|FDIC Pursuing Brokers for Mortgage Fraud Losses
The head of the Federal Deposit Insurance Corporation blamed mortgage brokers and the lax lenders that funded their loans for much of the current housing crisis. She warned that her agency is pursuing thousands of mortgage fraud cases against mortgage brokers and other parties involved.
Borrowers are looking to government regulators and law enforcement to protect their money, FDIC Chairman Sheila Bair told the National Association of Attorneys General today in Washington, D.C., according to a transcript of her prepared speech.
Bair said lax enforcement of mortgage lenders was a significant factor in the credit crisis.
The comments were made by the New York-based company's chairman, president and chief executive officer Jamie Dimon at a conference hosted by the U.S. Chamber of Commerce yesterday in Washington, D.C.
"My biggest mistake, probably of my whole career, was not closing down our mortgage broker business sooner," Dimon was quoted as saying by Bloomberg news.
$1 Billion Lawsuit Against Mortgage Executives
A $1 billion lawsuit filed last week accuses former executives of a failed Alt-A wholesale lender of overpaying themselves hundreds-of-millions of dollars as the company was drowning. Just two weeks before a bankruptcy filing by the firm -- which employed more than 5,000 people -- executives took the corporate jet to a Hawaiian resort.
The lawsuit was filed by Larry Lattig against 40 defendants in connection with the spectacular failure of First Magnus Financial Corp. in August 2007, an announcement last week said.
Brokers Sue Over HVCC
Mortgage brokers claim that the new appraisal code places them at a severe disadvantage with their mortgage banking brethren and have filed a lawsuit to protect their interests. The lawsuit is the second filed by brokers in the last three months against a government entity over compliance issues that are crippling their ability to compete.
The lawsuit was filed by the National Association of Mortgage Brokers in U.S. District Court for the District of Columbia against Federal Housing Finance Agency Director James B. Lockhart, an announcement Monday from the trade group said.
Friday Bloody Friday
Banking regulators seized five financial institutions on Friday, while one wholesaler has reportedly stopped serving mortgage brokers. The frenetic pace of failures this so far this year suggests 2009 might see mortgage-related casualties rise to the highest level in at least a decade.
First to go Friday was FirstCity Bank in Stockbridge, Ga., which was closed by the Georgia Department of Banking and Finance. An order issued by the Superior Court of Henry County appointed the Federal Deposit Insurance Corporation as receiver.
Lender Dumps Brokers, Goes Retail
An Arizona-based lender has closed its wholesale channel. But a new focus on retail business has the firm recruiting new loan originators and building its branch network.
|Details of Massive Modification Plan Emerge
The Obama administration today released more details on its $75 billion loan modification program.
High LTV Streamlined Refis Without M.I.
A second piece of the Obama administration's mortgage rescue plan involves refinancing borrowers with high loan-to-values and as-agreed payment histories. The program enables streamlined underwriting and the ability to skip mortgage insurance and appraisals on some loans.The Home Affordable Refinance program is part of the Homeowner Affordability and Stability Plan originally unveiled by the U.S. Department of the Treasury last month. It impacts loans owned or guaranteed by either Freddie Mac or Fannie Mae.
Jumbo Lender Emerges
The Federal Deposit Insurance Corporation has closed on the sale of IndyMac Federal Bank FSB at a huge loss. The new company will initially focus on jumbo mortgage originations.
A new government report indicates that two institutions are neck-and-neck in the race for the titles of biggest residential originator and biggest commercial originator.
Mortgage Industry News
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