Compliance & Regulation

Standard & Poor’s said President Obama met with Treasury Secretary Timothy Geithner just before Geithner warned the company to expect a response to its downgrade of U.S. debt, an event that justifies its request to see White House communications to help defend fraud claims.

Private issuers need certainty to create a new secondary mortgage market, MBA and SIFMA officials say.

The Consumer Financial Protection Bureau levied a $83,000 civil money penalty on Monday against Connecticut-based First Alliance Lending, a specialty firm that focuses on providing loss-mitigation financing to distressed borrowers.

By now, every servicer appreciates the Consumer Financial Protection Bureau's single-point-of-contact expectations and the importance of using this staffing model to manage distressed borrowers. However, in order to outperform, servicers must go beyond SPOC and develop a “case ownership” perspective that more closely links all the people involved in servicing a borrower’s loan.

Prospect Mortgage did everything right to defend itself against overtime and minimum wage claims from salespeople, though some industry attorneys caution the rulings in its favor may have limited applicability.

Lenders should be aware auditors are focusing on 1099 payments due to the concern that the payments could be a vehicle for compensation no longer permissible under the Dodd-Frank Act.

The ability to repay rule states that a lender "shall not make a mortgage loan unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms."

Mortgage servicing has long been a scale business, but rising compliance costs are now threatening the survival of smaller operations that lack efficient systems or staff expertise, industry experts say.

The loans have better-than-average credit and home equity metrics, according to Standard & Poor's. The deal lacks fraud-related representations and warranties, but all loans are performing, DBRS finds.

One of the first court decisions related to new Dodd-Frank servicing regulations finds allegedly unfair loss mitigation and dual track foreclosure proceedings can be privately enforced, but to a limited extent.