water or mineral rights, though new environmental disputes over hydraulic fracturing may change that, with “confounding implications for a particular region’s lenders,” said rating service DBRS. While contracts that allow for parties other than the property owner to utilize the land often complicate matters, the profitability of leases for resources like natural gas make those properties more attractive, because “the lease would generate income the borrower could apply...

The mortgage banking industry got some advance notice this week on the direction the Consumer Financial Protection Bureau plans on taking when it issues a mortgage servicing proposed rule later this summer. The CFPB said it wants to design mortgage servicing rules to keep mortgage borrowers from getting stuck with costly surprises because of a lack of transparency or getting the runaround from their mortgage servicer because of a lack of accountability. “In recent years, many borrowers have complained that they did not receive the information they needed to help avoid foreclosure,” CFPB Director Richard...

A conflict-of-interest provision in the $25 billion robo-signing settlement approved by the court last week could make it harder for independent settlement monitor Joseph Smith to organize an oversight monitoring team within the agreement’s timeline. Smith, North Carolina’s former commissioner of banks, may have to issue or seek clarifying guidelines that would allow him to recruit attorneys and other professionals for his monitoring team and begin a phased implementation of the settlement’s servicing standards and mandatory relief requirements, according to an industry attorney. Last week...

Banks maintain real estate-owned properties unequally, with properties in minority communities showing clear signs of vacancy while those in white communities receive necessary attention, according to a new investigation by the National Fair Housing Alliance. The investigation, outlined in the report “The Banks are Back – Our Neighborhoods are Not: Discrimination in the Maintenance and Marketing of REO Properties,” looked at 1,036 REO properties in nine different metro areas, comparing those in predominantly Latino and African-American neighborhoods to those in predominately white communities...

As the broadening of the government’s Home Affordable Modification Program is in the midst of implementation, servicers need to focus on executing new guidelines. To that end, PricewaterhouseCoopers released analysis on the way the administration’s modification program will impact servicers. Of the many programs and regulations in the works, including full-year forbearance, a homeowners’ bill of rights, real estate-owned rental programs and the joint investigation into mortgage-backed securities issues, the expanding HAMP eligibility is the only one considered “high impact” and in progress, making it...

A federal district court judge in Washington DC this week signed off on the proposed $25 billion settlement agreement between the federal government, state attorneys general and the top five mortgage servicers, putting in place a potential template for national standards for the mortgage servicing industry. On April 6, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia entered the proposed consent judgments against Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and Ally Financial, including a settlement term sheet and additional exhibits specific...

If mortgage lending profitability was directly correlated to an ability to respond satisfactorily to borrower complaints, a lot of mortgage bankers might be looking for a new line of work. In 768 cases (46.7 percent) initially tracked by the Consumer Financial Protection Bureau, mortgage lenders reported they closed a consumer complaint without providing any relief whatsoever, according to the bureau’s first semi-annual report to Congress, submitted to the House Financial Services Committee last week. Credit card gripes, on the other hand, were closed without any reported relief in 27.7 percent of the...