Compliance

The operational risk that arises from a host of smaller details in today's dynamic loan origination market is outweighing fraud concerns when it comes to identifying potential buybacks, according to one executive.

It used to take several years for the Federal Housing Administration to track down its worst lenders and put a stop to their shoddy lending practices. Not any more.

Ranking Republican members on the House Financial Services Committee are none-too-happy about the proposed AG settlement with residential servicers, but what they really dislike is the concept of principal writedowns on troubled mortgages.

Three surviving spouses of reverse mortgage borrowers have sued HUD, alleging that what HUD characterized in 2008 as a clarification of its policy constituted a change from long-established federal rules that should have protected them from having to repay lost equity in order to stay in their homes.

Radius Capital Corp. and its president, Robert DiGiorgio, have been charged by the Securities and Exchange Commission with securities fraud for allegedly making false and misleading statements related to the company’s issuance of mortgage-backed securities guaranteed by Ginnie Mae.

Mortgage fraudster Michael McGrath, who siphoned off $140 million of credit union funds through his company, U.S. Mortgage Corp. and its CU National Mortgage affiliate, will serve at least 12 years of a 14-year prison term meted out by a federal judge two weeks ago, according to prosecutors.

The Department of Housing and Urban Development's inspector general found "systemic problems" in lenders' compliance with underwriting requirements for Federal Housing Administration loans.

Catherine Kissick, a well known figure in warehouse lending circles, late Friday pleaded guilty to criminal charges tied to the collapse of Taylor, Bean & Whitaker, a large FHA lender based in Ocala, Fla.

Connecticut attorney Richard Novak pleaded guilty last week in U.S. District Court to making a false statement on a federal mortgage loan document.

As scammers continue to prey on vulnerable, financially stressed homeowners, the California Department of Real Estate is warning consumers to be wary of promises for loan modification and mortgage relief.

In violation of the Servicemembers Civil Relief Act, JPMorgan Chase has been overcharging about 4,000 military members on their home loans and improperly foreclosed the homes of 14 military families.“Chase has a very strong history of supporting military and veterans’ organizations, which makes the mistakes we made here particularly painful,” JPMorgan Chase said in a statement.

ML 11-02 –Quality Control Plans must be updated. QC plans must now provide for monitoring third party originators and underwriters. Review must include thresholds based on volume, past experience and other factors as set forth in 4060.1 Rev 2, Para. 7-6. QC Plan must include methodology of review, results and corrective actions taken.

The FBI investigation into a massive fraud at U.S. Mortgage Corp. and its CU National subsidiary orchestrated by Michael McGrath was initially uncovered by one of McGrath's business partners, who was negotiating his own plea in a separate mortgage fraud case.

The Federal Court of the Eastern District of North Carolina sentenced Lynda Steele to serve 41 months in prison, followed by three years of supervised release for committing real estate fraud in Cumberland County.

A former Austin, Texas, businessman has been indicted by a federal grand jury in connection with a Ponzi scheme that victimized more than 300 individuals and resulted in a total estimated loss to investors of $41 million.

The Georgia Department of Banking and Finance finalized a cease and desist order on Feb. 25 against the mortgage lending company Mortgage Direct Inc.

Juan Rangel, Downey, Calif., has been sentenced to 22 years in Federal prison for running two fraud schemes—a Ponzi scheme that took in at least $30 million from more than 500 victims, and a mortgage fraud scheme that preyed on working-class homeowners by stealing the equity from their homes and secretly taking title to their properties.

Big banks and Washington aren't on the same page—again.

Carrington Capital Management, a former subprime securitization specialist, salvaged an impressive amount of money from its low-ranked residential mortgage-backed securities, thanks to the unusual strategies of its servicing affiliate.

Investors and analysts have howled over specific mortgage servicers' handling of delinquent loans for years. The ratings industry generally has not.