The five banks that are parties to the $25 billion national mortgage settlement have extended more than $26.11 billion in gross relief to more than 300,000 borrowers, or roughly $84,385 per homeowner, according to a new report from the Office of Mortgage Settlement Oversight. At that pace, the five participating servicers will satisfy their obligations under the settlement two years ahead of the 2015 deadline. “The report discloses that the banks have completed $21.92 billion in consumer relief to borrowers...

Adverse impact violations are the hardest to defend against and the ones causing the biggest settlements, according to Tammy Butler, the director of fair lending and compliance for Optimal Blue, a leading pricing engine. “In a nutshell, this means that your institution has a policy or criterion that has a disproportionate impact on the protected class population of the areas you serve,” she said in a recent blog. This can occur in the way that a lender prices loans or underwriting overlays. “So far, every lender that has been...

Members of the Residential Mortgage-Backed Securities Working Group filed a lawsuit this week against Credit Suisse Securities and reached separate settlements last week with JPMorgan Securities and Credit Suisse. New York Attorney General Eric Schneiderman, a co-chair of the working group, said federal and state regulators are working on a number of other actions. “We’re a long way away from wrapping this up,” he said. The lawsuit against Credit Suisse was filed this week by Schneiderman, alleging that ...

JPMorgan Securities and Credit Suisse Securities have agreed to pay more than $400 million combined to settle government charges that they misled investors in offerings of non-agency MBS from 2005 to 2010, according to the Securities and Exchange Commission. The SEC, working with the federal-state Residential MBS Working Group, reached separate settlement agreements with the two financial institutions after filing a complaint and issuing a cease-and-desist order. Neither JPMorgan nor Credit Suisse admitted to or denied the findings against them or any of their affiliates. The SEC alleged...

Some real estate agents are refusing to accept offers from buyers using FHA financing prompting minority rights advocates to question whether racial discrimination is causing the problem or some other factors. While illegal flipping and steering that targeted minority communities appear to have abated, bias against borrowers using FHA financing continues in the real estate market, according to Janis Bowdler, director of the Wealth-Building Policy project of the National Council of La Raza. Bowdler expressed her concern during a recent panel discussion of an FHA Working Paper on the FHA’s role in the housing finance market hosted by the Urban Institute. She said there have been reports of ...

Private mortgage insurers have been making a slow comeback and reclaiming market share, thanks in part to policy changes adopted by the FHA, according to MI industry executives. Executives say MI penetration of the market has grown from 2.8 percent in the first quarter of 2012 to anywhere between 8-10 percent in the third quarter, an increase they attributed in part to gaining market share from FHA. Currently, private MI companies account for approximately one-third of loans with loan-to-value ratios of 80 percent or more, which are also ...

Recent procedural rulings in Federal Housing Finance Agency lawsuits against non-agency MBS issuers and underwriters again favored the conservator of the government-sponsored enterprises, prompting some to speculate that issuers will move to settle the lawsuits. Meanwhile, a number of other MBS-related litigation developments continue to pile up. U.S. District Judge Denise Cote is overseeing 16 cases filed by the FHFA against non-agency MBS issuers and underwriters regarding non-agency MBS purchased by the GSEs between 2005 and 2007. The FHFA alleges misrepresentations by the issuers and underwriters on the MBS. Last week, Cote dismissed...

The Federal Housing Finance Agency so far continues to bat 1.000 in court in its multiple lawsuits against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac. This week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected motions to dismiss by Goldman Sachs Group Inc. and Deutsche Bank, in the defendants’ latest effort to make the FHFA’s massive legal action go away. In separate motions, Judge Cote rejected Deutsche’s and Goldman’s claims that the FHFA’s allegations are inadequate to support the agency’s claims of fraud.

A federal judge has allowed legal claims by current and former Fannie Mae employees over their employee stock ownership plan losses to proceed against several company directors including former CEO Daniel Mudd, as well as members of Fannie’s benefits plan committee. Lead plaintiffs Mary Moore and David Gwyer, who brought their claims against Fannie in 2009, seek compensation for losses on company stock that remained in employees’ retirement plans between April 2008 and May 2010. The government took over Fannie in September 2008 and put the GSE into conservatorship.

The Federal Deposit Insurance Corp. recently filed a lawsuit against the auditors of Colonial Bank alleging that they could have prevented “enormous losses” suffered by the bank due to fraud by Colonial’s largest mortgage banking customer, Taylor Bean & Whitaker Mortgage. The lawsuit is the first by the FDIC post-crisis against the accountants of a failed bank. Colonial was closed in August 2009 by the Alabama State Banking Department and the FDIC was named as receiver and is now ...