government affairs blog

Yesterday [June 28, 2011] at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien revealed the results of an independent audit of his registry.  The audit, which is released as a legal affidavit was performed by McDonnell Property Analytics, examined assignments of mortgage recorded in the Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010.  In total, 565 assignments related to 473 unique mortgages were analyzed.

McDonnell’s Report includes the following key findings:

• Only 16% of assignments of mortgage are valid
• 75% of assignments of mortgage are invalid.
• 9% of assignments of mortgage are questionable
• 27% of the invalid assignments are fraudulent, 35% are ”robo-signed” and 10% violate the Massachusetts Mortgage Fraud    Statute.
• The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473(60%)
• There are 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees
• per 1,000 mortgages whose current ownership can be traced.

Mortgage fraud reports grew 31% in quarter one as lenders probed deeper into their pools of distressed assets looking for signs of fraud and theft.

The Financial Crimes Enforcement Network, which is part of the Treasury Department, released its first-quarter Mortgage Loan Fraud report Tuesday, which shows suspicious mortgage activity reports growing to 25,485 complaints in first quarter, up from 19,420 last year.

more from Housing Wire

The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else.

Fannie Mae, the government-sponsored enterprise which issues almost half of all mortgage-backed securities, determined over the next two years that more than 200 loans acquired from Taylor Bean were bogus, non-performing or lacked critical components such as mortgage insurance.

more from Bloomberg News

OCC issued Supervisory Guidance 2011-29, clarifying the standards expected of national banks and their servicing companies.   Among other standards announced, the Guidance provides:

Here is an interesting case from the Federal Court in the Eastern District of Michigan defines the interaction between a Closing Protection Letter and claims under the title policy, basically holding that they are wholly independent obligations, which may be pursued separately.  

Home prices slowed their pace of decline in April, feeding hope that housing is near a bottom. But tens of thousands of foreclosures and faltering consumer confidence are expected to leave markets bumping near their current level for the rest of the year.

Bank of America Corp. reached an agreement to pay $8.5 billion to settle claims by investors who lost money on mortgage-backed securities purchased before the U.S. housing collapse, the bank confirmed Wednesday morning.

The Consumer Financial Protection Bureau is asking the mortgage finance industry to comment on a second set of prototype mortgage disclosure forms.

The forms are part of the CFPB's plan to design and reveal sample mortgages, with the aim of rolling the forms into the marketplace to simplify home loan documents for homebuyers.

To offer comments directly to CFPB and to review the forms, 

click Here

The click "Switch to Industry Tool" choice (to the right of the Green "Consumer Tool" button

It will present both forms and you can provide your comments and feedback directly to the CFPB.

Please review these forms and offer your comments and suggestions

South Florida's mortgage fraud risk index spiked 10 percent during the first part of the year, shooting the region to second place nationally for potential housing scams.

More from the Palm Beach Post

This morning Governor Scott signed HB 1007 into law.   This bill includes the provisions which we expect will avoid the need to terminate the outstanding title insurance policies issued by a failed insurer.   Instead it creates a mechanism by which the those policies will be assumed by another underwriter and paid for, over time, with a per policy consumer assessment.