Compliance

Even if you have not experienced this for yourself, nearly everyone has heard horror stories from a blind date. They have become a cultural archetype in every way. You go in expecting young, athletic, charming and too often, find yourself grappling with the liberal application of those words. Growing up in the mortgage industry over the last 20 years, I can attest that a few parallels exist here. What you thought was a great deal for the bank, that solid customer with the high FICO score, great employment, and low debt ratios turns out to be a house of cards built on shifting sands, and the "perfect match" ends in default and risk.

THE NUMBER OF NEWLY DELINQUENT HOME LOANS HAS RISEN FOR TWO STRAIGHT QUARTERS in what could foreshadow another surge in unemployment-related foreclosures.

Everyone knows that short sales have gone through the roof, tripling over the last couple of years and providing more grist to the unlikely alliances of lenders and Realtors that have sprung up to handle them.

To elaborate further on recent HUD withdrawals of mortgagee approvals: Approval of a mortgagee by HUD/FHA to participate in FHA mortgage insurance programs includes an Origination Approval Agreement between HUD and the mortgagee. Under the Agreement the mortgagee is authorized to originate single-family mortgage loans and submit them to FHA for insurance endorsement.

Mortgage fraud is not going away any time soon. The FBI has been working with bureaus of investigation in states that recently passed residential mortgage fraud acts to stay abreast of the latest fraud tactics.

Lender Processing Services Inc. has formed a strategic partners group to establish a network of default-related service providers.

According to North Carolina attorney general Roy Cooper, a mortgage lender will pay $4.5 million for its role in a scheme to sign consumers to loans they couldn't afford on overpriced modular and manufactured homes.

The Department of Housing and Urban Development is charging a Chicago couple, their real estate agent and a real estate broker with refusing to sell a home listed for $1.8 million to a couple because of their race, in violation of the Fair Housing Act.

SMART Servicing, LLC, an affiliate of Steel Mountain Capital Management, is offering new software that provides the residential mortgage loan market with loan level information designed to help users control loss severity.

Bank of America said it completed nearly 4,100 permanent HAMP modifications in July, bringing the total number of B of A customers that have received modifications under the government program to 76,300.

On Aug. 9, 2010 in San Francisco, Wells Fargo & Co. agreed to pay $20 million to settle a nationwide lawsuit brought by mortgage consultants who alleged they were misclassified as exempt by the bank so they would not have to be paid overtime.

In a surprise move, the Federal Reserve Board has issued a final rule that imposes restrictions on loan officer and mortgage broker compensation that is very similar to compensation language in the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act.

Tustin, Calif.-based Veri-tax LLC, which provides tax verification and fraud management solutions, has been acquired by private investment firm Blue Horizon Capital for an undisclosed sum. The acquisition will provide additional capital and resources to support Veri-tax's growth initiatives.

For lenders who are concerned about "subpar" appraisal quality, it's important to have a technology platform in place to manage multiple AMCs and compare the work of different outsource vendors in order to determine which ones are the best to use.

Now that the industry has moved to a full-doc environment, application misrepresentation is happening on the back end of the business where "it's like doing new origination" and there is the most room for potential fraud in documentation.

Nearly 1,200 depositories have been hit with an enforcement action made public by federal regulators since the start of 2008, and that number is expected to climb at an accelerated rate.

Flim-flammers who promise to help troubled borrowers obtain loan modifications are going to extraordinary lengths to snare their next marks, even so far as hanging out in restrooms.

Michael McGrath, the one-time CEO of U.S. Mortgage/CU National Mortgage, convicted of stealing almost $140 million of credit union funds, will remain free on bail with his sentencing postponed again until Nov. 15.

Ralondria Stafford, 36, and Necole Ward, 31, both formerly of Vallejo, Calif., pleaded guilty before U.S. District Judge Morrison C. England Jr., to bank fraud.

Two Prior Lake, Minn., men have pleaded guilty in Federal Court in Minneapolis for their roles in a scheme that allegedly defrauded mortgage lenders out of more than $2.5 million by causing them to make loans based on false information.