Compliance

The New York Supreme Court last week ruled that MBIA Insurance Corp. did not have any way to discover if GMAC Mortgage intentionally misrepresented the true nature of MBS that MBIA insured.

Arizona Attorney General Terry Goddard filed a lawsuit against Bank of America Friday morning, alleging that the nation's largest servicer of residential loans committed "widespread consumer fraud" in its handling of loan modifications.

Fannie Mae and Freddie Mac have again delayed implementation of new mortgage and appraisal delivery requirements in the 'Uniform Mortgage Data Program', according to lender updates released Thursday.

A new insurance product designed by Bakerjian Insurance Services aims “to protect lenders against potential damage” from repurchase demands from investors that may have originally been caused by fraudsters.The Novato, Calif.-based company said it created Lenders Misrepresentation Insurance to serve as a policy that protects lenders from buyback requests that are based on “material financial misrepresentation” in the borrower’s loan file.

The more aggressive lenders are in efforts to gather and share fraud data, the more effective their risk control and prevention results will be. At least that is the expectation of some insiders.

In the well-known balcony scene in Shakespeare’s “Romeo and Juliet,” a love-struck Juliet asks, “What’s in a name? That which we call a rose by any other name would smell as sweet.”While that might be true for teenagers and roses, names are a first step for bankers to establish a critical component in lending decisions: the identity of the person seeking a loan.

The former president of a now-defunct title agency faces 30 years in federal prison after pleading guilty to one count each of wire fraud and insurance fraud.

Bank of America Corp. has begun potential settlement discussions with large institutional investors who bought MBS that later underperformed, causing losses at these entities, according to a report in The Wall Street Journal.

A new insurance product has been designed by Bakerjian Insurance Services “to protect lenders against potential damage” from repurchase demands from investors that may have originally been caused by fraudsters.

The robo-signing fiasco has energized overall fraud prevention and management efforts prompting financial service providers to focus on short sales and foreclosure fraud.Compared to fraud, robo-signing mistakes that derive from carelessness and loan processing inefficiency are easier to detect and prevent. Insiders agree that fraudsters who often collaborate with employees of a mortgage firm tend to challenge both lenders and their borrowers with new scams that are becoming increasingly more complicated.

Recent interest movement in Treasuries has narrowed their yield spread with real estate investment trusts, making some companies in the sector of publicly traded property and mortgage investment firms less attractive buys, according to Credit Suisse.

As they get ready to deal with the challenges of the New Year credit counselors, lenders and servicers are reshuffling their fraud prevention efforts and joining resources.The Consumer Federation of America is combating fraud one scam at a time by bringing together communities at the state and local level.

The number of mortgages with negative equity fell nearly 2% in the third quarter from the previous quarter mostly due to foreclosures, according to a CoreLogic report issued Monday morning.

On Dec. 3, KATHY PUCKET OF RICHMOND, IND., was sentenced to 51 months upon her guilty plea to mail fraud and obstructing justice. This followed an investigation by the Richmond Police Department, Indiana Secretary of State Todd Rokita's Prosecution Assistance Unit, and the Federal Bureau of Investigation, Muncie Office. (Notice the cooperation of multiple agencies)

A new business process management software creates rules and checklists for servicers to ensure the cases they take to foreclosure meet compliance guidelines—technology that developer Pegasystems says protects servicers and lien holders from faulty foreclosure processes and speeds up the time it takes a property to transfer to real estate owned status.

Real estate construction and development oversight appears to be one of the areas where demand for a highly specialized, preventive approach to regulatory compliance and fraud management is picking up.

Securities fraud class action cases tend to be rare courtroom trial experiences that have some "red flag" warnings for those who may not be on trial yet. It is even more so during a crisis.

The economic recovery should accelerate gradually throughout 2011, with the second half of the year exhibiting more growth and job creation than the early part, according to Freddie Mac chief economist Frank Nothaft.

Until recently, much of the attention surrounding so-called "put-back risk" has focused on the legal aspect, notably whether judges will require lenders to repurchase loans they sold to securitizers.

Allied Home Mortgage Capital Corp has agreed to pay $38,000 fine for violations of branch office rules that require the corporation to pay all expenses of all branch offices. (See Mortgagee Approval Handbook 4050.1 Rev-2 ¶¶ 2-8, 2-14.B.). AHMCC also agreed to refund “improper fees” to two borrowers and “buy down the principal of one loan that was over-insured,” HUD said.