Homeowners with mortgages serviced by Residential Capital LLC want to form an official committee in the company’s bankruptcy case, which would give them a louder voice in the company’s complicated Chapter 11 proceedings.
In a Friday filing with U.S. Bankruptcy Court in Manhattan, a lawyer for the group of homeowners said they’re concerned that state and federal settlements this year with mortgage servicers including ResCap’s government-owned parent Ally Financial might not be enforced properly now that ResCap is in bankruptcy. A ResCap spokeswoman declined to comment.
Read more: http://www.foxbusiness.com/news/2012/08/27/homeowners-want-their-own-committee-in-rescap-bankruptcy/#ixzz24rT6dSz7
The Securities and Exchange Commission disclosed in a court filing that it was investigating Residential Capital for possible mortgage origination and securities fraud, according to Reuters.
Investigators began the probe in February into possible omissions or misrepresentations in the mortgage bonds the now bankrupt unit sold to investors. The agency requested forcing due diligence firm R.R. Donnelly & Sons to hand over documents it prepared for the investment banks in the deals.
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Courthouse News Service.
WASHINGTON (CN) – The Bureau of Consumer Financial Protection plans to make creditors provide free copies of written appraisals and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling.
The proposal also would require creditors to notify applicants in writing of the right to receive a copy of each written appraisal or valuation at no additional cost.
The BCFP’s new rule amends Regulation B, which implements the Equal Credit Opportunity Act, and the official interpretation to the regulation, which interprets the requirements of Regulation B.
The proposed revisions to Regulation B would implement an ECOA amendment on appraisals enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Generally, most public comments are due by Oct. 15.
The Wall Street Journal reported Monday that institutional investors, hedge funds and cities are among the plaintiffs filing suits in the growing scandal involving fixing of the London Inter-Bank Offered Rate, or Libor.
Trillions of dollars’ worth of financial products are tied to Libor. Investors or banks may have been cheated out of returns when bankers colluded in recent years to keep rates artificially low.
In June, British banking giant Barclays settled criminal and regulatory investigations by agreeing to pay $450 million to U.S. and British authorities. A number of other major banks are reportedly under investigation in the rate-fixing probes.
As investors and institutions and their attorneys investigate whether they lost money in the Libor scandal, the winners in the scandal may not realize they benefited from the rate-fixing.
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(Reuters) – Citigroup Inc has agreed to pay nearly $25 million to settle a lawsuit by investors who said they were misled about the quality of mortgage-backed securities they bought just before the U.S. housing market crashed, according to court papers filed Monday in federal court.
The 2008 lawsuit accused Citigroup of lying about lenders’ deteriorating mortgage underwriting and appraisal standards during the subprime mortgage boom, and understating the risk of default. As the underlying mortgages began to default, the value of the investments plummeted, the lawsuit alleged.
The Ann Arbor Employees’ Retirement System and Greater Kansas City Laborers Pension Fund had led the lawsuit on behalf of investors who purchased certificates in one of two mortgage-backed securities trusts from Citigroup Mortgage Loan Trust Inc in 2007.
California Gov. Jerry Brown signed a bill Monday forcing owners of foreclosed and vacant homes to maintain the property or face up to a $1,000 fine per day of violation.
The bill, A.B. 2314, is part of the Homeowner Bill of Rights, a slew of new legislation drafted and introduced through state lawmakers with the assistance of California Attorney General Kamala Harris.
The latest enacted bill gives local governments the ability to impose up to a $1,000 fine for code violations. It must give owners, including banks, at least 14 days to start fixing the alleged violation and 30 days to complete the correction before issuing the fine.
One of the violations includes “not failing to take action to prevent mosquito larvae from growing in standing water or other conditions that create a public nuisance.” A woman in Studio City, Calif. recently diagnosed with the West Nile virus traced the contraction to mosquitoes breeding in a nearby foreclosure’s neglected swimming pool.
The new bill could be costly for careless owners of these homes. Fannie Mae, for example, owned more than 10,000 REO properties in California as of June 30, according to its latest financial filing.
If an investor or homeowner buys a property that was foreclosed on at any point since Jan. 1, 2008, the local government must give at least 60 days to remedy any violations found since taking title. The law does give room to provide less time “if deemed necessary.”