A dispute over which office within the Department of Housing and Urban Development is responsible for tracking and recording certain collections from civil fraud settlements is wreaking havoc on HUD’s accounting of collections and recoveries. In its semiannual report to Congress, HUD’s Office of the Inspector General said it might have to elevate the matter to the HUD deputy secretary for a decision as to which office is responsible for each action. The dispute ...

A ruling late last year by a state appeals court in New York threatens to upend the practice of providing “gap” or “bridge down” representations and warranties on residential MBS, according to a brief submitted on behalf of the Securities Industry and Financial Markets Association. SIFMA asked the New York State Court of Appeals to reverse the lower court’s ruling in Bank of New York Mellon v. WMC Mortgage. Lawyers at the law firm of Stroock & Stroock & Lavan submitted an amicus brief to the N.Y. State Court of Appeals on behalf of SIFMA regarding the case. “The court’s resolution of this issue could have...

JPMorgan Chase is a step closer to settling a dispute with Deutsche Bank and the Federal Deposit Insurance Corp. over certain mortgage securitization agreements in connection with the government’s takeover of failed mortgage lender Washington Mutual. According to Chase’s most recent 10-Q filing with the Securities and Exchange Commission, the firm, Deutsche Bank and the FDIC have signed a term sheet to resolve pending litigation brought by the German bank against Chase and the FDIC in relation to WaMu as well as Chase’s outstanding indemnification claims pursuant to the terms of the purchase-and-assumption agreement with the FDIC. The term sheet is subject...

A federal judge rejected efforts by the government to keep a new batch of official memos and other documents from being disclosed in the ongoing legal war over the terms of the conservatorships of Fannie Mae and Freddie Mac. U.S. Court of Federal Claims Judge Margaret Sweeney released a new set of documents that included a brief excerpt of former White House housing policy expert Jim Parrott’s deposition from January, a presentation from the Federal Housing Finance Agency in 2008 and several memos dating back to 2008 and 2012. Sweeney rejected...

As policymakers in Washington, DC, face the expiration of the Treasury Department’s Home Affordable Modification Program at year-end, the CFPB last week released a collection of what it characterized as “guiding principles” on the future of foreclosure prevention. “We aim to help consumers avoid foreclosures, which upset their personal and financial lives,” said CFPB Director Richard Cordray. “The modification program was put in place to provide alternatives to foreclosure. Our principles will serve as helpful guardrails for servicers, investors and regulators to consider as we continue to protect consumers who are struggling to pay their mortgages.” In summary, the principles emphasize, among other things, accessibility: “Consumers should easily be able to obtain and use information about loss mitigation options, and ...

Mortgage Industry Waits for PHH Shoe to Drop. The mortgage industry is awaiting a final ruling from the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corp. v. Consumer Financial Protection Bureau, No. 15-cv-01177.

More unsealed documents were released this week during the discovery process in a GSE shareholder case in the U.S. Court of Federal Claims. The eight documents ranged from an excerpt of former White House housing policy expert Jim Parrott’s deposition from January,to presentations from the Federal Housing Finance Agency in 2008 to several memos dating back to 2008 and 2012. In the two-page Parrott deposition excerpt, he said that the net worth sweep was a “Treasury-driven process,” when asked why he didn’t reach out to anyone on Capitol Hill about the plan. He added that to the degree there was outreach to Congress, it would have come from Treasury, not him.

Mortgage industry trade groups filed a brief last week asking the Supreme Court of the United States to take up a case involving fees charged by Connecticut aimed at mortgage recordings by Mortgage Electronic Registration Systems. In February, Connecticut’s Supreme Court upheld fees imposed by the state in 2013 that tripled charges for mortgages recorded with MERS compared with non-MERS recording fees in the case of MERSCORP Holdings v. Dannel Malloy. In the new brief, industry participants caution...

The Sixth U.S. Circuit Court of Appeals overturned a lower court decision that had cleared Freddie Mac of charges that it misled investors about its involvement in the subprime mortgage market. The lawsuit was filed in 2008 by the Ohio Public Employees Retirement System, which claimed Freddie made false public financial statements that hid its exposure to risky loans. The fund alleged that it lost more than $27.2 million as the value of Freddie stock plummeted. OPERS said...

Ocwen Financial reported a net loss of $87.20 million for the second quarter of 2016, with most of the loss related to so-called legacy issues. A planned settlement with the Department of Justice of two lawsuits involving the Home Affordable Modification Program and FHA mortgages caused $40.10 million in pre-tax losses for the nonbank lender-servicer. The company also paid $28.10 million during the quarter to cover the cost of monitoring settlements involving federal regulators ...