The law firm that pursued a nearly decade-long class-action fraud lawsuit on behalf of investors against Fannie Mae and their former auditor, KPMG LLP, until its settlement in May say they are entitled to a piece of the $153 million payout, plus expenses. In papers recently filed with the U.S. District Court of the District of Columbia, the firm of Markovits, Stock & DeMarco of Cincinnati is seeking attorneys’ fees in the amount of $29.1 million or 22 percent of the settlement amount, plus $15.3 million in “out of pocket” expenses incurred in the nine years of pursuing the class action.

The CFPB has decided to end its controversial policy of sending enforcement attorneys to routine examinations of supervised financial institutions, effective Nov. 1, 2013. According to CFPB Deputy Director Steven Antonakes, the bureau has been sending enforcement attorneys to on-site exams for a couple years and has changed its practice after assessing the effectiveness and efficiency of the operation. “From the beginning, we intentionally grouped our supervision, enforcement and fair lending offices together because...

The CFPB is putting into place a prioritization framework, apportioning examination, investigation and fair lending resources across product types, and it may well prove to be particularly significant for nonbank entities. “A specific charge of the bureau is to attempt to level the playing field between banks and nonbank entities relative to compliance with federal consumer financial laws,” said CFPB Deputy Director Steven Antonakes in a speech before the Federal Deposit Insurance Corp.’s Advisory Committee on Economic...

Consumer complaints submitted to the CFPB dropped 8.5 percent from the second quarter of 2013 to the third, the second consecutive quarterly drop, according to a new Inside the CFPB analysis of the bureau’s complaint database. The findings suggest financial services providers are getting a better handle on issues driving consumer gripes to the bureau, and doing a better job of responding to those complaints once they are lodged. Eight of the top 10 financial institutions as ranked by cumulative total of complaints saw a drop...

More than one in five loans originated today would not satisfy the criteria for the qualified mortgage “safe harbor” legal protections under the ability-to-repay rule promulgated in January by the CFPB, according to an analysis by ComplianceEase, a provider of risk management solutions to the financial services industry. The company’s analysis also found that more than half of such loans – or at least 10 percent of recently originated mortgages – have fees that exceed the new 3 percent points-and-fees threshold. Further, “Loans...

SunTrust Banks has agreed in principle with the Department of Housing and Urban Development and the Department of Justice to settle certain FHA-related claims. Separately, a federal judge in Texas refused to dismiss a government suit against two FHA lenders accused of manipulating HUD into insuring poorly underwritten loans which later resulted in massive losses to the agency. Announced on Oct. 10, SunTrust’s agreement with the government agencies is part of a broader resolution of certain legacy matters and repurchase agreements with Fannie Mae and Freddie Mac. SunTrust has agreed to settle certain ...

The Department of Housing and Urban Development’s proposed “qualified mortgage” rule attaches certain conditions to QM treatment that may complicate matters for participating lenders, said attorneys with K&L Gates in Washington, DC. On Sept. 30, the Department of Housing and Urban Development published its own proposed QM rule for FHA loans. The CFPB rule takes effect on Jan. 14, 2014, and will apply to FHA loans until HUD issues a final rule. Under the CFPB rule, many FHA loans would not qualify for the rule’s safe harbor because the higher mortgage insurance premiums would make them “higher priced mortgage loans.” Thus, in order to ...

Two surviving spouses of deceased reverse mortgage borrowers won their case against the Department of Housing and Urban Development after a U.S. court found HUD in violation of federal law for failing to protect the spouses from foreclosure. The court’s decision marks a turning point for surviving spouses, such as Robert Bennett of Annapolis, MD, and Leila Joseph of Brooklyn, NY, and ensures that they will be protected against eviction and foreclosure, despite the loss of their husband or wife, said Jean Constantine-Davis, a senior attorney with the AARP Foundation Litigation. In March 2011, the AARP and the law firm of Mehri & Skalet of Washington, DC, filed ...

The nation’s top court this week may have sent a subtle hint to the more than dozen big bank defendants being sued by the Federal Housing Finance Agency when it flatly declined to receive their petition to dismiss their cases, notes a legal expert. The 13 financial institutions – including Bank of America, Deutsche Bank, Goldman Sachs and JPMorgan Chase – sought to argue before the Supreme Court of the United States that the FHFA waited too long when it filed suit against the banks in 2011 over non-agency MBS the government-sponsored enterprises purchased prior to the 2008 financial crisis. SCOTUS said...