Tag Archives: Mortgage Regulation

The Office of Mortgage Settlement Oversight recently chose five new firms to serve as its eyes and ears on the ground as the $25 servicer settlement grinds forward. The new secondary professional firms - including BKD, LLP; Baker Tilly Virchow Krause, LLP; Crowe Horwath, LLP; Grant Thornton, LLP; and McGladrey, LLP - will assist settlement monitor Joseph A. Smith, Jr., over the next three and a half years. Each firm will assist BDO Consulting, a division of BDO USA, LLP, and the primary professional firm responsible for evaluations.

Lake Research Partners released the results of an opinion poll showing that financial reforms enacted in recent years remain popular with potential voters. In light of events leading to 2008's financial meltdown, potential voters seem to overwhelmingly favor financial reform laws designed to prevent abuse. Nearly three-quarters (73 percent) of respondents favor the Dodd-Frank financial reforms, while only 20 percent expressed disagreement.

Delaware attorney general Beau Biden announced Friday that the state has reached an agreement with Mortgage Electronic Registration Systems, Inc., (MERS) about implementing reforms. Biden filed suit against MERS last year after hearing from homeowners in the state who were ""unable to have meaningful conversations about saving their home"" and who could not find out who owned their mortgage.

Wells Fargo wrote a check for $175 million on Thursday to settle claims that independent brokers drove a disproportionate number of otherwise creditworthy minority borrowers to higher-priced variable mortgages in the lead-up to the financial crisis. The payout will tie off a suit filed by federal authorities earlier Thursday that claimed discriminatory practices from 2004 to 2009 had negatively impacted more than 34,000 black and Hispanic borrowers. Wells Fargo denied any of the claims and took action Thursday to stop originating loans with independent mortgage brokers by Friday.

The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state's foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers.

The Consumer Financial Protection Bureau faces a new legal challenge as a Texas community bank and two conservative groups launch a lawsuit to undo it and the financial reform law that created it two years ago. The suit challenges the constitutionality of the CFPB and Dodd-Frank Act, as well as Richard Cordray's appointment. A spokeperson for the CFPB said the lawsuit appears to dredge up old arguments that have already been discredited.

When hearing about the different narratives on the housing crisis, oftentimes the private sector is largely blamed. During an event hosted by The American Enterprise Institute (AEI) Wednesday, a recently published book was discussed which highlights a different perspective on the story of the housing market crash. Oonagh McDonald, a UK-based academic, wrote the book titled ""Fannie Mae and Freddie Mac: Turning the American Dream Into A Nightmare"" and asserts that the failures in the housing industry started with 'affordable housing ideology,' and was worsened by policy makers and the GSEs.

The drop in existing home sales reported by the National Association of Realtors (NAR) Thursday likely stemmed from a lack of distressed properties on the market, according to IHS Global Insight. In May, existing-home sales made a fall of 1.5 percent from the month before. The share of investor purchases also declined, which IHS economist Patrick Newport said is likely due to a drop in the number of distressed homes. According to the NAR report, investor purchases made up 17 percent of homes sales in May, down from 20 percent in April and 19 percent in May 2011.

Connecticut attorney general George Jepsen announced Friday that programs of benefits resulting from a $25 billion mortgage foreclosure servicing settlement are moving forward in the state. Out of Connecticut's $190 million share of the settlement funds, an estimated $119 million is going into loan modifications. The banks have also agreed to provide $36 million in refinancing to Connecticut borrowers whose homes are worth less than their mortgages. Furthermore, they agreed to provide cash payments of about $1,500 to an estimated 7,500 borrowers in the state who experienced loan servicing abuses and lost their homes to foreclosure between the start of 2008 and the end of 2011.

Parties to the landmark mortgage servicing settlement appointed one man to oversee $25 billion in compliance. In an interview with DS News, Joseph A. Smith, onetime banking commissioner for North Carolina and ex-nominee to head the Federal Housing Finance Agency, lays out the role he envisions playing as he monitors funds for homeowners, states, and the federal government. The settlement monitor speaks with an understated tone about his stewardship of the historic settlement, which 49 state attorneys general and federal officials completed in February.