Compliance & Regulation

Wells Fargo and JPMorgan Chase have been sued by the law firm Baron and Budd alleging that the financial institutions illegally levied excessive and deceptive default service fees against borrowers who were late on mortgage payments.

Bond insurer MBIA Inc. has admitted to making errors in its application to regulators seeking to split the company in two.

FACTS - On Jan. 30, William Tro Goings of Sacramento, Calif., pleaded guilty in federal court to participating in a conspiracy to commit wire fraud for his role in a mortgage fraud scheme that defrauded a failed Sugar Creek, Mo. bank of more than $8.5 million.

Responses that have arrived in time to meet an extended deadline for comments related to a proposed SEC rule on conflicts of interest show at least one influential industry commentator is concerned that it could interfere with routine secondary mortgage market functioning unless adjusted.

Larry Fink, chairman and CEO of BlackRock Financial, is nobody's fool - not by a long shot. He cut his teeth at First Boston many moons ago, helped shape the MBS market, and then went on to create a financial services powerhouse: BlackRock

Often, companies adopt more aggressive compensation strategies hoping to maximize their competitiveness in the market. To do so, they will adopt practices that "sound" compliant but in actual practice clearly violate compensation rules. In other words, they have contracts that say one thing but practices that in fact violate the rules.

Federal Reserve Board Chairman Ben Bernanke called on regulators to "look carefully" at rules which diminish the origination of prudently underwritten mortgages, telling a gathering of home builders that the health of the housing market is central to the vitality of the economy as a whole.

Federal banking agencies seem to be making little progress in promulgating regulations that will set the ground rules for a revival of the private-label MBS market.

NCUA proposed new rules for troubled debt restructurings that will cover how all federally insured credit unions account for delinquencies, charge-offs and income related to troubled home mortgages and member business loans, as well as for how those loans are reported on NCUA's quarterly Call Reports.

Salt Lake City-based lender Primary Residential Mortgage Inc. has created a new “enterprise risk management” group with the goal of managing risk through the entire loan origination process and ensuring that the company has appropriate monitoring and evaluation policies.