Poor oversight and monitoring have allowed certain borrowers with Home Equity Conversion Mortgage loans to illegally rent their properties to participants in the federal governments Section 8 housing choice voucher program, according to the Department of Housing and Urban Developments Office of the Inspector General (OIG). The second of two OIG audit reports on HUDs oversight of the HECM program has concluded that department policies did not always ensure that borrowers complied with the programs residency requirements. The audit found that 37 out of 174 HECM borrowers reviewed were ...
The Department of Housing and Urban Development is investigating reports that a loan officer of an approved FHA lender had participated in a reverse mortgage borrowers counseling session, a practice HUD frowns upon but does not directly prohibit. A HUD representative declined to provide details but acknowledged that the report was part of informal discussions between department officials and stakeholders. That information has not been officially released in any form, he said. Once the details are finalized, we will be advising stakeholders. The National Reverse Mortgage Lenders Association posted the ...
The Department of Veterans Affairs has announced new security measures to ensure that only authorized lenders and servicers have access to mortgage-related data. Guidance issued earlier this month establishes new security procedures for resetting users PIN numbers and validating their identities. Users must be validated as an employee of the lender/servicer that seeks access to the VAs Veteran Information Portal (VIP). The VA will provide each approved lender/servicer with a list of previous users for validation. Upon completion of the validation, the list must be ...
Inside Mortgage Finance Publications, Inc. announced this week that it has just settled a major copyright infringement dispute with a large national financial institution for more than one quarter of a million dollars. Without admitting any infringement, liability or wrongdoing, the financial institution agreed to pay IMFP to settle charges that it had violated federal copyright laws by making unauthorized copies of Inside Mortgage Finance. IMFP alleged that the financial institution had engaged in ongoing in-fringement, distributing infringing copies of dozens of registered issues to a group of non-subscribing employees. We never like...
The federal judge in charge of overseeing the multiple lawsuits filed by the Federal Housing Finance Agency against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac rebuffed yet another motion by one of the banks to shut down the legal action. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected a motion to reconsider her December decision allowing the FHFA to proceed on behalf of the GSEs with most of its fraud claims against Ally Financial. On Dec. 19, the judge denied most of Allys motion to dismiss, including the defendants request that the court strike the demand for punitive damages, finding there were sufficient factual allegations in the FHFAs complaint to move forward with its fraud complaint.
Inside Mortgage Finance Publications, Inc. announced this week that it has just settled a major copyright infringement dispute with a large national financial institution for more than one quarter of a million dollars. Without admitting any infringement, liability or wrongdoing, the financial institution agreed to pay IMFP to settle charges that it had violated federal copyright laws by making unauthorized copies of Inside Mortgage Finance. IMFP alleged that the financial institution had engaged in ongoing infringement, distributing infringing copies of dozens of registered issues to a group of non-subscribing employees. We never like to pursue...
The CFPB convinced a federal district court in Miami to require a nationwide debt-relief services company to refund up to $100,000 to consumers who were allegedly unlawfully charged advance fees for debt settlement services. State Attorneys General of New Mexico, North Carolina, North Dakota and Wisconsin and the Hawaii Office of Consumer Protection joined the bureaus lawsuit, making this the CFPBs first joint-enforcement action with the states. The bureau asserted that the defendant, Payday Loan Debt Solution...
The Consumer Financial Protection Bureau this week issued a long-awaited final rule that establishes ability-to-repay and qualified mortgage (QM) standards, as well as a second, temporary category of QMs for government-backed mortgages to avoid market disruption. At the same time, the CFPB sought comment on a proposed rule that would exclude new and existing FHA, VA and Rural Housing Service (U.S. Department of Agriculture) programs that facilitate refinancings for borrowers at risk of delinquency or default. The temporary QM category was spurred by CFPBs concern about the ...
It is 2013 and courtrooms across the country continue to hum with investor disputes over issuer liability for MBS investments that went bad. In its third lawsuit against JPMorgan Chase since mid-2011, the National Credit Union Administration is seeking millions of dollars in damages in connection with the packaging and sale of $2.2 billion in MBS issued by the now-defunct Washington Mutual to three corporate credit unions long before it was acquired by JPMorgan in 2008. Filed in Kansas federal court, the NCUA lawsuit alleged...
An $8.5 billion settlement this week between federal regulators and 10 servicers included a large portion of non-agency mortgages. Servicers with significant non-agency holdings were also left out of the settlement, though federal regulators said they are still working toward a deal with those companies. The settlement applies to foreclosures initiated in 2009 and 2010. Non-agency mortgages had much higher foreclosure rates than other mortgage types during that time. Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo agreed...