Lawsuits

Federal Savings Bank, the Chicago bank that lent millions of dollars to Paul Manafort under its founder and former longtime CEO, has now sued the former Trump campaign chairman and his wife, seeking to foreclose upon his mansion in the Hamptons.

The decision provides more clarity to noteholders in the state about when the six-year statute of limitations to bring a foreclosure action begins.

A federal judge denied the Office of the Comptroller of the Currency's motion to have the case thrown out, saying concerns about the agency's rulemaking process to reform the Community Reinvestment Act have merit.

The company also reported a large fourth-quarter loss that reflected a significant increase in its loan-loss provision.

The complaint unsealed Monday alleges three individuals and several companies they owned or controlled engaged in False Claims Act violations involving short sales of properties that had Federal Housing Administration-insured mortgages.

The CFPB issued two rulemakings in 2020 that the financial services industry and consumer advocates hoped would finally clarify key issues over how collectors contact debtors and deal with legacy debts. But both sides want the incoming Biden administration to make further changes.

The agency's rule outlines steps collectors must take to inform consumers about an outstanding debt, and prohibits companies from pursuing lawsuits after a statute of limitations has ended.

The nine arraigned individuals face 136 counts of felony charges for allegedly running an advance fee mortgage relief scheme over the last decade, totaling $6 million.

The class-action lawsuit claims the company used deceptive contracts, locking low-income Black homebuyers into disadvantageous long-term mortgages without proper lending disclosures.

A former home mortgage consultant with the company alleges she was subjected to a lower compensation structure, awards and benefits compared to her male counterparts.