Banks Outsource Mortgage, Foreclosure Work to India
U.S. banks are outsourcing mortgage and foreclosure work to India to keep costs down and keep up with growing regulatory demands created since the financial crisis of 2008.
The banks are using technology firms on the sub-continent to supplement some of the needed work rather than hire more people in the United States, The Wall Street Journal reports.
But regulators worry that there is poor supervision by banks of third-party vendors. And consumer advocates fear that in the long run, it will be harder for banks to be sure that the work is done properly.
“The lack of oversight so far away may be too much for these banks to handle, considering how badly they’ve handled overseeing their own staff,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.
After 2008, the U.S. government demanded changes to every aspect of the mortgage and foreclosure process. Banks are outsourcing to meet the changing rules and demands.
The Indian companies say that their role won’t be giving final approval for mortgages or foreclosures.They will help the banks by preparing the necessary documents that the banks will have to sign off on.
German watchdogs warn U.S. on go-it-alone bank rules
(Reuters) – Germany‘s financial watchdogs on Tuesday warned against unilateral action by national regulators, as the United States considers tougher capital rules for foreign banks.
Markets regulator Bafin said it was in intense and constructive talks with its U.S. counterparts about their plans to tighten oversight of foreign lenders, including requiring them to hold bigger capital and liquidity buffers against the risk of a financial market downturn.
US Bank Sued Over Robosigning, Mismanaged RMBS Trusts
Law360, New York (May 24, 2013, 7:05 PM ET) — Banks and asset managers in Missouri, Arkansas and South Carolina have sued U.S. Bank NA for allegedly mismanaging 28 residential mortgage-backed securities trusts by ignoring robosigning practices that ultimately derailed their investments, according to a complaint removed to Missouri federal court on Friday.
Plaintiffs Commerce Bank, Cedar Hill Capital Partners LLC, Citizens Bank & Trust Co., Pinnacle Bank of South Carolina and Wells River Savings Bank claim they collectively invested in 28 residential mortgage-backed securities, for which U.S. Bank was the trustee, and suffered massive losses…
FHFA reaches deal with Citigroup in MBS suit
Federal Housing Finance Agency reached a deal with Citgroup ($51.79 1.27%) for $3.5 billion in a mortgage-backed securities lawsuit.
The FHFA claimed that the bank misled Fannie Mae and Freddie Mac into buyinng faulty mortgage bonds.
The accord marks the second so far out of 18 securities fraud cases the FHFA filed against banks in 2011 over more than $200 billion in mortgage-backed securities sold to Fannie and Freddie.
N.Y. Assembly passes ‘shadow docket’ legislation, requires lenders to file “a certificate of merit
By Daniel Wiessner
ALBANY, N.Y.(Reuters) – The New York State Assembly this week approved a bill designed to expedite residential foreclosure cases by requiring lenders to file mandatory paperwork earlier in the process.
The proposed law would create a new section, 3012-b, of the Civil Practice Law and Rules that would require lenders to file “a certificate of merit,” a sworn statement they have standing to foreclose on a home, at the start of an action, along with a summons and complaint.
The bill also would amend CPRL Rule 3408 to require lenders to attach copies of mortgage documents to the complaint, and file proof of service within 20 days.
Currently, lenders who bring residential foreclosure actions have 120 days to file a proof of service. They must simultaneously file a request for judicial intervention and the certificate of merit. Courts can then schedule a settlement conference.
Supporters of the proposal, including Chief Judge Jonathan Lippman, say it would prevent cases from winding up on the “shadow docket” of foreclosure proceedings that have stalled because lenders have not submitted certificates of merit.
And let’s not forget Wall Street’s bed buddies on Capitol Hill that are allowing Wall Street lobbyists and give their blessing to the bank lobbyists to re-write a financial bill that is supposed to govern them.
Magistrates May Euthanize Senior Judges in Foreclosure Court
The Supreme Court of Florida has decided that non-judge magistrates will be hearing foreclosure cases in addition to retired senior judges. The new Amended Rule 1.490 would expand the use of general magistrates as an alternative to the use of senior judges to assist in processing foreclosure cases. This could mercifully spell the end of senior judges in Florida, which could help restore some confidence in our judicial system.
Don’t get me wrong. I doubt the magistrates will provide any greater level due process than the microscopic levels afforded to homeowners in the bizarro world of retired senior judges overseeing Foreclosure Court. However, if a homeowner does not want his foreclosure case being decided by a non-judge, the homeowner may object, and there need be no legal basis for an objection.
The homeowner must act fast because the objection must be made 10 days after the Order of Referral to Magistrate is entered. If a timely objection is filed, then the case is referred back to a judge (or retired senior judge).