The unrelenting pressure to comply with industry regulations and standards is the greatest factor impacting eMortgage and paperless mortgage initiatives, according to a survey by Xerox Mortgage Services. Xerox’s eighth annual Path to Paperless survey found that an ample 86 percent of industry respondents looked to a technological solution to avoid being caught on the wrong side of regulatory enforcement. Mortgage laws, regulations and standards continue to evolve in a direction toward ...

The Consumer Financial Protection Bureau has been discreetly broadening its influence on statutory and regulatory interpretations through its largely unannounced filing of amicus curiae briefs in a handful of important cases brought by private litigants, according to an analysis of the CFPB’s legal activity by two leading industry attorneys.Since December 2011, the bureau has filed six such “friend-of-the-court” briefs in federal appellate cases, always assuming the role of steadfast consumer advocate, according to a review of the briefs by Arthur Axelson and Jeffrey Jamison, senior counsel and associate, respectively, with the Dykema law firm. In fact, “in several of its amicus curiae briefs, the CFPB has even sought to reverse a general consensus among the federal appellate courts,” the pair noted. In Birster v. American Home Mortgage Services, Inc., filed Dec. 21, 2011, in the 11th Circuit Court of Appeals, the question of interest to the bureau was whether activity surrounding foreclosure is immune from the Fair Debt Collection Practices Act. The CFPB argued that it is not. In Marx v. General Revenue Corp., filed Jan. 26, 2012, in the 10th Circuit Court of Appeals, there were...

Gibbs & Bruns, the law firm representing non-agency MBS investors that reached a precedent-setting settlement with Bank of America, is now targeting Wells Fargo and Morgan Stanley. The law firm’s clients issued Wells and Morgan Stanley a notice of non-performance last week identifying covenants in pooling and servicing agreements that the servicers have allegedly failed to perform. “The holders’ notice alleges that each of these failures has materially affected the rights of the certificate holders and constitutes an ongoing event of default in the servicer’s performance under the relevant PSAs,” the law firm said. Bank of America received...

A presidential task force created to investigate the pooling, sale and securitization of residential mortgages is now ready to pursue action against those whose business practices contributed to the financial crisis, according to New York Attorney General Eric Schneiderman. Certain financial institutions have contacted outside counsel after Schneiderman, chairman of the Residential MBS Working Group, told reporters the group is ready to take legal action “sooner rather than later.” A spokesman for the New York AG’s office declined to provide details but confirmed that there are ongoing investigations and that there would be upcoming announcements. “We are looking at conduct that led...

Wells Fargo and Morgan Stanley last week received notices from non-agency mortgage-backed security investors represented by the law firm of Gibbs & Bruns, which helped negotiate the pending $8.5 billion non-agency MBS settlement with Bank of America. Industry analysts suggest that the notices of non-performance could prompt settlements from Wells and Morgan Stanley, though the circumstances differ from the BofA case. The notices identify covenants in pooling and servicing agreements that the servicers ...

The National Credit Union Administration filed a lawsuit this week against Barclays Capital alleging misrepresentations in the sale of non-agency mortgage-backed securities to credit unions that subsequently failed. The NCUA said U.S. Central Federal Credit Union and Western Corporate Federal Credit Union paid more than $555 million for the non-agency MBS in question. Debbie Matz, chairman of the NCUA Board, said Barclays issued faulty disclosures on non-agency MBS it underwrote ... [Includes two briefs]

CitiMortgage this week paid in excess of $122.8 million to the FHA Mutual Mortgage Insurance Fund as part of its agreement with the Department of Housing and Urban Development and the Department of Justice to settle alleged violations of the False Claims Act. The payment to the FHA insurance fund is part of the $158.3 million settlement, which CitiMortgage agreed to in order to resolve charges of submitting false certifications to HUD regarding its compliance with FHA’s direct endorsement lender rules and endorsement of poorly underwritten loans for FHA insurance. These violations allegedly occurred between ...

Just three months before the deadline for finalizing a highly controversial rule requiring lenders to determine a borrower’s ability to repay, the Consumer Financial Protection Bureau still has not decided the key issue of how much legal protection lenders will get by meeting the still-undefined “qualified mortgage” standard. And the CFPB’s top official said the legal insurance blanket preferred by most mortgage lenders and their attorneys – a safe harbor, rather than a rebuttable presumption – may not provide as much protection as the industry is hoping for. “The safe harbor versus rebuttable presumption comparison is...

The Consumer Financial Protection Bureau is pushing full-speed ahead with its probe of the mortgage industry’s use of captive reinsurance by directing PHH Corp. to comply with an earlier civil investigative demand – the functional equivalent of a subpoena – within three weeks, brushing aside the company’s numerous objections. “PHH’s petition to modify or set aside the CID in this matter is denied,” CFPB Director Richard Cordray ruled last week. “Within 21 days of this decision and order, PHH is directed to produce all responsive documents, items and information within its possession, custody or control that are covered by the CID.” Cordray added that PHH is...

Fannie Mae announced this week it has tapped Bradley Lerman to be the GSE’s new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.