The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

Manipulation of the London Interbank Offered Rate could have resulted in lower interest rates for subprime ARM borrowers, according to Laurie Goodman, a senior managing director at Amherst Securities Group. Interest rates on close to 80.0 percent of subprime ARMs outstanding in May were linked to LIBOR, according to data from Lender Processing Services, whose data covers about two-thirds of outstanding mortgages. As of the end of May, 70.3 percent of eligible second liens have received a modification via ... [Includes six briefs]

The reallocation of hundreds of millions of dollars of funds paid by the nation’s five largest loan servicers to states as part of this year’s whopping $25 billion national foreclosure settlement has ignited intra-state feuding as to how best utilize the cash windfall, according to a mortgage industry attorney. During a webinar sponsored last week by the State Attorneys General Enforcement Network, Jeremiah Buckley, founding partner of BuckleySandler, noted “emerging controversies” among state elected officials as they do battle, in some cases via the courts, to ensure the funds are used for consumer/mortgage-related purposes. The landmark agreement finalized in April between Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo with a coalition of state attorneys general...

The attorneys general of New York and Delaware are now free to argue on behalf of absent investors against a proposed $8.5 billion settlement involving Bank of America, securities trustee Bank of New York Mellon and a group of investors to resolve the claims of other non-participating investors in non-agency MBS issued by Countrywide. A New York state judge last week granted a motion by NY Attorney General Eric Schneiderman and DE Attorney General Beau Biden to intervene in the litigation. At issue in this complicated case is whether the trustee acted legally and appropriately in entering into the...

Alabama. The state recently enacted Senate Bill 347, which sets the procedures a borrower is to use to obtain a payoff statement for a residential mortgage, including the form of such a request and deadlines for responding to a request, as well as the method for providing the statement. Senate Bill 347 also mandates that a secured creditor has to record a mortgage satisfaction within 30 days after receipt of full payment and performance of the obligation. The bill also creates a process for enforcing the recording requirement. The bill’s provisions are effective...

Real estate transactions in New Castle County, DE, will no longer be exempt from transfer tax as a conveyance from a governmental entity, following a new ruling from the county’s legal counsel.The New Castle county law department found that Fannie and Freddie are federally chartered private corporations and not governmental agencies. The county’s revised interpretation of the realty transfer tax statute earlier this month, “consistent with the growing practice in other jurisdictions,” has prompted the county to enforce the distinction starting in June.

Industry and legal concerns that enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act made substantial changes to the federal preemption landscape are “much ado about nothing,” according to two legal scholars at the law firm Barnett Sivon & Natter PC in Washington, DC. In a scholarly work scheduled for publication in the Virginia Law and Business Review this fall, the pair addresses the view of some commentators that the Dodd-Frank Act changed the standard used to determine if a state law is preempted. Some have felt that state law is only preempted if the law...

Mortgage servicers could find themselves in a quandary as they implement the national servicing standards outlined in the March foreclosure settlement agreement, especially if they run into conflicting FHA requirements. Compliance experts say that while many of the settlement standards could be carried out within the FHA program without being at odds with existing FHA requirements, conflicts do exist with the guidelines that cannot be resolved. Even when it is technically possible to comply with both FHA guidelines and the settlement standards, it is still going to ...

Regulatory scrutiny of lender-placed insurance is increasing, but non-agency servicers claim that they are compliant with existing and impending regulations for such insurance coverage. The Consumer Financial Protection Bureau is focusing on lender-placed insurance, provisions were also included in the recent $25.0 billion servicing settlement, Fannie Mae recently updated its policies and a number of state investigations are underway. “There appear to be a number of very significant problems with ...

Ohio. The state Attorney General’s office recently finalized amendments to the state’s ability-to-repay rules that provide a safe harbor for certain types of mortgages. Under the new rules, a borrower is deemed to have an ability to repay and a reasonable probability of payment if the lender provides a fully-amortizing fixed-rate refinance mortgage that has the same or a lesser interest rate or principal amount than the current loan, and does not lengthen the payoff date. Pennsylvania. The state Department...