Law and legal issues

Stearns Holdings and certain subsidiaries have filed for Chapter 11 bankruptcy as part of a restructuring agreement that could reduce debt, increase Blackstone's stake in the company and preserve jobs.

A developer behind projects in the Maine cities of Portland and Saco was sued by a business partner as properties there are scheduled to be sold at foreclosure auctions.

Live Well Financial's creditors are seeking a court-supervised bankruptcy, but the mortgage lender is opposing the move, saying it can get more for certain assets if it sells them before filing.

Ditech Holding Corp. has entered into purchase agreements with New Residential Investment Corp. and Mortgage Assets Management, in which each would acquire certain assets in the company's Chapter 11 bankruptcy.

BSI Financial agreed to pay a $200,000 fine along with restitution to settle allegations from the Consumer Financial Protection Bureau that it mishandled mortgage servicing rights transfers for loans in the loss-mitigation process.

Ocwen Financial, Fidelity Information Services and Fidelity's corporate parent have agreed to settle a lawsuit over regulatory audit expenses Fidelity submitted to Ocwen for reimbursement.

Director Kathy Kraninger said the agency will emphasize a confidential supervisory process instead of just doling out public enforcement actions. But skeptics worry this will let companies escape punishment.

General Electric placed its WMC Mortgage unit into Chapter 11 bankruptcy protection as it has nearly $1.7 billion in legal settlements agreed to or pending.

Homeowners in Chicago cheated by a mortgage fraud scheme are seeking to form a committee to protect their interests in the bankruptcy of Ditech Holding Corp., the company that owns their loans.

The civil rights activist Jesse Jackson is pushing a proposal that the billions banks have paid in fines be given to Americans who lost homes or suffered in other ways during the financial crisis.