How some mortgage lenders and home builders form partnerships

Lenders have renewed interest in establishing ties with builders this spring given the latter's increased role in supplying available home inventory at a time when many existing owners are still feeling locked in by lower-than-market mortgage rates. What the spring will bring remains to be seen, but so far new-home sales have been higher as 2024 has gotten underway. Between the reduction in upward pressure on rates compared to last year and a population spike, some anticipate strong demand in the next few months. This spring will follow a year of record growth in the U.S. population, according to John Burns Real Estate and Consulting's analysis of federal data. That adds to the importance of supply.

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Bank of America escrow case met with skepticism in Supreme Court

The U.S. Supreme Court seemed skeptical of both sides in a case involving state preemption of the National Banking Act. Whether national banks need to pay interest on mortgage escrow accounts in New York — and likely elsewhere — will turn on how the Court determines what constitutes substantial interference with their activities. But the justices in their questioning seemed to be "very uncomfortable" in trying to explain what is meant by the relevant statute, the National Banking Act, said Joseph Lynyak, a partner at the law firm of Dorsey & Whitney.

New Fannie Mae process eases community lenders' buyback fears

New electronic notifications Fannie Mae is sending to lenders related to mortgage quality are alleviating some concerns community lenders have voiced about costly loan repurchase requests. The new "notice of potential defect" process Fannie rolled out recently may be helpful because it flags issues earlier, according to the Community Home Lenders of America.  Fannie said the notifications are similar to the "loan quality defect notice" discontinued in April 2022. From that point until the present, lenders whose loans had one or more "significant" defects after a post-purchase loan review were sent a resolution request, which is the formal start of the remediation timeline. 

Fairway hit with cyber attack in December

Fairway Independent Mortgage Corporation was hit with a data breach at the end of last year because of a third-party bug, a notice filed with the Attorney General of Massachusetts shows. In Massachusetts, 430 customers were impacted by the cyber attack, which exposed their Social Security numbers, bank account information, credit card account numbers and other personal identifiable information, the lender disclosed Feb. 23. It remains unclear how many customers were affected nationwide. Two law firms have issued notices urging customers impacted to reach out, opening the door for future litigation. 

CFPB files amicus brief as Ocwen appeals pay-to-pay lawsuit

The Consumer Financial Protection Bureau has filed a "friend of the court" brief in legal proceedings that may have broader ramifications for convenience fees in mortgage servicing, which some states have called on federal authorities to censure. Plaintiffs in Glover and Booze v. Ocwen Loan Servicing, a case pending in the U.S. Court of Appeals' 11th Circuit, have alleged that the company violated the Federal Debt Collection Practices Act by charging borrowers to make last-minute payments by phone or online. The amicus curiae brief sides with borrowers in the case, alleging that pay-to-pay fees are debt-related, governed by the FDCPA and violate its ban on certain charges.

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