Compliance

Sometimes, mortgage origination fraud is easy to detect and other times it is frustratingly difficult. When a borrower deliberately lies about income, employment or identity, the fraud is clearly visible. But what about the case of an owner-occupied loan where the borrower never moves in, but still makes the payments as agreed?

Federal regulators took another step last week toward lessening banks' reliance on credit ratings by proposing three methods for assessing risk on firms' trading books.

The drop over 3Q11 of commercial and multifamily loans is a credit positive for CMBS, according to Standard & Poor's in a note released Friday.

The Consumer Financial Protection Bureau had so far limited its complaint process to just credit cards. But CFPB began taking complaints related to home mortgages as of Dec. 1.

Among the many hurdles any return of the private-label securitized market will likely have to overcome are conflict of interest measures in Section 619 of Dodd-Frank and the Volcker Rule, which as noted in a recent American Securitization Forum seminar, are hitting some key deadlines this month and next year.

An industry hedge fund that selectively trades distressed mortgage assets is testing the use of borrower rewards for timely payment, with the aim of driving better performance, refinancing or modifications.

Attorney General Eric Holder this week appointed Michael Bresnick as the new executive director of President Obama's financial fraud enforcement task force, which includes mortgage oversight.

Agency prepayment speeds came in line with expectations in the 30-year sector, where they were up 3% from the previous month, according to Credit Suisse's fixed income research report Wednesday.

The Attorneys General of California and Nevada are combining their investigative forces to combat misconduct and fraud within the mortgage industry against state homeowners.

Bank of America Corp. has agreed to pay $315 million to settle claims that its Merrill Lynch unit made false and misleading statements about the quality of subprime mortgage-backed securities it sold to investors.

California attorney general Kamala Harris arrested three officers last week who were allegedly operating an illegal foreclosure rescue company.

A mortgage broker admitted in federal court to an extortion conspiracy that defrauded four individuals, including two police officers, out of their money and property.

The Federal Deposit Insurance Corp.is issuing "inquiry letters," followed by subpoenas, followed by lawsuits against brokers as well as the loan officers. Sometimes the FDIC skips the inquiry letter and other times it skips the subpoena and goes right to the lawsuit. How do we know?

The Government National Mortgage Association warned seven of its MBS issuers during the first nine months of 2011 that they are in violation of agency's rules, according to an audit by the General Accountability Office.

Mortgage insurance concerns and the possibility of a "disorderly" European recession are among the market risks that should be watched going forward, Credit Suisse strategists said in a global outlook conference call Monday morning.

GMAC Mortgage on Friday said it will no longer purchase loans originated by mortgage correspondents or brokers in Massachusetts, citing the regulatory environment in the state.

The Treasury Department this week unveiled a new joint task force to fight mortgage scams aimed at struggling homeowners seeking payment relief under the government’s Home Affordable Modification Program.

Massachusetts on Thursday sued the nation's five largest residential servicers, alleging their foreclosure practices were unlawful and deceptive.

The Federal Housing Administration is considering raising insurance premiums on loans above $625,500, according to HUD secretary Shaun Donovan.

Credit risk managers expect consumers will have trouble making payments on a variety of loan types, according to the European Credit Risk Survey taken by FICO and Efma.