The case of Fairholme Fund v. The United States will continue to linger in the courts as the battle for getting the government to release the bulk of the documents pertaining to the preferred stock purchase agreements between the Federal Housing Finance Agency and the Treasury plays out with a motion filed this week. “We are now in a struggle with the defendants, both the Department of Treasury and FHFA, over claims of the deliberative process privilege they sought to keep from having to produce thousands and thousands of documents, even in redacted form,” Charles Cooper, attorney with Cooper & Kirk, the law firm representing the shareholder plaintiffs, told Inside The GSEs.
Fannie Mae won an appeal in which an apartment building that filed for bankruptcy to reduce payments it owed to Fannie did not act in good faith. According to a recent court ruling, the judge reversed the decision and said the bankruptcy court erred in allowing the plan in the first place. After missing one monthly payment of approximately $55,000 in December 2009, four months later the Memphis-based apartment company filed for bankruptcy under Chapter 11. The bankruptcy prevented Fannie from being able to foreclose on the apartment building. The apartment, Village Green, argued against the ruling, but the...
A U.S. Court of Appeals for the Federal Circuit recently upheld rulings that went against Mortgage Grader, a loan shopping website that has filed a number of patent-related lawsuits. The court upheld a ruling by a lower court that found that Mortgage Grader’s claims related to the “abstract idea” of anonymous loan shopping and that the patents obtained by the firm didn’t include an “inventive concept.” Mortgage Grader filed a lawsuit in January 2013 against Costco Wholesale and ...
The financial crisis has led to a broader, more demanding quality control process to ensure that mistakes are never repeated and that financial institutions adhere strictly to compliance requirements. As a result, mortgage lenders are much more vulnerable now to enforcement actions if they are found to have inadequate controls in place or to be noncompliant. One of the pitfalls lenders worry about is being held responsible – and potentially liable – for the actions of third-party ...
“When is enough, enough? Paying for past sins, sometimes before they were sins. I’m not speaking specifically about Wells Fargo, but in general.” – Marc Savitt, NAIHP president.
The ongoing decline in interest rates is wreaking havoc on the sale of “bulk” mortgage servicing portfolios, causing investors to pull back on pricing, and sending some bidders to the exits, at least for a little while. Servicing advisors who play in the space confirmed to Inside Mortgage Finance that pricing isn’t what it used to be, and is off peaks seen a year ago when bids – in retrospect – were too aggressive and later resulted in write-downs. Mark Garland, president of MountainView Servicing Group, Denver, admitted...
Steady growth over the course of 2015 may have taken the long-suffering mortgage servicing market close to the $10 trillion mark at the end of the year, according to a new analysis and ranking by Inside Mortgage Finance. The top 50 companies at 2015 serviced a combined $7.326 trillion in home mortgages, a slight 0.3 percent increase from the end of the third quarter. If the rest of the industry followed their lead, the supply of servicing outstanding rose to $9.982 trillion by the end of December. Based on trends during the first nine months of 2015, as reported by the Federal Reserve, the supply of home loan debt outstanding may have trickled...[Includes one data table]
Different factions of the mortgage industry are strongly urging the Consumer Financial Protection Bureau to place its yearend “clarifying letter” on TRID errors into the Federal Register, believing that it would provide stronger legal protection. According to interviews conducted by Inside Mortgage Finance, TRID errors – even minor ones – continue to be a chief reason why certain secondary market investors are rejecting mortgages, in particular non-agency product. The fear for these investors is assignee liability, that they could be sued for TRID errors even though they had nothing to do with the loan’s origination. One paragraph in the Dec. 29 letter from the CFPB to the Mortgage Bankers Association begins...
If lenders used the seemingly sensible underwriting standards that were in place in 2001, some 1.2 million more mortgages would have been originated in 2014, according to estimates by the Urban Institute’s Housing Finance Policy Center. Laurie Goodman, director of the HFPC, said lenders have “plenty of room to safely ease credit.” An underwriting index from the HFPC suggests that originators are accepting little risk in terms of borrower or loan characteristics, hindering a recovery in the mortgage market and the broader economy. Lenders note...
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