Compliance

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.

Fraud risk control is commonly recognized as an effective way to avoid loan buybacks.Avivah Litan, vice president and analyst at Gartner research firm, says lenders who want to remain competitive in fraud management are also aware that they “cannot continue doing business as usual.”

In an era of low interest rates, weak loan demand and unprecedented efforts by the Federal Reserve Board to pump liquidity into the economy, the demand for Federal Home Loan Bank advances has plummeted to a 10-year low, raising questions about the system's future as the government weighs a redesign of the housing finance sector.

LEHMAN BROS., which failed in 2008 while holding bad real estate loans, on Nov. 15, filed suit against NATIONFIRST LENDING INC., an Irvine mortgage company for allegedly misrepresenting the strength of loans it sold to the Wall Street firm. The lawsuit, filed in federal court in Los Angeles, alleges that Nationsfirst Lending Inc. misrepresented the identities of borrowers, the value and condition of property securing the loans and the validity of loan documents. NATIONSFIRST is listed as a suspended corporation on the California Secretary of State website.

New federal regulation is attempting to make it as difficult as possible for fraudsters to deceive homeowners. The Federal Trade Commission has issued a new rule designed to ban the collection of fees by mortgage loan modification and other foreclosure rescue service providers until homeowners receive a written offer “that they decide is acceptable” from their lender or servicer.

The Oregon attorney general has filed a lawsuit accusing American Team Mortgage, Mission Viejo, for repeatedly violating the state's Unfair Trade Practices Act and Mortgage Rescue Fraud Protection Act.

The National Credit Union Administration is exploring legal remedies against firms that sold faulty mortgage backed securities that later played a key role in the failure of a handful of corporate CUs.

ILLINOIS BONDING REQUIREMENTS increase effective Dec. 31. The rate is $25,000 to $150,000 depending on the total loan officer volume. (I hope you have a lot of volume)Surety Bond Volume Requirements:

Refinancing fraud is on the rise.An updated CoreLogic 2010 Mortgage Fraud Trends Report finds that while overall mortgage fraud has increased by 20% compared to its lowest level in 2009, refinance fraud increased by 30%.

The wave of short sales expected to enter the market due to newly intensified government and industry efforts to avoid foreclosures is increasing the odds for short sale fraud risk.

As you think of the suspense-filled spy movies in which the hero must defuse a bomb to save the city, you can hear the familiar “tick, tick, tick” of the bomb’s time clock. With ninja-like precision the hero cuts the yellow wire, or maybe the red wire, just in time to stop the clock, neutralize the bomb, and save the day.