A favorable court ruling on the statute of limitations for filing claims under the False Claims Act gave Quicken Loans its first win in a closely watched government case involving allegedly fraudulent FHA loans. Judge Mark Goldsmith of the U.S. District Court for the Eastern District of Michigan dismissed portions of the Department of Justice’s lawsuit against Quicken in a March 9 decision, narrowing the lender’s potential liability for FHA losses. The losses were blamed on sloppy underwriting, fraudulent certification and loan performance. The DOJ said the FHA would not have knowingly insured the loans had it known they were defective. The DOJ and the Department of Housing and Urban Development’s inspector general began an investigation of Quicken’s FHA lending activities in April 2012. The investigation encompassed some 246,000 FHA loans, which Quicken originated from ...

A Georgia appellate court recently handed Wells Fargo Bank a provisional win in a lawsuit in which a VA borrower alleged breach of contract and wrongful foreclosure. In Wells Fargo Bank, N.A., d/b/a Wells Fargo Home Mortgage v. LaTouche, the court ruled that Wells did not breach its duty to the borrower to comply with VA foreclosure regulations. The court concluded that the trial court had erred in denying Wells Fargo’s motion for summary judgment as to the defendant’s claims for wrongful foreclosure that hinged upon the same VA regulations. The reversal stemmed from Wells Fargo’s request for an interlocutory review of the trial court’s denial of its motion for summary judgment on defendant Michael LaTouche’s claims for breach of contract, wrongful foreclosure and “surprise. An interlocutory review is undertaken when a question of law must be answered by an appellate court before ...

The government has until April 17 to prove that the 11,000 documents it is withholding are correctly labeled as “privileged.” This week, a ruling by Federal Claims Court Judge Margaret Sweeney ordered the government to review the documents and release those that are non-privileged to the plaintiff’s attorneys in Fairholme Funds Inc. et al., v. The United States. The order came on the heels of a January appeals court ruling that found the bulk of a batch of 56 documents the government refused to turn over to the plaintiff’s attorneys, after being ordered to do so last year, did not merit privilege treatment. They included various memos, emails and presentations from the Treasury, Federal Housing...

The spike in FHA delinquencies in the fourth quarter of 2016 justifies the Trump administration’s decision last month to suspend and review the outgoing administration’s lowering of FHA mortgage insurance premiums, said House Financial Services Committee Chairman Jeb Hensarling, R-TX. Commenting on the Mortgage Bankers Association’s quarterly delinquency rate survey, Hensarling praised President Trump’s decision to set aside the 25-basis-point premium reduction, which Inside FHA/VA Lending reported first on Jan. 6, 2017. “Lowering premiums at this time was a big mistake,” said Hensarling. “The sudden increase in delinquencies makes it clear that President Trump was absolutely right to undo the previous administration’s irresponsible action.” Hensarling recalled that in 2013 “taxpayers had to spend $1.7 billion to bail out the FHA.” Going forward, the FHA must be fiscally sound, with a ...

Mortgage borrowers still have plenty to complain to the CFPB about, especially on the mortgage servicing front, the latest monthly consumer complaint report from the bureau suggests. “The most common issues identified by consumers are problems when they are unable to pay (loan modification, collection, foreclosure),” which were cited by 49 percent, according to the CFPB, followed by issues making payments (loan servicing, payments, escrow accounts), identified by 33 percent. Other homeowners brought up problems having to do with applying for a loan (application, originator, mortgage broker), which was noted by 9 percent, followed by signing the agreement (settlement process and costs), which was highlighted by 5 percent, and receiving a credit offer (credit decision, underwriting [With Two Data Charts]....

House Financial Services Committee Chairman Jeb Hensarling, R-TX, is looking to retain the CFPB, restructure key parts of the agency, and drastically limit its authority, Inside the CFPB has learned.According to a draft memorandum of the major changes to Hensarling’s Financial CHOICE Act, now dubbed CHOICE Act 2.0, the bureau “is to be retained and restructured as a civil law enforcement agency similar to the Federal Trade Commission, with additional restrictions on its authority,” as follows: Sole director, removable by the president at will. Rule-making authority limited to enumerated statutes. Unfair, deceptive acts or practices authority repealed in full. Supervision repealed. Consumer complaint database repealed.•Market monitoring authority repealed. Enforcement powers limited to cease-and-desist and civil investigative demand/subpoena powers....

Fannie Mae’s new regional headquarters under construction in the Dallas metro area is the target of criticism from Sen. Chuck Grassley, R-IA.He questions the Federal Housing Finance Agency’s management of the project in which the GSE is combining three locations into the one leased building. This comes on the heels of the FHFA Office of the Inspector General issuing a management alert late last year raising concerns about the cost of the consolidation and relocation of Fannie’s high-rise offices in Plano, TX. Grassley wants answers as to how the agency plans to address the issues identified in the IG management alert.

A federal court ruled that GSE shareholders can no longer sue Fannie Mae’s accounting firm, Deloitte & Touche, and that the Federal Housing Finance Agency will take over as plaintiff in the Edwards et al v. Deloitte & Touche case. The ruling, handed down last week in the U.S. District Court of Florida, distanced shareholders from the case, and said any claims against Deloitte are the sole responsibility of ...

Empirical evidence of the mortgage market’s recovery is still piling up, with the latest quarterly consumer complaint data from the CFPB showing that gripes about home loans fell in most categories tracked, both on a quarterly basis and year over year, according to a new analysis and ranking by Inside the CFPB. Consumer criticisms in the fourth quarter fell a solid 15.0 percent from the period ending Sept. 30, 2016. Finger pointing by borrowers fell on a YOY basis as well, but by a smaller 4.5 percent, the data show.With fewer and fewer borrowers underwater or in foreclosure these days, it should be no surprise that complaints about loan modification are down the most [With three exclusive data charts] ...

The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...