Fannie Mae and Freddie Mac could end up on the hook for millions of dollars in unpaid property taxes as well as the targets of numerous legal complaints following a Michigan federal judges ruling that could force the GSEs to open their coffers to a plethora of revenue-starved local governments. Two weeks ago, U.S. District Court Judge Victoria Roberts granted Oakland County, MI, summary judgment in its lawsuit against Fannie and Freddie because the two GSEs failed to pay the transfer tax on deeds recorded by the state Register of Deeds Office, as required by Michigan law.
Bank of America appeared to clear a hurdle in getting final approval for its proposed $8.5 billion MBS settlement when the New York State Supreme Court last week dismissed an attempt to overturn the deal by an investor group that was not included in the settlement. New York State Supreme Court Justice Barbara Kapnick dismissed the complaint brought by Walnut Place LLC and related entities on March 28 saying that the investors cant sue BofA directly without giving the Bank of New York Mellon enough time to act in its role as the MBS trustee. Walnut Places appeal seeks to revive its suit against BofA. Walnut...
President Obama this week signed into law a measure that, among other things, kills big bonus payments to Fannie Mae and Freddie Mac executives for as long as the GSEs are subsidized by taxpayers. After nearly two months and some legislative positioning, Congress passed the Stop Trading on Congressional Knowledge Act of 2012. Primarily, the STOCK Act bars House and Senate members and their staff from using non-public, inside information for personal benefit.However, an amendment to the bill which was passed on an overwhelmingly bipartisan margin in both houses of Congress prohibits the payment of bonuses over and above a GSE executives salary compensation while Fannie and Freddie remain in government conservatorship.
Three former Fannie Mae executives, including the companys one-time CEO, have petitioned a federal judge to toss the securities fraud case the government filed against them late last year. Filed last week in the U.S. District Court for the Southern District of New York, the motion to dismiss contends the Securities and Exchange Commission is thin on proof that the GSE, at the direction of the then top executives, failed to disclose to investors the companies exposure to subprime mortgages prior to the 2008 housing market crash.
The risk of fraud in property valuation, occupancy and identity has seen its highs and lows in 2011 but the rising trend of employment and income fraud in mortgage loan applications over the last two years is cause for concern, according to Interthinxs 2011 Mortgage Fraud Risk Report. According to the annual report, the employment/income fraud risk index rose 14 percent in 2011 and has been on an upward trend for more than two years. Over that period, the index has increased more than 45 percent, it said. The report said the increase may have been the result of the larger decline in the income of working...
A federal district court judge in Washington DC this week signed off on the proposed $25 billion settlement agreement between the federal government, state attorneys general and the top five mortgage servicers, putting in place a potential template for national standards for the mortgage servicing industry. On April 6, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia entered the proposed consent judgments against Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and Ally Financial, including a settlement term sheet and additional exhibits specific...
Banks maintain real estate-owned properties unequally, with properties in minority communities showing clear signs of vacancy while those in white communities receive necessary attention, according to a new investigation by the National Fair Housing Alliance. The investigation, outlined in the report The Banks are Back Our Neighborhoods are Not: Discrimination in the Maintenance and Marketing of REO Properties, looked at 1,036 REO properties in nine different metro areas, comparing those in predominantly Latino and African-American neighborhoods to those in predominately white communities...
The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three non-public investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ...
In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ...
Iowa Attorney General Tom Miller, the lead official behind the recent $25 billion mortgage servicing settlement, told industry representatives last week that, unlike past agreements, the AGs are going to be sticklers for full and proper implementation this time around. Implementation is a very, very important aspect to our effort currently and going forward, Miller said to participants in a webinar sponsored by Inside Mortgage Finance, an affiliated publication. We put just an awful lot into this investigation and negotiations, and we dont want it to ...