Compliance

Software solutions provider MortgageFlex Systems Inc., Jacksonville, Fla., has entered into a partnership with Interthinx of Agoura Hills, Calif., in an effort to integrate within the same platform complementary tools that combine fraud prevention with predatory lending management.

Since the government seized control of Fannie Mae and Freddie Mac in the fall of 2008, the two have spent more than $160 million defending the firms and their former top executives in civil lawsuits.

A class action filed in New York over $3.4 billion in two mortgage-backed securities offerings ruled in favor of the banks that issued the MBS reaffirms that the law does not bend to political correctness.“Together we stand” may be valid in life but not in a court of law. The U.S. District Court for the Southern District of New York denied class certification in a mortgage-backed securities lawsuit that alleged misstatements about residential mortgage loan origination practices in the offering documents for securities backed by those mortgage loans.

The U.S. Department of the Treasury ("Treasury") gives notice of the establishment of a Privacy Act System of Records primarily for the benefit of the new Consumer Financial Protection Bureau which will become active July 21. Comments are being sought until Feb. 9. This new system of keeping records will also become effective Feb. 9.

The nation's two largest mortgage servicers—Bank of America and Wells Fargo & Co.—are among the most sued financial service firms in the nation, according to a new tally from Institutional Risk Analytics.

NCUA told a federal court that it will add new charges against directors and officers of WesCorp FCU, even as its efforts to hold leaders of the corporate credit union accountable for the failure of the $34 billion corporate may be slipping away.

U.S. banks exported billions of dollars of mortgage-backed securities losses to their peers in Germany and elsewhere in Europe before the housing collapse. Now those overseas institutions may join the effort to put back some of the losses.

The Ibanez case ruled against the lender in a lender-borrower dispute over the validity of a foreclosure proceeding is not just a highly political homeowners’ protection issue. It sets a precedent expected to greatly affect the mortgage industry in the future.

HUD has issued its new mortgagee letter ML 11-02. The requirement is all Direct Endorsement lenders must update their respective quality control plans to include review of Sponsored Third Party Originators and the FHA insured loans they generate. The update shall document the methodology used to review the sponsored TPO’s, review all TPO loans that go into default during the first six months (i.e. become 60 days past due within the first six payments.) (ml 2011-2)

Now that the office parties have all concluded and the wrapping paper has hit the recycling bin, we must all turn our attention to this brave New Year. In our personal and professional lives, we will seek out that old comfortable standby, the New Year’s resolution. It would be comforting to think that recovery of the mortgage industry is simply a matter of a few timely resolutions.

Fraud definition (yesterday’s version):1.The intentional deception resulting in injury to another person.2.Something intended to deceive; deliberate trickery intended to gain an advantage.

A New York real estate attorney this week pleaded guilty to bank fraud and conspiracy to commit bank and wire fraud in connection with a scheme that defrauded residential lenders out of more than $23 million.

A New York appeals court dismissed a lawsuit against bond insurer MBIA brought by twenty of the world's largest financial institutions, including Bank of America, Citigroup, and JPMorgan Chase. The lawsuit claimed that the 2009 split of MBIA amounted to a fraudulent conveyance.

Recovery in the mortgage insurance sector will continue during 2011, as the sector eyes sustained profitability in 2012, according to an analyst at Credit Suisse.

The Federal Trade Commission’s identity theft red flags rule that required businesses to meet identity theft consumer protection laws before the Dec. 31 deadline is now in full effect. And according to FTC estimations it affects about 11 million businesses, many of which may still be unaware of the law and its impact on their business.

The New York Supreme Court ruled that MBIA Insurance Corp. did not have any way to discover if GMAC Mortgage LLC intentionally misrepresented the true nature of mortgage-backed securities that MBIA insured.

As we start 2011, the industry needs to review, change and implement Quality Control plans that can prevent mortgage fraud and reduce defaults in 2011. All origination platforms need to take the proper steps with quality control that ultimately will provide and support liquidity through all types of market cycles, thus benefitting all the mortgage industry stakeholders for years to come.

A foundation representing investors in the United States as well as three other parts of the globe said it is taking a shareholder fraud action in a Utrecht civil court related to a major acquisition by Fortis NV, a European company that had been hard hit by U.S. subprime exposures and subsequently went through a government bailout.

For the past two years, the Federal Deposit Insurance Corp. has maintained a consistent crisis-response posture — bulking up its manpower, swooping in to resolve failed institutions and standing behind their depositors.

A ruling by Massachusetts' highest court Friday repudiating a widespread securitization practice could scuttle other foreclosure cases statewide and may portend similar blows to the industry elsewhere.