On December 6, 2018, the Bureau of Consumer Financial Protection (“CFPB”) announced that two days earlier it had filed a complaint and stipulated final judgment and order against a Nevada-based non-bank mortgage company in the U.S. District Court for the District of Nevada. The mortgage company allegedly violated the Consumer…
On October 24, 2018, the Illinois Attorney General (Illinois AG) announced that it had entered into a settlement agreement with a mortgage company resolving an investigation by the Illinois AG’s Office and the Illinois Department of Financial and Professional Regulation (IDFPR) into allegations of mortgage fraud at one of the company’s branches. According to…
On October 19, the Department of Justice (DOJ) announced that it settled allegations that a Florida-based mortgage lender violated the False Claims Act (FCA) by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage insurance requirements for certain loans originated between 2006 and 2011 for $13.2 million. In the lawsuit, which…
On September 27, 2018, the Department of Justice (“DOJ”) announced that it had reached a settlement with a Washington-based foreclosure services company, resolving allegations that the company violated the Servicemembers Civil Relief Act, 50 U.S.C. §§ 3901-4043 (“SCRA”) when foreclosing on certain servicemembers’ home. The SCRA protects servicemembers on active duty from having their…
On August 28, 2018, the Ninth Circuit affirmed Judge Yvonne Gonzalez Rogers’ decisions in two putative class actions challenging Citibank’s and J.P. Morgan Chase’s default servicing practices. In Stitt v. Citibank, N.A. and Ellis v. J.P. Morgan Chase & Co., the Ninth Circuit concluded that Judge Rogers had correctly dismissed…
On August 10, 2018, the Board of Governors of the Federal Reserve (“Board of Governors”) announced that a national bank had consented to the assessment of a civil money penalty totaling $8.6 million pursuant to the Federal Deposit Insurance Act, as amended, 12 U.S.C. §§ 1818(b)(3) and 1818(i)(2)(B), for engaging in…
On July 26, 2018, the Attorney General for the Commonwealth of Pennsylvania announced a lawsuit against five Pennsylvania mortgage foreclosure companies and two company owners for cheating consumers into signing contracts to have their mortgage loans modified—but never delivering the services paid for—in violation of Pennsylvania’s Unfair Trade Practices and Consumer…
On June 7, 2018, the Federal Trade Commission (FTC) announced a settlement and stipulated order for permanent injunction arising from a lawsuit brought by the FTC concerning allegedly illegal mortgage relief practices. The FTC initiated an action against several defendants in January 2018 alleging violations of Section 5 of the Federal Trade Commission Act, 15…
On May 8, the Federal Trade Commission (“FTC”) announced that the U.S. District Court for the Central District of California granted its request to preliminarily enjoin affiliated California-based debt relief companies from continuing operations, and to freeze their assets. In its complaint, the FTC alleged that the companies violated Section 5(a) of the Federal Trade Commission Act,…
On May 8, the Department of Justice (“DOJ”) announced that it had reached a voluntary settlement with a family-owned Minnesota bank, resolving allegations that the bank had violated the Fair Housing Act, 42 U.S.C. §§ 3601 et seq. (“FHA”) and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. (“ECOA”) by…
On April 20, 2018, the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) each announced settlements totaling $1 billion with a national bank resulting from a coordinated action between the two agencies. The OCC found that deficiencies in the bank’s enterprise-wide compliance risk management program…
On January 31, 2018, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit), sitting en banc, issued its long-awaited decision in PHH Corp. v. CFPB, holding that the provision of the Dodd-Frank Act shielding the single director of the CFPB from removal without cause is constitutional. In all,…
On January 25, 2018, a Florida-based homebuilder filed its Form 10-K annual report with the Securities and Exchange Commission (SEC), disclosing that its “mortgage subsidiary has been subpoenaed by the United States Department of Justice (DOJ) regarding the adequacy of certain underwriting and quality control processes related to Federal Housing Administration (FHA)…
On January 12, 2018, the Federal Reserve Board (FRB) announced the assessment of civil money penalties and consent orders against five national banking organizations over mortgage servicing deficiencies, resulting in a total monetary settlement of $35.1 million. In 2011 and 2012, the FRB initiated enforcement actions against ten firms, including the five against…
On November 28, the Federal Reserve announced that it had entered into a consent order with a Kansas state bank, resolving allegations that the bank engaged in deceptive residential mortgage lending practices in violation of Section 5 the Federal Trade Commission Act. According to the consent order, the bank’s loan officers often gave borrowers…
On October 12, 2017, the OCC published the section of its policy and procedures manual, PPM 5000-43, entitled “Impact of Evidence of Discrimination or Other Illegal Credit Practices on Community Reinvestment Act Ratings.” The Policy’s purpose is to provide guidance to OCC examiners in determining whether (and by how much)…
On September 20, the Federal Trade Commission (FTC) announced that the U.S. District Court for the Central District of California entered summary judgment against two law firms and two individuals for their participation in an allegedly fraudulent mortgage relief scheme. According to the FTC, the law firms misrepresented to consumers that they could obtain monetary recoveries…
On September 14, 2017, the U.S. District Court for the Southern District of Texas issued an opinion and order against two former mortgage companies and their former president and CEO. The order, which followed a previous jury verdict against the company, awarded the Government nearly $280 million in treble damages under the False Claims Act (FCA), approximately $13 million…
On August 21, 2017, the Office of the Comptroller of the Currency (OCC) issued Bulletin 2017-28, providing risk management guidance to lenders offering residential mortgage loans with loan-to-value (LTV) ratios that exceed 100 percent at origination (“high-LTV loans”) in connection with community redevelopment programs. Since the onset of the financial crisis,…
On August 8, 2017, the Department of Justice (DOJ) announced that a national lender agreed to settle allegations that it violated the False Claims Act. The settlement resolves allegations that the lender originated and underwrote mortgage loans insured by the United States Department of Housing and Urban Development’s (HUD) Federal Housing Administration…