The chair of the Senate Judiciary Committee is looking into whether monies from mortgage-settlement funds were channeled to partisan advocacy and community organizations that Congress had previously defunded. In a recent letter to Attorney General Jeff Sessions, Chairman Chuck Grassley, R-IA, revived a long-standing request by the committee for a list of all settlement agreements reached during the Obama administration that involved alleged payments to community groups. Grassley’s request came in the wake of Session’s June 7 directive prohibiting the DOJ from entering into any settlement agreements that provide for payment to third parties that were not directly harmed by the alleged misconduct. Sessions said the directive ends the previous administration’s practice of requiring or encouraging defendants to make payments to third parties as a condition of settlement. The directive would ...

The VA condominium-financing process can be difficult for both veteran borrowers and lenders, according to experts at a recent VA lender conference. The big issue for borrowers is finding a condo development that has VA approval or one that can obtain approval quickly enough to complete the loan process in the shortest time possible. A development that has a high number of foreclosures, a significant number of condo owners that are behind on their association dues, or pending litigation against the homeowner association is unlikely to win VA approval, experts said. Such factors could put the VA and the lender at risk. As such, securing VA approval for a development is crucial. In 2009, VA stopped accepting HUD/FHA condo project approvals in lieu of a VA project review, said Phyllis Chilton, valuation officer at VA’s Phoenix regional loan center. Condo projects that were accepted previously by ...

A Connecticut jury has found a former securities trader guilty and acquitted a second trader in an MBS fraud case brought by the Securities and Exchange Commission two years ago. A conspiracy charge against a third Nomura trader was unresolved. Although multiple charges were brought against the former traders – Michael Gramins, Ross Shapiro and Tyler Peters – only Gramins was found guilty of conspiracy, according to an analysis by Shepherd Smith Edwards & Kantas of Houston. All three defendants were...

Weeks after the Trump administration banned the practice, the Senate Judiciary Committee is looking into whether the Obama administration used mortgage-related settlement funds to funnel money to political organizations that Congress deliberately defunded. In a recent letter to Attorney General Jeff Sessions, Sen. Chuck Grassley, R-IA, chair of the Senate Judiciary Committee, revived a standing request to the Department of Justice for a list of all settlement agreements reached during the previous administration that involved alleged payments to partisan community organizations. He gave the agency until June 28 to respond to his request. Specifically, Grassley asked...

Wells Fargo Bank finds itself in yet another legal quagmire, accused of illegally making “stealth modifications” to mortgage payments of borrowers in bankruptcy without their permission – a charge the bank vehemently denies. A class-action lawsuit filed recently in the U.S. Bankruptcy Court for the Western District of North Carolina alleges that Wells Fargo made unauthorized mortgage modifications that neither the bankrupt debtors, their attorneys nor the bankruptcy court requested or approved. In some cases, 30-year loans were...

The House Financial Services Committee recently threatened to file contempt charges against CFPB Director Richard Cordray over the agency’s alleged failure to comply with the committee’s request for documentation related to the bureau’s response to the Wells Fargo scandal involving the creation of unauthorized customer accounts. “In response to the committee’s records request, the CFPB did not produce a single internal record related to its Wells Fargo branch sales practice investigation,” the HFSC staff said in a report. Over the course of six months, the bureau only produced 1,010 pages of records, “comprised almost entirely of records easily obtainable” from Wells or the Office of the Comptroller of the Currency, it added. After six months of the CFPB’s “refusal to ...

The American Bankers Association recently detailed a handful of major concerns it continues to have with the approach federal regulators take toward fair lending. The first such concern it listed in a new white paper sent to the Treasury Department is the expanded use of the disparate-impact concept. “Federal agencies responsible for ensuring compliance with national fair lending laws have in the last few years aggressively applied a controversial legal theory, disparate impact, to brand banks with violations of fair lending rules,” said the ABA. Under the disparate-impact theory, regulators rely heavily, sometimes solely, on statistical sketches to justify lawsuits or other enforcement actions, it added. “In doing so, since June 2015 they have largely ignored the analytical framework established ...

The information the CFPB collects and reports on consumer complaints offers lenders a tremendous resource in terms of abiding by the letter and the spirit of the bureau’s numerous rules, according to some top compliance professionals. “The CFPB’s annual report on complaints really is an incredible source of information,” said Barbara Boccia, senior director at Wolters Kluwer, during a presentation early last week at the American Bankers Association’s annual regulatory compliance conference in Orlando. “First, it really is a lot of information. Also, the way they structure the information that they receive is instructive,” she said. “You really want to make sure you are structuring your [complaint] information the same way, in terms of what they are looking at – for ...

One of the top concerns among compliance professionals is the seeming inevitable conflict that the CFPB’s amendments to its mortgage servicing rules will have with various state laws – in particular, the possibility that compliance with one may put the servicer out of compliance with the other. That was one of the key takeaways from a break-out session early last week at the American Bankers Association’s annual regulatory compliance conference in Orlando. “One issue that comes up fairly frequently has to do with what a servicer should do when there is a conflict between state and federal law. We’ve seen this come up especially when it comes to the various early intervention notices that servicers have to send to delinquent borrowers,” ...

Industry compliance officers, trade group representatives and legal experts at the American Bankers Association’s regulatory compliance conference, held in Orlando last week, expressed mixed sentiments about whether the CFPB ought to delay the effective date of the new requirements it is ushering in under the Home Mortgage Disclosure Act. They were responding to the suggestion of such a delay made by the Treasury Department in its recent report as per President Trump’s Executive Order 13772. “Obviously, a delay has to be for at least a year because the nature of HMDA is such that you can’t delay for six months,” Rodrigo Alba, the ABA’s senior vice president and senior regulatory counsel for mortgage finance, told an audience during a working ...