Responding to industry concerns over the impact of the new loan officer compensation final rule on reverse mortgages, the Consumer Financial Protection Bureau has clarified the phrase amount of credit extended for closed-end Home Equity Conversion Mortgage loans. For closed-end reverse mortgages, a loan originators compensation may be based on either (a) the maximum proceeds available to the consumer under the loan; (b) the maximum claim amount (if the loan is subject to the Department of Housing and Urban Developments HECM rules); or (c) the appraised value of the property, as determined by ...
A federal appeals court has rebuffed the bid by American International Groups mortgage insurance unit to overturn a lower courts order to pay more than $45 million to SunTrust Banks for insured losses related to mortgage defaults. The Fourth Circuit Court of Appeals last week upheld a Virginia federal judges ruling that AIGs United Guaranty breached an insurance agreement by refusing to pay claims on 1,305 defaulted combo loans which is a first-lien loan with a smaller, second-lien piggyback loan. At issue were mortgage defaults that SunTrust claimed should have been covered under a ...
Genworth Financial Inc.s U.S. mortgage insurance segment continued to be a burden to its parent despite reporting a narrower operating loss of $34 million in the fourth quarter of 2012, compared to losses of $38 million in the prior quarter and $96 million in the prior year. Nonetheless, the reduced amount of losses during the period was good news to company executives who reported net income of $166 million, or 34 cents a share, during the period from $142 million, or 29 cents, a year earlier. Operating profit was $167 million, or 34 cents a share, up from ...
Republican critics of the Consumer Financial Protection Bureau are maneuvering to take advantage of a sudden opportunity to push for changes to the leadership structure and the finances of the bureau, after a surprise legal ruling breathed new life into their long-running struggle to clip the new agencyfs wings. Last month, the U.S. Court of Appeals for the D.C. Circuit ruled in Noel Canning v. National Labor Relations Board that three recess appointments President Obama made to the NLRB were unconstitutional because the Senate was technically not in recess at the time they were made. Industry lawyers believe...
With state and local lawsuits against Fannie Mae and Freddie Mac seeking payment for real estate transfer taxes from which the GSEs assert they are exempt, an industry attorney says the endgame for enterprise and municipality alike wont come from the courts but from the other two branches of government at the highest level. Last month, Spokane, WA, and Montgomery County, MD, joined a growing list of local governments to file suit against the two GSEs for unpaid taxes, challenging Fannies and Freddies claim that the firms are exempt under their federal charter from transfer taxes in connection with the recording of deeds upon transfer of property by sale or foreclosure.
The Federal Housing Finance Agency has settled the first mortgage-backed securities lawsuit with the smallest player in the FHFAs massive litigation against non-agency MBS issuers and underwriters it says sold toxic MBS to Fannie Mae and Freddie Mac. In papers filed with the U.S. District Court, Southern District of New York, the FHFA voluntarily dismisses with prejudice its lawsuit against General Electric Co., ending the legal action in which the Finance Agency had claimed the firm had misled Freddie into purchasing some $549 million of toxic MBS. The terms of the settlement were not disclosed by the FHFA but the agreement also dismissed claims against Morgan Stanley and Credit Suisse as underwriters for the securities. This settlement resolves the dispute between FHFA, and GE consistent with FHFAs responsibilities as conservator of Freddie Mac, said FHFA General Counsel Alfred Pollard in a statement. FHFA is pleased this lawsuit has been resolved and appreciates the work of Freddie Mac on this matter. The FHFA filed suit during the summer of 2011 against 18 financial institutions, including GE, alleging violations of the federal Securities Act of 1933. The Finance Agency seeks tens of billions of dollars in damages incurred by the GSEs on purchases of approximately $200 billion in non-agency MBS sold between 2005 and 2007. GE had the smallest legal exposure among the major firms named in the FHFAs lawsuits as GEs one-time subsidiary, WMC Mortgage, sold MBS only to Freddie.
Some top legal minds expect to see more investigations, and perhaps settlements, brought by the Residential MBS Working Group in the months ahead, and theyll likely be flavored by interagency turf wars and the political ambitions of the elected officials that are helping to steer the groups actions. Just on the basis of prosecutorial rivalry, you can expect there will be further activity in this area, said Jeremiah Buckley, partner in the BuckleySandler law firm, during a webinar discussion this week on the working groups activities. Andrew Schilling, former chief of the Civil Division of the U.S. Attorneys Office for the Southern District of New York...
The massive legal action initiated by the Federal Housing Finance Agency about a year and a half ago on behalf of Fannie Mae and Freddie Mac against many of the nations biggest non-agency MBS issuers and underwriters for allegedly misrepresenting toxic MBS netted its first settlement this week with the prospect of more where that came from. In papers filed with the U.S. District Court, Southern District of New York, the FHFA voluntarily dismisses with prejudice its lawsuit against General Electric Co., ending the legal action in which the FHFA had claimed the firm had misled Freddie into purchasing some $549 million of toxic MBS. This settlement resolves...
Take extra time to read your FHA Annual Recertification Attestation before signing. It might make the difference between peace of mind and a world of pain. Phillip Schulman, compliance expert and partner with K&L Gates, said lenders have gotten themselves in hot water with the Department of Housing and Urban Development, and their executives threatened with debarment, because they failed to read the fine print. Each year, mortgage lenders are required to sign and submit to HUD a document attesting to the companys compliance with all HUD-FHA regulations and policies and that ...
Can a lender rely on an approval from the FHAs automated underwriting system in determining whether a mortgage loan is a qualified mortgage? Lawyers at BuckleySandler, a Washington, DC, law firm, indicated some uncertainty after poring over the Consumer Financial Protection Bureaus final ability-to-repay rule governing residential mortgage lending under new Truth in Lending Act regulations. Effective on Jan. 10, 2014, the final rule requires lenders to verify a borrowers financial information and determine the borrowers capacity to repay the loan over the long term. It also creates a ...