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Category Archives: Legislation/Regulation

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Wells Accused of Profiting from Foreclosure Relief Program

A recent class action lawsuit filed on behalf of thousands of homeowners in New York against Wells Fargo alleges that while the bank received $25 billion in government bailout funds it failed to make a good faith effort to help borrowers avoid foreclosure in compliance with the federal government’s Home Affordable Modification Program (HAMP). The complaint, filed… Continue Reading

CFPB, DOJ Show Renewed Interest in Pursuing “Redlining” Cases

Evidence is mounting that the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) are taking a renewed interest in investigating possible redlining—the practice of lenders charging certain groups more for products, or altogether excluding minorities within certain geographic areas. There has been a substantial increase in recent months of warnings by government… Continue Reading

Quicken Loans Takes on the DOJ & HUD

Quicken Loans, the nation’s largest Federal Housing Administration (FHA)-backed mortgage lender, filed suit on Friday, April 17 in the United States District Court in Detroit against the United States Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD). In the suit, Quicken alleged that it is a target of a probe in… Continue Reading

MBA’s Legal Issues & Regulatory Compliance Conference

On Sunday, May 3, 2015, I will serve as a panelist at the Mortgage Bankers Association’s Legal Issues & Regulatory Compliance Conference at the Sheraton Chicago Hotel & Towers in Chicago, IL. More than 800 attorneys, compliance officers, company executives and government relations associates will convene to discuss the latest regulatory, supervisory, enforcement and litigation issues within the mortgage… Continue Reading

BofA’s Inconsistent Positions

Bank of America recently moved to dismiss a lawsuit filed by Ambac Assurance Corp. in New York state court, alleging $600 million in damages for fraudulent inducement in connection with payments it made under policies insuring faulty residential mortgage-backed securities issued by Countrywide. In its complaint filed at the end of 2014, Ambac claims that… Continue Reading

Fraud Verdict Against Countrywide & BofA Upheld

BofA’s “hustling” attempt to overturn a $1.27 billion judgment against it and Countrywide—along with the individual defendant identified in the next paragraph, the “Defendants”—in the U.S. District Court for the Southern District of New York for fraud in the sale of loans to Fannie Mae and Freddie Mac has proved unavailing. Judge Jed Rakoff of… Continue Reading

Huge Settlements Between S&P, Government

2015 is leaving Standard and Poor’s (S&P) quite a bit poorer. Yesterday, the major credit rating agency agreed to pay $1.375 billion to resolve lawsuits brought against it by the U.S. Department of Justice and attorney generals from 19 states and the District of Columbia regarding S&P’s pre-crisis ratings of mortgage-backed securitizations (MBS) and collateralized… Continue Reading

Newly Passed Bill May Impact Dodd-Frank Act

The House of Representatives passed legislation that could loosen some of the restrictions imposed by Dodd-Frank on big banks. The bill, Promoting Job Creation and Reducing Small Businesses Burden Act, passed by a margin of 271-154, and contained the following measures: Delay implementation of the “Volcker Rule” until 2019. Exempt some private equity firms from… Continue Reading

Supreme Court Eases Requirements for Homeowners Rescinding Mortgages

The U.S. Supreme Court recently held in Jesinoski v. Countrywide Home Loans, Inc. that borrowers exercising their right to rescind mortgages under the Truth in Lending Act (“TILA”) only need to provide written notice to creditors within three years of the loan being issued, instead of bringing a lawsuit within that period. The high court… Continue Reading

Fighting Back Against CFPB Demands

An increasing number of banks, mortgage lenders, auto finance companies and other financial services industry participants are dealing with inquiries, investigations and actual or threatened legal claims from the Consumer Financial Protection Bureau (CFPB) and other enforcement agencies related to the fairness of their lending, servicing and collection practices. Noting that growing trend, a banking… Continue Reading

A Digital Encyclopedia: Bilzin Sumberg’s Blogosphere

Bilzin Sumberg prides itself as being the go-to firm for domestic and international investors and corporations doing business in Florida and beyond. We aim to provide our clients with legal and business insight into the industries and areas they work in through our various blogs, which hone in on key issues or areas of interest… Continue Reading

BofA Underwater Mortgage Cases Hit Supreme Court

The U.S. Supreme Court will hear two cases brought by Bank of America regarding whether a second mortgage on an underwater property can be voided during Chapter 7 bankruptcy. Both cases involve Florida homeowners who sued to void second mortgages when the debt owed to the holder of the first mortgage exceeded the value of… Continue Reading

Regulators Increase Scrutiny of Wall Street Lending

Federal bank regulatory agencies are significantly increasing their scrutiny of Wall Street bank lending, moving from annual reviews to a system of monthly audits in a major effort to curtail aggressive underwriting practices. Until recently, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (OCC) have monitored… Continue Reading

Protecting Your Company Against CFPB Investigations & Investors’ Mortgage Buyback Claims

What are the boundaries of the Consumer Financial Protection Bureau’s authority? How might those boundaries continue to expand in the future? Are there ways that the CFPB can take action against a company even if it does not have true supervisory authority? These are just some of the questions that frustrated and concerned financial institutions… Continue Reading

Banks May Be Required to Increase Reserves

The Federal Reserve is expected to require the biggest U.S. banks to increase reserves in an effort to prevent the possibility of another financial crisis. Federal Reserve Governor Daniel K. Tarullo is scheduled to testify before the U.S. Senate Committee on Banking, Housing and Urban Affairs on Tuesday to introduce new rules, which would impose… Continue Reading

Former Analyst Claims Moody’s Falsely Inflated Ratings

Former Moody’s analyst, Ilya Kolchinsky, has accused the credit rating powerhouse of overstating its ratings for countless toxic mortgage-backed securities that caused the financial meltdown in 2008, misleading investors and costing the U.S. billions in funds spent bailing out Wall Street’s too-big-to-fail banks. Kolchinsky’s 107-page False Claims Act complaint, filed in 2012, was recently unsealed… Continue Reading

Mortgage Loans: Deutsche Bank v. Quicken Loans

We previously posted about ACE Securities Corp. v. DB Structured Products, Inc., 977 N.Y.S.2d 229, 231 (N.Y.A.D. 1st Dept. Dec. 19, 2013), which is a critical ruling out of New York’s intermediate state appellate court. In that case, the Appellate Court held that under New York law, the statute of limitations on a mortgage buyback… Continue Reading

Bank of America’s $16.65 Billion Settlement

In what is being reported as the largest settlement ever between the U.S. and a single business entity, Attorney General Eric Holder and Associate Attorney General Tony West announced Thursday that Bank of America Corp. (“BofA”) has agreed to pay $16.65 billion to settle accusations by the Department of Justice that it, as well as… Continue Reading

Citigroup Settles with DOJ for $7 Billion

Citigroup announced last week that it will pay $7 billion to end an investigation by the U.S Department of Justice into misconduct related to its mortgage securitization practices. The blockbuster settlement came days before DOJ lawyers were expected to file a lawsuit. $4.5 billion will go towards settling civil claims related to the DOJ probe,… Continue Reading

Buyback and Indemnifications: The New Dangers

On Thursday, July 31, I will be speaking as part of a panel of business professionals during a live webinar about the continuing repurchase and indemnification risk surrounding mortgage buybacks. This panel will assist mortgage professionals in determining where the greatest exposure of risk lies, and will offer some insightful tips on how best to… Continue Reading

Suntrust Reaches $320 Million Settlement

SunTrust Banks (“SunTrust”) reached a settlement with Federal prosecutors last week in which it agreed to a $320 million settlement for a combination of consumer relief and housing counseling services. SunTrust issued a press release this past weekend outlining the agreement. Specifically, it has agreed to pay $179 million in consumer remediation, $20 million to… Continue Reading

Main Street Cashes $3.1 Billion in Checks from Wall Street

With the mortgage crisis almost a decade in the rear-view mirror, some harmed homeowners are just now starting to see reparations for the transgressions of the country’s largest financial institutions. Beginning in January 2013, thirteen banks—including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo—settled 2011 and 2012 actions instituted by… Continue Reading