The Consumer Financial Protection Bureau is seeking comment and information on mortgages not financed by Fannie Mae or Freddie Mac, including those insured and guaranteed by the federal government, as it reopened the public discussion for the proposed ability to repay rule. New data the Federal Housing Finance Agency provided to the CFPB after the close of the rulemakings comment period spurred the bureau to reopen the comment period until July 9, 2012. The new FHFA data track the performance of loans purchased or guaranteed by Fannie Mae and Freddie Mac from 1997 to 2011. The CFPB also has obtained data on ...
SunTrust Mortgage has agreed to pay $21 million to the federal government to resolve a lawsuit alleging pricing discrimination against minority borrowers over a period of four years. The Department of Justice, which brought the pricing lawsuit, said the settlement also requires that SunTrust continue the anti-discrimination policies and practices it had adopted prior to the settlement. The mortgage lender agreed to the settlement voluntarily without admitting to any wrongdoing and without any factual findings, adjudications or litigation. Filed in U.S. District Court in Richmond, VA, the...
Last weeks launch of the RMBS Working Groups website demonstrated that government investigators see Wall Street insiders as a valuable source of information to detect and prove fraud and other misconduct in the packaging of mortgage securities. Fraud can be hard to uncover without help from whistleblowers who were corporate insiders, the task force said on the website. Whistleblowers can get rewards of up to 30 percent of the governments monetary recovery based on the specific information, as well as protection from retaliation. The inclusion of a whistleblower provision in the Dodd-Frank Act has...
The Supreme Court of the United States last week sided with Quicken Loans while unanimously rejecting the legal arguments of two federal agencies in affirming a lower courts determination that a plaintiff must prove a settlement fee was split by two or more persons in order to successfully stake a claim under the Real Estate Settlement Procedures Act. The relevant portion of RESPA at issue in Freeman et al. v. Quicken Loans Inc. is the provision that [n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a...
In Hogan v. Washington Mutual Bank, N.A. et al, the Arizona high court has dismissed the show me the note claim in foreclosure litigation, throwing out a legal argument often used to block an impending foreclosure. We granted review to decide whether a trustee may foreclose on a deed of trust without the beneficiary first having to show ownership of the note that the deed secures, explained Arizona Supreme Court Chief Justice Rebecca White Berch. We hold that Arizonas non-judicial foreclosure statutes do not require the beneficiary to prove its authority or...
Last week, the Federal Reserve Board put out action plans for Citigroup and HSBC Finance Corp. to correct deficiencies in their residential mortgage loan servicing and foreclosure processing. These enforcement actions require the mortgage servicing subsidiaries to provide appropriate remediation to borrowers who suffered financial injury as a result of errors by the servicers. The Fed also released the engagement letter between Ally Financial Inc. and its independent consultant to review foreclosures that were in the firms pipeline in 2009 and 2010...
The U.S. Court of Appeals for the 11th Circuit recently reversed and remanded a lower courts rejection of a Fair Debt Collections Practices Act claim, determining in Reese v. Ellis, Painter, Rattertree & Adams, LLP that the contents of a dunning notice from the lenders foreclosing law firm amount to an effort to collect a debt under the act. In this case, the borrowers, Izell and Raven Reese of Roswell, GA, purchased a piece of property in 2004 with the help of a $650,000 loan from Provident Funding Associates, LP. To get that loan, the Reeses signed a promissory note and...
With his home state of Nevada leading the nation in foreclosures, Republican Sen. Dean Heller has introduced legislation that seeks to simplify and speed up the short-sale process via an amendment to the Truth in Lending Act. Heller has recently introduced SB 3177, the Stopping Ongoing Lender Delays Act (or SOLD Act). His legislation would require each servicer of a home mortgage to respond in writing within 30 calendar days to a mortgagor of a residential mortgage loan who has requested in writing a short sale of the dwelling or residential real property that is subject to the mortgage...
The Federal Deposit Insurance Corp. late last week filed separate lawsuits against a number of companies that issued or underwrote non-agency MBS purchased by Citizens National Bank and Strategic Capital Bank, two Illinois banks that failed in May 2009. The two banks purchased some $140.5 million of non-agency MBS issued by Bear Stearns, Citicorp, Credit Suisse and Merrill Lynch. The lawsuits also name JPMorgan Securities, Citigroup, Credit Suisse, Deutsche Bank, Ally Securities, HSBC Securities, RBS Securities and UBS Securities as underwriters of these transactions. The FDIC is seeking $77.0...
Uncertainty lingers in the wake of last weeks announced $8.7 billion settlement between non-agency MBS investors and Ally Financials subsidiary Residential Capital as the details and implications of the deal resonate throughout the market. The agreement with 17 residential MBS investors was struck in a photo finish shortly before ResCaps bankruptcy filing, and it represents the second major settlement between non-agency MBS investors and the sponsors of non-agency securitizations. Bank of Americas controversial $8.5 billion proposed settlement with investors that purchased Countrywide non-agency MBS...