The Justice Department and C&F Mortgage Corp. of Midlothian, VA, agreed to a settlement that resolves allegation of lending discrimination against African-American and Hispanic borrowers of home mortgages. According to the terms of the settlement, which is subject to court approval, C&F Mortgage will revise its pricing policies, conduct employee training and pay $140,000 to settle allegations that it engaged in a pattern or practice of discrimination on the basis of race and national
The U.S. Attorneys office in Manhattan has entered into an agreement with the law firm of Steven J. Baum, one of the largest volume mortgage foreclosure firms in New York state, that requires the firm to pay $2 million to Uncle Sam and to extensively change its mortgage foreclosure practices. The agreement resolves an investigation into Baums mortgage foreclosure-related practices, specifically whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits and mortgage assignments in state and federal courts in New York.
The Consumer Financial Protection Bureau has developed a portal that companies can use to view and respond to entries in the new complaint database, Inside Regulatory Strategies has learned. The company portal serves as the interface between the CFPB and financial companies, enabling companies to view and respond to complaints submitted by consumers, the bureau said in a presentation to industry representatives recently. Using the portal, companies should provide an explanation of the resolution and the actions taken in the consumers situation, select a resolution status for the complaint and attach relevant documents, if necessary. The CFPB also maintains a consumer portal so complainants can check the status of their cases. Heres an overview of the complaint process: A consumer files a complaint, then the CFPB routes the complaint to the company.
The strategic default problem is not going away, keeping pressure on servicers and MBS investors to find ways to dis-incentivize these actions. House prices continue to fall, and more underwater homeowners are willing to batter their credit rating and default on their mortgage to get out of an uneconomic deal. In a recent report, analysts at Deutsche Bank said the threat of legal action and risks to assets other than the mortgaged property play a large role in a homeowners decision to strategically default. Eleven states are considered non-recourse states, either because they explicitly forbid deficiency judgments or...
Transparency, investor access to information and a willingness to engage in loss mitigation can help reduce the wave of litigation and investor losses resulting from repurchase demands, according to mortgage litigation experts. Theres a better alternative to fighting out buyback claims in court: all counterparties should sit down and find ways to resolve issues that trigger repurchase claims in an open and forthright manner, said panelists on a webinar hosted by Inside Mortgage Finance Publications. We have to work together because the country is hurting and the longer this drags on, the bigger the problem is going...
State attorneys general trying to negotiate a big-ticket settlement with top mortgage servicers saw their coalition fracture further over the past week, including a decision by Massachusetts to move independently toward litigation. A major stumbling block continues to be divergent views among the states on whether lenders should get immunity from non-servicing issues such as potential litigation over securitization as part of the deal. The widely held view is that top banks were willing to put up a combined $20 billion to be used to help struggling borrowers to settle legal challenges that were spawned by...
A regional inspector general report found material underwriting deficiencies in a clump of FHA loans originated by Countrywide Financial, and though Bank of America may end up paying about $1 million to settle the charges, the case could be a harbinger of bigger losses to come. The Department of Housing and Urban Development inspector general for five upper midwest states singled out Countrywide for an audit because the companys average default-to-claim rate was high for the region. The IG audited just 14 FHA loans, but half of them contained material underwriting deficiencies, mostly failing to...
The Securities and Exchange Commission is considering launching a civil injunctive action against Standard & Poors Rating Services, alleging violations of federal securities laws with respect to the companys ratings for a 2007 collateralized debt obligation. According to a Form 8-K filing this week by McGraw-Hill, the rating services parent, the federal agency is looking into S&Ps rating of Delphinus CDO 2007-1, which was to be mostly backed by non-agency residential MBS. In connection with the contemplated action, the [SEC] staff may recommend that the commission seek civil money penalties, disgorgement of fees and...
Certain elements of the Dodd-Frank Act such as the new standard related to unfair, deceptive and abuse acts and practices (UDAAP), along with the Federal Reserves ability to repay provisions proposal, present significant litigation risk to lenders, a top litigation attorney told industry representatives early this week. Speaking to attendees at the Mortgage Bankers Associations regulatory compliance conference in Washington, DC, on Sunday, Andrew Stutzman, a partner with Stradley, Ronon, Stevens & Young LLP, said, Im very troubled by Dodd-Frank in many respects. I think it and the regulations that are coming out and have come out the Feds ability-to-repay proposal are extremely complicated and extremely confusing.
The U.S. Department of Labors Occupational Safety and Health Administration has ordered Bank of America to rehire a Countrywide Financial Corp. employee who led internal investigations that revealed widespread and pervasive wire, mail and bank fraud involving Countrywide employees and was later dismissed. The employee alleged that those who attempted to report fraud to Countrywides employee relations department suffered persistent retaliation. The employee was fired shortly after Countrywides acquisition by BofA.