The attorneys general of 15 states came to the defense of PHH Corp. and related parties in their case with the CFPB over the agency’s interpretation and enforcement of the Real Estate Settlement Procedures Act.The AGs of Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Nevada, Oklahoma, South Dakota, Texas, West Virginia and Wisconsin focused on the constitutional issues in the case, with not a single mention of the statutory questions related to the act. The AGs made three major arguments in support of PHH’s position. First, they asserted that the separation of powers plays a critical role in preserving the division of authority within the federal system, and the CFPB’s governance structure violates the separation of powers ...

PHH Corp. and related parties again made a full defense of their position in their legal struggle with the CFPB over alleged misconduct under the Real Estate Settlement Procedures Act. PHH made five primary arguments to the U.S. District Court of Appeals for the District of Columbia Circuit, the first of which was that the CFPB is unconstitutionally structured and must be invalidated. …

The years-long legal battle that PHH Mortgage and PHH Corp. have been waging with the CFPB continues to take sudden and unexpected turns. One recent example: PHH filed a brief in opposition to the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew from intervening in the mortgage lender’s case with the CFPB. …

With legal briefs continuing to be filed in PHH Corp. v. CFPB, mortgage experts on the Real Estate Settlement Procedures Act see a bit of a silver lining, along with multiple warnings, in the handful of consent orders the CFPB brought against other industry defendants on the RESPA front. Earlier this year, the CFPB brought a $3.5 million enforcement action against Prospect Mortgage, accusing the firm of illegal kickbacks for mortgage business referrals from two real estate brokers, and in an unusual twist, a mortgage servicing operation. The bureau also acted against ReMax Gold Coast and Keller Williams Mid-Willamette, the brokers, and Planet Home Lending, the mortgage servicer – all of whom it accused of taking illegal kickbacks. During an exclusive ...

Nationstar in the CFPB’s Crosshairs Over HMDA Reporting. Nationstar, the residential mortgage servicer, revealed recently it is being investigated by the CFPB over issues related to complying with the Home Mortgage Disclosure Act.... Non-Agency MBS Issuers Like the Legal Protection of the ATR. Congressional Republicans may be working on legislation to repeal and replace many regulations required by the Dodd-Frank Act, but some issuers of mortgage-backed securities are actually pushing to maintain some of the regulations.... Trump Executive Order on Regulatory Red Tape Unlikely to Apply to CFPB. Will the Bureau Comply Anyway? The executive order that President Trump signed in the middle of February that requires every federal agency to establish a regulatory reform task force to eliminate red tape probably does not apply to the CFPB, according to industry experts....

The government has until April 17 to prove that the 11,000 documents it is withholding are correctly labeled as “privileged.” This week, a ruling by Federal Claims Court Judge Margaret Sweeney ordered the government to review the documents and release those that are non-privileged to the plaintiff’s attorneys in Fairholme Funds Inc. et al., v. The United States. The order came on the heels of a January appeals court ruling that found the bulk of a batch of 56 documents the government refused to turn over to the plaintiff’s attorneys, after being ordered to do so last year, did not merit privilege treatment. They included various memos, emails and presentations from the Treasury, Federal Housing...

The Trump administration looks to be taking sides with a mortgage lender that says the configuration of the Consumer Financial Protection Bureau is unconstitutional. The government, through the Department of Justice and the Solicitor General, usually sides with government agencies in court cases. But in the closely watched lawsuit involving PHH Mortgage and the CFPB, it’s expected to oppose the bureau’s stance. This week, the U.S. Court of Appeals for the District of Columbia Circuit approved...

After years of confusion among servicers and borrowers, the Internal Revenue Service is getting closer to issuing guidance about how servicers should report interest to the IRS on mortgages that receive significant loan modifications. The Mortgage Bankers Association and the American Bankers Association recently submitted a joint comment letter to the agency, which announced plans to issue guidance on the matter back in December 2015. The trade groups said...

Can a technology that helped bring the cryptocurrency Bitcoin into being enhance the securitization markets? The Structured Finance Industry Group and the Chamber of Digital Commerce think so and have partnered to help make it happen. According to Perianne Boring, founder and president of the CDC, which bills itself as the world’s largest trade association representing the blockchain industry, “The securitization process is an ideal candidate for the efficiencies of distributed ledger technology. “Blockchain platforms create...

The threat of large, unpredictable settlements are looming over several European banks that have not yet resolved their remaining MBS lawsuits, putting pressure on their earnings and capital, according to a new Fitch Ratings report. Uncertainty about the scale of penalties from legacy MBS lawsuits will compel the affected banks to continue being cautious about managing and retaining capital, and distributing dividends. Though most of the banks have strengthened their capital positions considerably since the financial crisis, there would be no rest for them until the last settlement dime has been paid, the report indicated. Bank settlements with U.S. agencies relating to fraud investigations of their roles in the financial crisis, specifically their legacy MBS business, have...