The Federal Housing Finance Agency late last week announced it reached a nearly $100 million settlement with RBS Securities to settle allegations tied to non-agency MBS bought by Freddie Mac from 2005 to 2007, but the deal represents just a fraction of the firm’s remaining exposure. The $99.5 million settlement only resolves claims against RBS in FHFA v. Ally Financial Inc. in the Southern District of New York. Ally Financial is the successor company to GMAC-RFC, a now defunct non-agency MBS issuer. Last week’s deal is...
The Federal Housing Finance Agency late last week announced it reached a nearly $100 million settlement with RBS Securities to settle allegations tied to non-agency MBS bought by Freddie Mac from 2005 to 2007, but the deal represents just a fraction of the firm’s remaining exposure. The $99.5 million settlement only resolves claims against RBS in FHFA v. Ally Financial Inc. in the Southern District of New York. Ally Financial is the successor company to GMAC-RFC, a now defunct non-agency MBS issuer.
DC Circuit Latest Court to Reject GSE Tax Collection Effort by Municipalities. A three-judge panel of the DC Circuit Court recently upheld a lower court ruling against Kay County in Oklahoma, which has been trying to collect real estate transfer taxes from Fannie Mae and Freddie Mac. In rejecting Kay County’s bid to get the GSEs to pay a 1 percent “documentary stamp tax,” the DC court’s finding became the latest in a growing number of…
The Federal Housing Finance Agency will “assess the merits of litigation” against Fannie Mae’s and Freddie Mac’s servicers and lender-placed insurance providers to recover premium overpayments by the government-sponsored enterprises following a pointed suggestion to do so by the agency’s official watchdog. A new audit released by the FHFA’s Inspector General found that Fannie and Freddie could have overpaid about $158 million in 2012 alone for lender-placed or “force-placed” insurance policies. The IG said it calculated its $158 million figure as the difference between the amount the GSEs actually paid in premiums – $360 million – and a “reasonable” price for such coverage – $202 million. “Our retrospective analysis suggests...
Last week, the CFPB ordered GE Capital Retail Bank – a financial institution in New Jersey now known as Synchrony Bank – to provide approximately $225 million in relief to consumers harmed by alleged illegal and discriminatory credit card practices. Under the terms of a consent order brought by the bureau, GE Capital is required to refund $56 million to approximately 638,000 consumers who were subjected to allegedly deceptive marketing practices. As part of the joint enforcement action by the CFPB and Department of Justice, GE Capital must also provide an additional $169 million to about 108,000 borrowers excluded from debt relief offers because of their national origin. The consent order represents the federal government’s largest credit card discrimination settlement in history...
SunTrust Mortgage, based in Richmond, VA, agreed to pay a total of $968 million to settle allegations of origination and servicing wrongdoing under a consent order brought by the CFPB. The Department of Justice, the Department of Housing and Urban Development and state attorneys general from 49 states and the District of Columbia joined in the settlement, which stemmed from the National Mortgage Servicing Settlement. The company will provide $500 million in loss-mitigation relief to underwater borrowers. The order also will require SunTrust to pay $40 million to approximately 48,000 consumers who lost their homes to foreclosure, and $10 million to cover losses it caused to the FHA, the Department of Veterans Affairs, and the Rural Housing Service. The order...
The CFPB recently ordered a New Jersey company, Stonebridge Title Services Inc., to pay a $30,000 civil penalty to the bureau for allegedly paying illegal kickbacks for referrals. According to the CFPB, Stonebridge paid commissions to more than 20 independent sales representatives who referred title insurance business to Stonebridge. Stonebridge solicited people to provide it with referrals of title insurance business, offering to pay commissions of up to 40 percent of the title insurance premiums Stonebridge itself received, the bureau alleged. “These practices violated Section 8 of the Real Estate Settlement Procedures Act, which prohibits kickbacks and payment of unearned fees in the context of residential real estate transactions,” the CFPB said. Paying commissions for referrals is allowed under RESPA ...
If compliance professionals are fortunate enough to discover a compliance issue before the CFPB does, they’ll likely be best served by self-reporting to the CFPB – after they get to the root cause of the problem and begin remediation efforts. That was perhaps the single most important take-away from one of the breakout sessions at the American Bankers Association’s 2014 regulatory compliance conference, held in New Orleans earlier this month. According to Christopher Spellman, corporate compliance director for Heartland Financial USA, the first step in the process is, what is the issue and how was it discovered? “The answer to that question can impact the remediation process,” Spellman said. “Obviously, it’s best if you discover it yourself internally,” said John Podvin ...
As the lending compliance landscape continues to evolve under the influence of multiple CFPB rulemakings, it’s critical compliance professionals keep their eyes on emerging risks as soon as they develop, compliance professionals said during the American Bankers Association’s recent 2014 regulatory compliance conference held earlier this month in The Big Easy. “Inevitably, I always have someone ask me what things keep me up at night. For me, I could pull out a list of all the issues I’ve identified and am working on,” said Carol Yee, chief compliance officer for People’s United Bank in Bridgeport, CT. “But what really keeps me at night are the things I have not detected. These are the emerging risks that are developing and that ...
Multiple lender industry representatives have asked the CFPB to extend the 30-day comment period to weigh in on the bureau’s proposal to ease financial institutions’ annual privacy-notice requirement under the Gramm-Leach-Bliley Act by creating an alternative delivery method which financial institutions would be able to use under certain circumstances. “The proposal describes an alternative method for delivering privacy notices with numerous conditions and qualifications that have not been previously articulated,” the industry groups said. For example, in order to take advantage of the alternative delivery method, financial institutions must not only limit their information sharing to one of the established exceptions but must also provide an alternative annual notice, maintain a dedicated webpage, offer customers a toll-free number and institute ...
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