| Mortgage Industry Focuses on Lawsuits, Online Wholesale Lending
Weekly mortgage industry wrap from MortgageDaily.com
DALLAS, TX (October 3, 2005) — During the past week, mortgage bankers and mortgage brokers focused on a report from TowerGroup that indicated growth in online lending has been dominated by wholesale lenders, according to traffic data from MortgageDaily.com, the dominant online news source for the mortgage industry. The story was accessed more than any others last week.
As always, the real estate finance industry showed strong interest in the growing phenomenon of mortgage fraud. The latest case, out of Massachusetts, involved ten men, including several mortgage brokers and cost lenders more than $16 million.
Among two legal actions reported was a settlement by Bank of America with loan officers that had filed a class action. The plaintiffs accused the company of wrongly denying mortgage retail lending employees financial compensation for overtime.
The second involved an Illinois Supreme Court ruling in favor of a bank and federal preemption. The court found that a state law about maximum mortgage rates was preempted by a prohibition of such caps in the federal Depository Institutions Deregulation and Monetary Control Act.
The U.S. Department of Housing and Urban Development eliminated two appraisal forms and cut out pre-endorsements for Federal Housing Administration loans. HUDÂ hopes to make FHA loans easier for lenders to use.
New Century Financial Corp. it lowered its dividend guidance for the second time in 60 days, citing margin compression. The nonprime lender, like many others in the sector, is reporting massive gains in production — but apparently at the expense of earnings.
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