Castle & Cooke Mortgage late last month filed a motion to dismiss a putative class-action brought by one of the aggrieved parties who had already been compensated under the terms of the settlement the lender reached late last year with the CFPB. In Luis Cabrales v. Castle & Cooke Mortgage LLC, plaintiff Luis Cabrales contends that the lender improperly compensated its loan officers by giving them bonuses for putting customers in more expensive loans than what they qualified for. The plaintiff sued for violation of the Truth in Lending Act – a claim that Castle & Cooke is not challenging at this point. However, Cabrales also brought other causes of action: violation of Section 8 of the Real Estate Settlement Practices ...
Disparate Impact Theory of Legal Liability Struck Down. Last week, the U.S. District Court for the District of Columbia dealt a heavy blow to the position of the Department of Housing and Urban Development – as well as the CFPB – that disparate impact claims are cognizable under the Fair Housing Act. In American Insurance Association v. U.S. Department of Housing and Urban Development, the judge struck down HUD’s disparate impact rule, determining that the Fair Housing Act prohibits “disparate treatment only.” In promulgating its disparate impact rule, the court said HUD exceeded its authority under the Administrative Procedures Act. “The ruling is in line with what we have long believed the law to be and consistent with what we argued in ...
Jaron Van Maanen of the FDIC said the lender should determine if the factor determining the LO’s comp consistently varies with terms over a significant number of transactions...
Bank of New York Mellon is looking to increase its master servicing activity on residential mortgages, according to officials at the firm that acquired the master servicing unit from JPMorgan Chase in October 2006. However, BNYM is up against stiff competition, including Wells Fargo, a dominant presence in master servicing for non-agency MBS. BNYM is focusing on growth opportunities from managing new funds in traditional residential mortgages as well as new loan types, according to a recent report by Fitch Ratings. In September, Fitch downgraded BNYM’s master servicer rating due to compliance issues, organizational changes and low activity in recent years. The firm has...
Ally Financial recently received subpoenas and document requests from the Securities and Exchange Commission and the Department of Justice over a broad array of lending and securitization activities, the company revealed in a recent Form 10-Q disclosure filed with the SEC. “The subpoenas and document requests from the SEC include information covering a wide range of mortgage-related matters, and the subpoenas received from the DOJ include a broad request for documentation and other information in connection with its investigations of potential fraud and other potential legal violations related to MBS, as well as the origination and/or underwriting of mortgage loans,” the company said. In addition, Ally recently received...
The mortgage industry cannot and should not wait for Congress to get around to a legislative solution to the government-sponsored enterprises when much of what is necessary can be accomplished administratively, according to experts at a forum hosted by the Urban Institute and CoreLogic. Andrew Davidson, president of Andrew Davidson & Co., noted that among the lessons of this year’s failure to launch a Senate GSE reform bill is that lawmakers find it easier to agree on a set of principles for a mortgage finance system than on the system’s design. With legislation a long shot before the 2016 presidential elections, Davidson said...
Originations by nonbanks of loans that don’t meet standards for qualified mortgages are off to a slow start, according to industry participants. “There is obviously a lot of noise in the area, a lot of announcements about people getting involved. And from what we have seen, there is nothing of any size and replicable flow that seems readily securitizable,” Michael Commaroto, CEO of Apollo Residential Mortgage, said this week during a call with investors. He said ...
Lenders can vary the compensation paid to loan originators for portfolio loans versus originations of mortgages to be sold to investors, but only in certain circumstances, according to officials at the Federal Deposit Insurance Corp. The LO compensation rule issued by the Consumer Financial Protection Bureau in 2013 provides a two-part proxy analysis to determine whether LO comp can be based on certain factors. FDIC officials addressed questions regarding the LO comp rule in a recent webinar ...
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