Legacy-era non-agency MBS litigation continues to be a ripe field of opportunity for U.S. regulators and industry attorneys alike, years after the financial crisis and Great Recession ended, thanks to some key recent judicial rulings. Late last month, Judge Alvin Thompson of the U.S. District Court for the District of Connecticut gave the green light to the Federal Housing Finance Agency to continue to pursue its claims against the Royal Bank of Scotland. The regulator for Fannie Mae and Freddie Mac alleged that RBS provided misleading statements related to $32.1 billion in RMBS the bank sold to the two government-sponsored enterprises between 2005 and 2008. The thrust of the FHFA’s complaint is...

Federal regulators have implemented a number of rules in recent years aimed at moving banks away from a reliance on credit ratings when making investing decisions. Officials at the Federal Deposit Insurance Corp. stress that if a bank’s management doesn’t have comprehensive understanding regarding a security, the bank shouldn’t invest in the MBS or ABS. “The gist of these new requirements is simple: banks should understand the risks associated with the securities they buy and should have reasonable assurance of receiving scheduled payments of principal and interest,” said Robert Hendricks, capital markets policy analyst at the FDIC. In an FDIC report, Hendricks provided...

Members of Congress from both sides of the aisle – and even some regulators – are pushing for legislation to broaden the types of loans that receive protections allotted to qualified mortgages. A number of issues remain in flux, including how widely the expanded QM definition would be applied and whether there is enough urgency to pass a bill before the end of the year. Last week, Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., detailed ...

Lawsuits filed by the city of Miami against Bank of America, Citigroup and Wells Fargo were revived by an appeals court this week. The fair housing lawsuits allege a decade-long pattern of discriminatory lending that caused the city economic harm. The lawsuits were filed in December 2013. Miami claimed that predatory lending by the banks caused minority-owned properties in the city to fall into unnecessary or premature foreclosure, which deprived Miami of tax revenue and forced the city to spend more on municipal services to combat blight. The city made claims under the Fair Housing Act and state law. The city backed up...

Federal regulators and fair housing advocates are calling for continued vigilance in fair lending with the reappearance of mortgage redlining and loan steering. The return of pre-crisis predatory lending practices, like steering and redlining, pose new challenges to the mortgage industry and to minority communities, which have seen their home equity disappear with the collapse of the housing market, said participants in a fair-lending conference hosted by the Department of Housing and Urban Development. Credit scores raise...

The Federal Financial Institutions Examination Council should institute an official transition period to provide lenders greater clarity and certainty in anticipation of the CFPB’s new TILA/RESPA integrated disclosure rule (TRID) slated to take effect Oct. 3, the American Bankers Association said in a letter to the financial regulatory group. The CFPB is one of the regulatory bodies that comprise the FFIEC. “We request that the FFIEC – on behalf of all banking regulators – formally establish a transition period and clarify how regulators will oversee and examine regulated institutions for TRID compliance during this time,” the ABA said in a recent letter to the council. “In so doing, the FFIEC would provide needed certainty to the credit markets and encourage lenders to ...

A number of consumer-oriented organizations are urging members of Congress to defeat H.R. 1737, the “Reforming CFPB Indirect Auto Financing Guidance Act,” legislation they say would cripple the bureau’s ability to act against discriminatory auto lending practices. H.R. 1737, introduced this spring by Rep. Frank Guinta, R-NH, would require the CFPB to rescind its guidance from March 2013 regarding the fair lending risks associated with car dealer interest rate markups. The bill also would require the bureau to provide notice and take comments only for guidance related to auto lending through car dealers. Additionally, the legislation would make publicly available all information relied on by the CFPB, and redact any information exempt from disclosure under the Freedom of Information Act....

The number of complaints that consumers filed with the CFPB about debt collection practices fell 9.6 percent from the first quarter to the second and plunged 53.3 percent at the six-month mark versus one year ago, a new analysis by Inside the CFPB found. The biggest banks among the top 50 companies as ranked by complaints all acquitted themselves well at the mid-year 2015 point compared with the year before. Most notable in this regard was Wells Fargo, which saw consumer gripes fall 74.7 percent.Top debt collection firms had a more mixed performance. On the one hand, Encore Capital Group saw consumer criticisms fall 67.2 percent year over year, and 14.9 percent quarter over quarter. But Enhanced Recovery Company ...

Get Your TRID On. The CFPB has put out a Know Before You Owe guide for real estate professionals to help them navigate the upcoming TILA/RESPA Integrated Disclosure rule, otherwise known as TRID. The guide spells out the major elements of the rule, such as the steps associated with closings, and provides an explanation of the new disclosures. Industry pros can download from the bureau’s website print-ready versions in Adobe Acrobat PDF format as well as pre-order printed copies from the U.S. Government Printing Office. TRID Drives ClosingCorp to Integrate With Savana’s Loan Origination Product. ClosingCorp, a San Diego-based residential real estate closing cost data and technology vendor for the mortgage and real estate services industries, has integrated its Loan ...

Issuers of non-agency MBS injected some variety into the market in recent weeks with a deal backed solely by non-qualified mortgages and improvements to the representations and warranties on a jumbo MBS. Lone Star Funds issued a $72 million non-agency MBS backed mostly by non-QMs originated by Caliber Home Loans, a lender owned by the private-equity firm. Bloomberg first reported on the deal, which was priced on Aug. 7. Details on COLT 2015-A have been...