OCC Reports Decline in Mortgage Performance


On December 16, the Office of the Comptroller of the Currency (OCC) reported that the performance of first-lien mortgages in the federal banking system declined during the third quarter of 2020, which accounts for 27% of all residential mortgage debt outstanding in the United States. The percentage of seriously delinquent mortgages was 5.8% in the third quarter of 2020, compared to 6.8% in the prior quarter and 1.5% a year ago. In the third quarter of 2020, servicers initiated 48.2% more foreclosures than in the previous quarter and completed 14,097 mortgage modifications. Release.

FHFA Suspends Foreclosures and Evictions for Enterprise-Backed Mortgages


On March 18, the Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD) made a joint announcement to suspend all foreclosures and evictions for homeowners with mortgages backed by Freddie Mac and Fannie Mae for 60 days. The moratorium on evictions and foreclosures aim to provide relief for borrowers impacted by the coronavirus pandemic. FHFA Release. HUD Release. CFPB Release.

JPMorgan Sued Over $959 Million RMBS Trust

On October 10, the Bank of New York Mellon, suing as trustee for the J.P. Morgan Mortgage Acquisition Trust, Series 2006-WMC3 trust, filed a summons with notice in the Supreme Court for the State of New York against WMC Mortgage LLC, J.P. Morgan Mortgage Acquisition Corp., and JPMorgan Chase Bank.  The trustee alleges that the defendants breached contractual representations and warranties and discovered such breaches during origination, due diligence, and servicing of the loans, but failed to adhere to their notice and repurchase obligations with respect to at least 334 of mortgage loans in the $959 million RMBS trust.  Bank of New York Mellon also asserts that JPMorgan Chase Bank, as servicer, breached its servicing obligations through, among other things, ineffective collection activities, delays in foreclosure, and improper modifications.  The trustee seeks damages of no less than $475 million related to the alleged contractual breaches, rescissory damages, an order of specific performance of repurchase, reimbursement of expenses, and pre- and post-judgment interest.  Summons with Notice.

Arizona and Nevada Sue Bank of America Over Loan Modification and Foreclosure Practices

On December 17, 2010, the Arizona and Nevada attorneys general each filed complaints against Bank of America regarding loan modification and foreclosure practices. In Arizona, the complaint asserts violations of a consent judgment from March 13, 2009 and the Arizona Consumer Fraud Act, alleging that Bank of America has misled Arizona residents about loan modification programs, failed to make timely decisions on modification requests, and proceeded with foreclosures while modification decisions were pending. In Nevada, the complaint similarly asserts that Bank of America engaged in deceptive trading practices with Nevada residents. Consumer complaints prompted the investigation in Nevada, which ultimately resulted in the filing of the complaint. According to the Arizona attorney general, recent reports contend that Nevada and Arizona are first and second in the nation, respectively, with respect to foreclosures. Arizona Press Release. Nevada Press Release.

Statement by DC Attorney General on Foreclosure Enforcement

On October 27, Washington DC Attorney General Peter Nicklas issued an enforcement statement describing when notices used to commence foreclosures in DC may mislead homeowners and violate DC’s consumer protection law. The statement clarifies that a foreclosure may not be commenced against a DC homeowner unless the security interest of the current noteholder is properly supported by public filings with DC’s Recorder of Deeds. This requirement is not met through the use of the MERS registry.  DC Attorney General Release. Foreclosure Statement.

Congressional Request for Mortgage and Foreclosure Investigation

On October 4, representatives of the California Democratic Congressional Delegation (including Rep. Pelosi) sent a letter to U.S. Attorney General Holder, Fed Chairman Bernanke, and Acting Comptroller of the Currency Walsh urging an investigation into possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosure. Congressional Letter. Case Examples.