A number of colleagues of former Ohio Attorney General Richard Cordray made a media and lobbying blitz last week, writing Senate leadership to urge their comrade be confirmed as the director of the Consumer Financial Protection Bureau, and holding a conference call with members of the press to highlight their appeal. Writing Senate Majority Leader Harry Reid, D-NV, and Senate Minority Leader Mitch McConnell, R-KY, many members of the National Association of Attorneys General went to bat for one of their own, calling him “both brilliant and balanced.”

Alabama. Last week, in Reed v. Chase Home Finance LLC, the U.S. District Court for the Southern District of Alabama rejected a mortgage lender defendant's motion to dismiss or amend a putative class action alleging a violation of the Truth in Lending Act. Plaintiff Reed alleged defendant Chase Home Finance failed to provide the borrower with notice that it was a new creditor as required by TILA Section 1641(g) when it was assigned an ownership interest in plaintiff's mortgage and note. The defendant argued that plaintiff’s position that the note was assigned to defendant, explicitly pled in the complaint, has to be “supported by factual material rendering the assertion plausible.”

Federal Housing Finance Agency. HARP Changes Announced. With a chorus growing inside the Washington, DC, beltway that the Obama administration must do more to help struggling homeowners refinance, the Federal Housing Finance Agency this week announced a number of changes to the Home Affordable Refinance Program in an effort to attract more eligible homeowners who can benefit from refinancing their mortgages. HARP is the only refinance program that enables underwater borrowers to take advantage of low interest rates and other refinancing benefits that would otherwise be beyond their reach in a more normal market environment. This program will continue to be available to borrowers with loans sold to Fannie or Freddie on or before May 31, 2009, with current loan-to-value ratios above 80 percent.

The U.S. Senate voted late last week to approve an amendment to a federal spending bill that was offered by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, to reinstate the higher loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration that expired on Sept. 30. Those limits dropped to $625,500 in a number of high-cost markets on Oct. 1, and would be restored to $729,750 through December 2013 under the Menendez/Isakson amendment. The National Association of Home Builders was pleased.

Federal regulators ran into such a buzz saw of opposition on their proposed implementation of Dodd-Frank Act risk-retention rules for securitization that they may start over again with a new proposed rule, according to industry experts at the ABS East conference sponsored by Information Management Network. The market would be better off if regulators abandoned the risk-retention rule altogether, said Steven Kudenholdt, co-chair of capital markets practice at SNR Denton. He doubts that regulators can get it right, and the proposal has been a “distraction” for a market that’s still in distress. Throwing in...

Most of the major players in mortgage securitization support some of the new disclosures floated by the Securities and Exchange Commission in its revised shelf eligibility proposed rule – with a number of key changes and clarifications. Reflecting the investor’s perspective, the Asset Management Group of the Securities Industry and Financial Markets Association again “enthusiastically supported” the SEC’s proposal to mandate standardized disclosure at the asset level, believing that all of the asset-level data fields should be mandatory. “Well functioning markets require the disclosure of as much relevant asset-level data as...

A regulatory scare from the Securities and Exchange Commission may end up being much less of a challenge for real estate investment trusts than the stiff competition they face from bank portfolios, according to experts at the ABS East conference sponsored by Information Management Network this week in Miami Beach, FL. In September, the SEC rattled the mortgage REIT sector – which has struggled to gain a foothold in the nonconforming mortgage market – by launching a formal fact-finding mission on maintaining the exemption REITs enjoy from the Investment Company Act. ...

Several large banks and mortgage companies are accused of cheating military veterans and taxpayers out of millions of dollars by hiding illegal fees in VA refinance transactions and of deliberately misleading the government to obtain guarantees for the refinanced loans. Three law firms – Butler Wooten & Fryhofer and Wilbanks & Bridges in Atlanta and Phillips & Cohen in Washington, D.C. – have teamed up to pursue the “qui tam” or whistleblower lawsuit on behalf of two mortgage brokers and the U.S. government. The brokers, Victor Bibby and Brian Donnelly, brought the lawsuit under the False Claims Act, a federal law that goes back to the Civil War when it was used to ...

The Department of Veterans Affairs has issued guidance explaining the confusion in the last couple of weeks caused by conflicting VA regulations and legislation. The latest guidance from the VA, Circular 26-11-16, updates the method for calculating funding fees based on a provision in H.R. 2646, the Veterans Health Facilities Capital Improvement Act of 2011, which President Obama signed into law on Oct. 5. H.R. 2646, which sets funding for the construction of various VA medical facilities, also provides for higher funding fees for VA loans, contrary to funding fee changes announced by the VA on Sept. 8. Previous VA guidance notes ...

The Department of Housing and Urban Development is a step closer to leveling the playing field for FHA lenders but there is more to be done, according to a recent analysis by K&L Gates. Recent changes announced by HUD are a good start to setting right the unintended adverse effects of last year’s changes to FHA’s lender-approval requirements, but HUD needs to do more to implement these changes fully, concludes the analysis. Authors Krista Cooley, Holly Spencer Bunting and Kathryn Baugher, all attorneys with K&L Gates, said future pronouncements from HUD should provide additional guidance on how to address the inequities between third-party originators and FHA-approved lenders with regards to ...