Compliance & Regulation

A handful of state attorneys general are taking a hard line with mortgage servicers by demanding loan modifications and principal reductions for those borrowers whose rights may have been violated by robo-signing.

The crimes that contributed to historic levels of default may be creeping back into the industry, according to the latest quarterly Mortgage Fraud Risk Report from Interthinx.

Distressed loan investors in particular need to keep an eye on potential legal developments arising from recent foreclosure concerns because they could affect their rights one way or another.

In order to prevent fraudsters from flipping properties quickly at high appreciations, lenders will be focused in the coming months and year on putting a stop to “flipping” by putting processes in place to eliminate short-sale fraud.

My background with HMDA is long, beginning in 1988 when the Pulitzer Prize-winning series “The Color of Money” was published in the Atlanta Journal and Constitution. The articles, using the then-available HMDA data, documented that banks and savings and loan institutions made far fewer residential mortgage loans in black residential areas than in white residential areas, and raised the issue of possible unlawful discrimination in mortgage lending to the national spotlight.

The Government National Mortgage Association has finalized plans to increase the minimum net worth requirement on its MBS issuers to $2.5 million, from $1 million.

Mega-servicers like Bank of America and Ally Financial are kidding themselves if they think they can declare the foreclosure mess behind them after short self-investigations and blithely resume operations as before.

The Federal Housing Administration has rescinded a cap on the combined loan amount of first and second liens that some in the industry considered unnecessarily restrictive.

The Federal Reserve Board should exercise constraint in requiring escrow accounts on certain loans, according to state banking regulators, because it could impair the ability of community banks to originate jumbo loans.

Roy DeLoach is packing it in as CEO of the struggling National Association of Mortgage Brokers, but will serve as the trade group's chief (outside) lobbyist on real estate finance issues.