The New York Department of Financial Services made some concessions to industry participants by revising proposed cybersecurity standards. Some mortgage-industry officials were happy with the revisions while reiterating concerns about the proposed standards. The NYDFS first proposed cybersecurity standards in September. The proposal was the first of its kind from a state regulator and more prescriptive than guidance from the Federal Financial Institutions Examination ...

A New York appellate court this week denied Credit Suisse’s motion to dismiss claims made by NY Attorney General Eric Schneiderman in relation to the creation and sale of MBS to investors. In a majority decision, the New York Supreme Court held that the AG’s claims of securities fraud and persistent fraud or illegality are not time-barred, finding that the claims under the state Martin Act and Executive Law are governed by the six-year statute of limitations rather than the three-year limitations found in Section 214(2) of the state’s Civil Practice Law and Rules (CPLR). As of March 21, 2012, the parties entered...

A recent ruling by Florida’s Fifth Court of Appeal, if finalized, will affect any FHA foreclosure case that references the Department of Housing and Urban Development’s mandatory face-to-face interview with borrowers, according to industry attorneys. In Palma v. JPMorgan Chase Bank, Nat’l Ass’n, et al., the state appellate court found that HUD’s face-to-face interview requirement is “a condition precedent to foreclosure” for Florida mortgages that specifically incorporate the HUD regulation. Prior to the decision, no Florida appellate court has held that HUD’s requirement constitutes a condition precedent to foreclosure, according to attorneys with the Richmond, VA, law firm McGuireWoods. “Although this decision is not yet final and rehearing is likely, it has far-reaching impacts on the conditions and evidence required for foreclosure trials throughout Florida and is the ...

Despite higher interest rates, publicly traded mortgage stocks have been rising since the election, but market watchers are cautious that recent gains could evaporate quickly. “Two things are going on here,” said Henry Coffey, an equities analyst at Wedbush Securities. “We’ve had a massive market rally, especially in financial stocks. But the general consensus is that the new administration is going to be less punitive than the current one.” Coffey added...[Includes one data table]

Washington state is on track to become the first state to set capital requirements for nonbank mortgage servicers. A proposed rule has been met with resistance from the Mortgage Bankers Association, with the trade group calling on the state to halt the process and wait for pending national standards from the Conference of State Bank Supervisors. In September, Washington’s Department of Financial Institutions proposed capital requirements for nonbank servicers licensed in the state. Under the proposal, servicers would have to meet capital requirements set by the government-sponsored enterprises or a government entity. For servicers that solely handle non-agency mortgages, the Washington DFI proposed...

State housing finance agencies’ downpayment assistance poses minimal risk to the FHA, and the scope of the problem is nowhere near the size suggested by the Department of Housing and Urban Development’s inspector general, according to a new study by the Urban Institute. The study’s conclusion would appear to bolster HUD’s defense of permissible downpayment assistance in a disagreement with the agency’s inspector general. The dispute arose from an IG audit of NOVA Financial & Investment Corp., an originator of FHA-insured mortgages with downpayment assistance provided by state housing finance agencies (HFAs). In a July 2015 report on NOVA’s audit, the IG alleged that some HFAs were allowing downpayment assistance that was being paid for through higher mortgage rates, in violation of FHA requirements for downpayment assistance. It also put FHA’s mortgage insurance fund at ...

The Department of Housing and Urban Development inspector general, over the last several weeks, has reported a series of final civil actions that resulted in an enforcement action or monetary settlement between an FHA lender and the federal government. On Oct. 6, the IG announced the results of an audit of TXL Mortgage Corp., a direct endorsement lender, in Houston. The audit found TXL in violation of HUD requirements and that it had no acceptable quality-control plan in place. Specifically, 16 of the 20 sample loans the IG reviewed did not comply with HUD standards. Of the 16 loans, eight had significant underwriting defects and failed to qualify for FHA mortgage insurance. Two loans qualified but were over-insured, according to the report. As a result, TXL exposed HUD to more than $713,000 in unnecessary insurance risk and caused the department to incur more than ...

RBS Securities has agreed to pay $120 million to the state of Connecticut to resolve an investigation into its underwriting of residential MBS shortly before the 2008 collapse of the financial markets. CT Attorney General George Jepsen and Department of Banking Commissioner Jorge Perez announced the agreement, which, they said, is the largest single settlement in Connecticut’s history. It also ends a four-year state investigation into RBS’s securities underwriting and due diligence practices. At issue were...

Cybersecurity rules proposed by the New York Department of Financial Services this month are seen as the first of their kind from a state regulator and more prescriptive than guidance from the Federal Financial Institutions Examination Council. The proposed standards would apply to a wide range of companies regulated by New York, including mortgage lenders and servicers. Under the proposal, financial institutions would be required to establish a cybersecurity program ...

The volume of originations by state-licensed companies, number of active loan originators and number of mortgage companies all increased in the second quarter, according to an Inside Mortgage Trends analysis of data from the Conference of State Bank Supervisors. State-licensed lenders reported $266.55 billion in originations during the second quarter of 2016 (excluding reverse mortgages), marking the highest quarterly volume since the state regulators started collecting ...