BLINDSIDED: "Now we are rethinking whether we want to lend in Nevada," says Clem Ziroli, president of First Mortgage. "Our collateral has basically been robbed from us."
Mortgage lenders are threatening to halt lending on condominiums in Nevada after the state Supreme Court upheld a law allowing homeowners associations to foreclose ahead of first mortgage holders.
"We do not regulate you. We do not supervise you. We do sue you," the Justice Department's Steven Rosenbaum told bankers.
Regulators recently offered a rare behind-the-scenes glimpse of what areas they are targeting for enforcement, saying that potential fair lending violations like redlining and how mortgages are priced and serviced remain top priorities for the future.
There's no longer much leeway in how to handle mods, especially in a transfer, Wingspan's Robert Shiller said.
Heightened regulatory oversight of servicing rights transfers means servicers must clamp down on processes while investors take stock of their own procedures.
The Consumer Financial Protection Bureau's action against Flagstar Bank on Monday marked a series of firsts for the agency, including the first time it enforced its new mortgage servicing rules and the first time it banned a servicer from servicing new loans until fixes are made.
The regulator of Fannie Mae and Freddie Mac should require banks and mortgage lenders to obtain independent, third-party tests to ensure compliance with its guidelines, according to a government watchdog report.
At least two mortgage servicers say they are close to being released from an OCC enforcement order that required 14 of the nation’s largest bank servicers to fix flaws in their foreclosure reviews. But the OCC says it has set no timetable for freeing any of the banks from the 2011 order.
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