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Mortgage Crisis Watch Business and legal issues affecting: loan repurchases | mortgage-backed securities | mortgage insurance

Category Archives: Mortgage Repurchase

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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

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

Former JPMorgan Chase Insider Blows the Whistle

Matt Taibbi of Rolling Stone recently profiled the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking in his article, The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare. Alayne Fleischmann, a former Chase manager, revealed the true reason why JPMorganChase settled the claims brought by the DOJ… 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

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

Big Banks Argue that Shorter Limitations Period Should Apply to MBS Claims

Recently, the defendants in FDIC as Receiver for Colonial Bank v. Chase Mortgage Finance Group, et al (Civ No. 1:12-cv-06166) filed a motion for judgment on the pleadings, asking the court to dismiss as time-barred the securities violations alleged against them by the FDIC.  In light of the Supreme Court’s holding in CTS Corp. v…. Continue Reading

Robo-Signing Still Making Headlines As Wells Fargo Settles Another Lawsuit

“Robo-signing,” the term coined to refer to bank officials who quickly approved mortgage foreclosure documents without actual knowledge of the validity of the grounds for foreclosure, has been spurring lawsuits and making headlines since as far back as 2010. It was in the news again with the recent settlement by Wells Fargo of another robo-signing… Continue Reading

Aurora Resolves Mortgage Modification Class-Action Lawsuit for $5.3 Million

A former goliath of the non-prime lending market, Aurora Loan Services, LLC (“ALS”), recently resolved a class-action lawsuit alleging that it fraudulently induced distressed California borrowers to enter into purported “workout” agreements to extract unearned payments. ALS was one of many servicing affiliates of big banks that created, and profited off of, various reduced documentation… Continue Reading

First Horizon Reaches Mortgage Loan Settlement With Freddie Mac

There is now yet another settlement in the mortgage loan industry to report. First Horizon National Corp. announced last week that it has entered into a definitive resolution agreement with Freddie Mac regarding loan repurchase issues. The agreement purportedly settles all representation and warranty claims related to loans sold by First Horizon to Freddie Mac from… Continue Reading

Derivative Suit Filed Against JPMorgan Alleges Culture of Risk

Adding to JPMorgan Chase’s widely publicized recent legal woes, shareholder Bradley P. Miller filed a derivative suit against the bank and its directors in California federal court on January 23, 2014, as a result of the $20 billion in fines the bank paid last year for nearly a decade’s worth of alleged wrongdoing. “Defendants put… Continue Reading

Federal Court Follows Recent Statute of Limitations Decision for Mortgage Buyback Claims

ACE Securities Case Determined that Statute of Limitations Begins at Sale of the Loan; Other Courts Have Begun to Follow Suit We recently posted about a critical ruling out of New York’s intermediate state appellate court, the case of ACE Securities Corp. v. DB Structured Products, Inc., 977 N.Y.S.2d 229, 231 (N.Y.A.D. 1st Dept. Dec. 19, 2013)…. Continue Reading

FHFA Mortgage Repurchase Lawsuit Against Credit Suisse Dismissed For Failing To Allow Time For Cure

Rejecting an all-too-common strategy among mortgage investors of “shoot first, talk later,” New York state judge Eileen Bransten has dismissed several mortgage repurchase lawsuits originally filed by the Federal Housing Finance Agency (“FHFA”) against a Credit Suisse affiliate, ruling that the suits were filed before Credit Suisse had an opportunity to repurchase the subject loans or otherwise… Continue Reading

NY Appellate Court Reverses Decision on Statute of Limitations for Mortgage Buyback Claims

On December 19, 2013, correspondent lenders were the beneficiaries of a long-awaited common sense ruling on when the statute of limitations begins to run under New York law for purposes of a mortgage buyback claim. The common-sense answer: when the loan was sold by the correspondent lender (as we have been saying all along!). Statute… Continue Reading

BofA $1.4 Billion Settlement Talks with Freddie Mac

Bank of America and Freddie Mac are currently attempting to resolve a mortgage repurchase dispute in which Freddie Mac claims that Bank of America should have to buy back more than $1.4 billion in mortgage loans it claims were defective. The Wall Street Journal has reported that Bank of America, which is still recovering from… Continue Reading

Upcoming MBA Conference: November 20 in Boca Raton

I will be a panelist at the Mortgage Bankers Association’s (MBA) upcoming Accounting and Financial Management Conference 2013 in Boca Raton, Florida. I will participate in a session on November 20 at 4:15pm entitled “Managing and Accounting for Risk of Repurchases, Indemnifications and Compensatory Fees.” Brandon Coleman, CPA, a partner in Deloitte’s Accounting National Office,… Continue Reading

Wells Fargo Settles Mortgage Buyback Litigation with Freddie Mac for $869 Million

Under Threat of Having to Repurchase Thousands of Home Loans Sold to Freddie Mac Prior to January 1, 2009, Wells Fargo Agrees to Resolve all Remaining Claims in a Single $780-Million Cash Payment As of June 30 of this year, Wells Fargo & Co., this nation’s largest mortgage lender, had received demands to repurchase $1.4… Continue Reading

Upcoming MBA Regulatory Compliance Conference: September 29 in Washington, D.C.

I will be a panelist at the Mortgage Bankers Association’s (MBA) upcoming Regulatory Compliance Conference 2013 in Washington, D.C. I will participate in a session on Monday, September 30 at 1.30 p.m. entitled “Addressing Repurchases in the New Rep and Warrant Model.” The session will address the latest developments involving the GSEs and FHFA, as well as private investors.  We… Continue Reading

Judge Limits Damages Recoverable On Repurchase Claims

 “Purchase Price” used as contractual measure of damages In an opinion refusing to dismiss a lawsuit by several RMBS mortgage trusts in connection with $1.6 billion of mortgage loans, Judge Harold Baer, Jr. of the U.S. District Court for the Southern District of New York, held that the plaintiffs would be limited to the loan… Continue Reading

Private Mortgage Insurers Return to Profitability after Housing Crisis

Best Quarter Posted in 6 years It should be no surprise that the private mortgage insurance industry was nearly decimated in the wake of the housing crisis. During that tumultuous time, the private mortgage insurers that survived lost a combined $20 billion. However, it appears that the tide has finally begun to turn. Diana Olick of… Continue Reading

Federal Criminal Investigation of JPMorgan

Preliminary conclusions suggest that JPMorgan may have broken federal laws with its sale of mortgage securities The civil division of the Justice Department has preliminarily concluded that JPMorgan broke federal laws in connection with its sale from 2005 to 2007 of subprime and Alt-A residential mortgage securities, and the bank is now under criminal investigation. Federal prosecutors are examining… Continue Reading

Proposed new rule under Dodd-Frank Act

Key exemptions in the Dodd-Frank Act allowed lenders to securitize risky mortgages In 2011, in an effort designed to prevent a repeat of the often times shoddy underwriting practices that were pervasive during the years leading up to the current mortgage crisis, the Federal Deposit Insurance Corporation and the Federal Reserve proposed a rule under… Continue Reading