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GMAC Financial Services announced that it received a $3.79 billion capital infusion from the U.S. Department of the Treasury. The transaction was structured with $2.54 billion in trust preferred securities and $1.25 of mandatorily convertible preferred securities. A $15 billion government package was announced by GMAC in May, while the company obtained $5.0 billion in capital investments under Troubled Asset Relief Program a year ago.
GMAC Gets $4 Billion More from Government
The mayor’s office in Shelby County, Tenn., announced that a lawsuit was filed against Wells Fargo. The company is accused of causing increased foreclosures through predatory lending to minorities. An activated U.S. Marine has filed a lawsuit against Wells Fargo Home Mortgage, FOX news reported. Wells allegedly violated the Soldiers and Sailors Civil Relief Act.
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2 Wells Fargo Units Face Lawsuits
A lawsuit was filed by Colorado’s attorney general against Alternative Lending of Colorado, according to a recent announcement from the state. The state claims the company’s top originator commited mortgage fraud and deceived prospective borrowers. A former employee of Mortgage Network Solutions in Pennsylvania was arrested over allegations she diverted $29,000 in appraisal payments from the company to three accounts she controlled at different banks.
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Criminal Mortgage Actions
Deutsche Bank AG filed a lawsuit against Bank of America, N.A., according to a copy of the complaint. BoA allegedly failed to secure and safeguard more than $1 billion in cash and mortgages originated by failed Taylor, Bean & Whitaker Mortgage Corp. Morgan Stanley was sued over allegations it promoted a collateralized-debt obligation while betting against the underlying loans that were originated by failed New Century Financial Corp. and Option One Mortgage Mortgage Corp. A former IndyMac Bancorp Inc. trustee has sued IndyMac’s former chief executive officer directors for allegedly squandering the failed firm’s assets and ignoring warning signals.
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Mortgage Graveyard Litigation
The National Association of Mortgage Brokers said it issued a letter to the Federal Reserve Board asking for a delay in the implementation of a final rule that would prohibit broker compensation on closed-end mortgages based on the loan’s terms or conditions. But the Center for Responsible Lending says the Fed should strengthen — not delay — its proposal. “These kickbacks are easy to hide from consumers, and they encourage brokers to aggressively market the worst kinds of loans — even when their customers qualify for better,” the center said.
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Consumer Group Takes on Broker YSPs
The National Credit Union Administration is proposing to provide more clear guidance about who credit unions can target for membership when they are seeking a new charter or expanding. The objective is to make it easy for applicants to determine whether they have a viable charter before dedicating resources to the application process. In addition, the NCUA will expend fewer resources reviewing and declining applications.
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New Rules for Credit Union Membership
November new business acquisitions fell by more than a quarter from the prior month at Fannie Mae, according to monthly operation data. The company’s book of business declined by $186 billion from October. Record residential delinquency increased another 26 basis points between September and October.
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Deterioration Deepens at Fannie
The law firm of Tramont Guerra & N
Two class actions have been filed by purchasers of pass-through certificates issued by Structured Asset Mortgage Investments II Inc. and Bear Stearns Asset-Backed Securities I LLC, according to a news release. The Securities and Exchange Commission filed a criminal action against Brookstreet Securities Corp. and its chief executive officer. The SEC claims that between 2004 and 2007, the defendants systematically sold high-risk mortgage-backed securities to investors with conservative investment goals.
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MBS Litigation Ledger
The U.S. Department of the Treasury announced that the program established under the Housing and Economic Recovery Act to purchase GSE-guaranteed mortgage-backed securities will end on Dec. 31. The Treasury also said it would amend the preferred stock purchase agreements that were established to ensure both firms maintain a positive net worth are being increased from $200 billion for each firm to whatever is “necessary to accommodate any cumulative reduction in net worth over the next three years.”
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GSE Losses Could Cost Gov Over $400 Billion