Archive: 5 June 2014

1
Commonwealth of Massachusetts v. FHFA: Fremont Meets The Federal Government
2
K&L Gates Webinar: Mortgage Loan Servicers and Affiliated Service Providers – What are the Rules?

Commonwealth of Massachusetts v. FHFA: Fremont Meets The Federal Government

By: Irene C. Freidel

On June 2, 2014, the Commonwealth of Massachusetts sued the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac in state court, under Massachusetts’ consumer protection statute (“Chapter 93A”) to force them to sell foreclosed properties to non-profit organizations at fair market value, so that the properties can then be re-sold or leased back to the former homeowner. See Commonwealth of Massachusetts v. Federal Housing Finance Agency, et al., C.A. No. 14-1763 (June 2, 2014). Among other things, the lawsuit seeks a declaration that the GSEs’ current anti-fraud guidelines violate Massachusetts foreclosure law (M.G.L. c. 244, § 35C(h)), an order requiring property sales to non-profits in specific transactions, an injunction to prevent the GSEs from refusing to adhere to Massachusetts law, and an award of penalties of up to $5,000 for each transaction that the court determines constituted an unfair and deceptive practice under state law. The lawsuit follows a series of communications between the Massachusetts Attorney General and FHFA beginning in 2012 in which the state has demanded that FHFA direct the GSEs to change their anti-fraud “arms-length” requirements that apply to short sales and REO transactions. Read More

K&L Gates Webinar: Mortgage Loan Servicers and Affiliated Service Providers – What are the Rules?

By: Holly Spencer Bunting, Kristie D. Kully,  Kerri M. Smith, Nanci L. Weissgold

No one said it was going to be easy to be a servicer of residential mortgage loans.

The current scrutiny of servicing practices is at a fever pitch. Recently, one focus of federal and state officials has been on enforcing the broad array of laws, regulations, and other requirements applicable to a servicer’s engagement of affiliated service providers. In particular, regulators are increasingly interested in the reliance by servicers upon affiliated service providers, and the perception that the servicer may have conflicts of interest or is self-dealing. In fact, regulators such as New York State Department of Financial Services Superintendent Benjamin Lawsky are becoming significant obstacles to the transfer of mortgage servicing rights in certain cases, probing into compliance failures in past servicing practices and potential conflicts of interest with affiliated service providers. Read More

Copyright © 2019, K&L Gates LLP. All Rights Reserved.