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Servicer’s Error Leads to $16 Million Award

Kate Berry reported in American Banker and SourceMedia’s National Mortgage News on how a $616 servicing error snowballed into a $16 million jury verdict. It was reported that a jury last month awarded $514,000 in compensatory damages and $15.7 million in punitive damages to a California homeowner, who waged a multi-year battle to block a foreclosure by the private-label… Continue Reading

FHFA’S 2013 Report Shows Record Income for Fannie Mae and Freddie Mac, But Earnings Are Likely to Fall

On Friday, Federal Housing Finance Agency (FHFA) released its 2013 Report to Congress, revealing recent GSE milestones but anticipating future problems. The annual report is statutorily-required under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008 and the Dodd-Frank Wall Street Reform… Continue Reading

Massachusetts Sues Fannie and Freddie for Blocking Home Buybacks

Earlier this month, Massachusetts Attorney General Martha Coakley initiated an action against Fannie Mae, Freddie Mac and the Federal Housing Finance Agency for allegedly illegally impeding non-profit foreclosure buyback programs. These buyback programs purchase properties in foreclosure and then resell the properties to the prior owners at an affordable price, helping low-income residents keep their homes…. Continue Reading

Justice Department Keeps its Distance From Szymoniak Mortgage Fraud Lawsuit

As detailed in an August 2013 Salon article by David Dayen and a September 2013 Bloomberg Businessweek article by Karen Weise, West Palm Beach, Florida homeowner and attorney Lynn Szymoniak helped blow the whistle on widespread fraud in the mortgage industry. Over the past few years, Szymoniak has helped the U.S. government recover millions of dollars from… Continue Reading

SEC “Fearful” of Wall Street Banks

Following the financial crisis, the U.S. Securities and Exchange Commission has received sharp criticism from the public for its seemingly weak enforcement of Wall Street’s too big to fail banks. Surprisingly, this sentiment was recently echoed from within the SEC. James A. Kidney, a retiring SEC trial attorney, no longer muffled by his employment with… Continue Reading

Wells Fargo Employee Admits Role in $40.8 Million Straw Buyer Scheme

Last Friday, a former Wells Fargo branch manager, sales manager and loan officer, Robert Serao, pled guilty to conspiracy to commit wire fraud. The charge stems from Serao’s involvement in a $40.8 million mortgage fraud scheme during his time at Wells Fargo. Allegedly working in concert with at least nine others, Serao used “straw buyers”… Continue Reading

CFPB Sues Mortgage Insurer Over Illegal Kickback Scheme

It looks like yet another illegal kickback scheme involving mortgage insurance has been uncovered in the residential mortgage industry. Recently the Consumer Financial Protection Bureau (“CFPB”) filed a lawsuit in the U.S. District Court for the Southern District of Florida against Republic Mortgage Insurance Company (“RMIC”), alleging that it had developed an illegal scheme in… Continue Reading

FHA Announces Plans to Lower Mortgage Insurance Policy Caps

Last Friday, the Federal Housing Administration announced that it will reduce the maximum threshold for the high-price mortgages it is willing to insure. This change was called for by the Housing and Economic Recovery Act of 2008, but was delayed several times in response to continuing economic turmoil. Currently, in the highest cost areas, the… Continue Reading

Bank of America and Freddie Mac Settle Mortgage Loan Claims

Add yet another major settlement to the still-growing list of huge payouts by the nation’s largest banks to settle claims over toxic mortgage-backed securities. Bank of America has now agreed to pay $404 million to Freddie Mac to resolve all repurchase liabilities on home loans that it sold to the government-controlled mortgage company from 2000… Continue Reading

JPMorgan Chase Agrees to $13 Billion Settlement with the U.S. Justice Department for Knowingly Selling Toxic Mortgage-Backed Securities

On Tuesday, the United States Justice Department announced that it finalized a settlement agreement with JPMorgan Chase for $13 billion. This settlement will resolve a multitude of state and federal investigations into JPMorgan Chase’s sale of residential mortgage-backed securities to investors between 2005 and 2008. In addition to paying fines for securities violations, the proceeds… Continue Reading

FHFA Restricts Forced-Placed Insurance Practices

We recently commented on JPMorgan Chase’s blockbuster agreement to resolve a class-action lawsuit for $300 million brought by more than a million homeowners nationwide. The dispute centered on allegations that Chase profited by collecting kickbacks from insurance companies for imposing force-placed insurance policies at excessive rates on properties that secured its loans where coverage had… Continue Reading

JPMorgan Chase Agrees to Settle Forced-Placed Insurance Class-Action Lawsuit for $300 Million

Forced-Place Insurance Business Surged Following the Housing Collapse JPMorgan Chase and Assurant Inc. recently agreed to settle a class-action lawsuit initiated in June 2012 for $300 million brought by a class of 1.3 million homeowners nationwide who claimed that they were overcharged for forced-placed insurance. The plaintiffs have also entered into a separate settlement for… Continue Reading

Wells Fargo Settles Mortgage Claims With FHFA For Close To $1 Billion

Add another mega-settlement to the rapidly growing list of huge payouts by the nation’s largest banks to federal agencies. Wells Fargo reportedly has now agreed to pay the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, close to $1 billion. The settlement payment will resolve claims that Wells Fargo sold toxic mortgage-backed… Continue Reading

BofA’s Countrywide Found Responsible For Defrauding Fannie Mae & Freddie Mac

A federal jury ruled yesterday that Countrywide, now owned by Bank of America, defrauded Fannie Mae and Freddie Mac by selling them defective mortgages in advance of the great financial crisis of 2008. A former Countrywide executive, Rebecca Mairone, was also found liable in the case. Whistleblower Exposed Countrywide’s “Hustle” Program The Justice Department lawsuit… Continue Reading

Housing Market Largely Escapes Damage From Government Shutdown, For Now

The mortgage market should only be minimally impacted by the recent government shutdown The federal government shut down at the stroke of midnight on September 30th as the Congress failed to pass a bill to continue funding the government. The repercussions are many, including preventing 800,000 Americans from getting paid, suspending various government services, and… Continue Reading

City of Richmond, California Backs Plan to Use Eminent Domain to Seize Bad Mortgages

Richmond, CA is first municipality to use eminent domain on underwater mortgages Richmond, California’s leaders approved a controversial plan earlier this month to become the first municipality in the nation to use eminent domain to rid itself of underwater mortgages. The plan was approved by the Richmond city council 4-3 following a long and contentious public meeting… Continue Reading

A Time for Reflection: the Fifth Anniversary of Lehman Brothers’ Collapse

Obama claims progress has been made Sunday, September 15, 2013, marked the fifth anniversary of Lehman Brothers’ bankruptcy, the largest in U.S. history. It is widely believed that Lehman’s meltdown set off a domino effect that led to the global financial crisis and proved to be a major contributing cause of the housing market collapse…. Continue Reading

DOJ and SEC File Suits Against Bank of America

Civil Lawsuits Filed Stop me if you have heard something like this before.  The Department of Justice announced a civil lawsuit on Tuesday alleging that Bank of America defrauded buyers of mortgage-backed securities by lying about the quality of the home loans involved. The Securities and Exchange Commission also announced a parallel case against BofA…. Continue Reading

Lehman Reaching Beyond the Grave

Lehman is demanding millions of dollars from non-profits As widely reported, in the latest Lehman bankruptcy “fundraiser,” managers of the Lehman estate are now demanding millions of dollars from non-profit retirement homes, colleges and hospitals.  Lehman claims that it was somehow “shortchanged” by multiple non-profit organizations that were forced to pay to exit derivatives that… Continue Reading

Big Banks Fail 2012 Fannie Mae Star Program

Fannie’s Star Program reveals big banks failed to meet minimum mortgage servicer performance requirements According to a report released Tuesday by Fannie Mae, the big banks who love to act like “injured innocents” when it comes to making mortgage repurchase and indemnification demands on loan originators had their own substantial problems servicing the loans that they… Continue Reading