Mortgage

Consumer advocates welcomed a federal effort aiming to prevent predatory mortgage lending at a town hall in Baltimore on Thursday, but expressed worries that new rules would not halt discrimination. The Consumer Financial Protection Bureau unveiled a rule to be imposed a year from now that would require mortgage lenders to document and verify that a borrower will be able to repay a loan. The policy is intended to prohibit so-called "no-doc" and "low-doc" loans that were common during the housing boom.

Richard Cordray, the director of the Consumer Financial Protection Bureau, is expected to announce the issuance of a pioneering federal rule Thursday that is intended to help prevent a repeat of the risky mortgage lending that led to the recent housing boom and bust. He is scheduled to declare the adoption of the final "ability-to-repay" rule in remarks prior to a town hall meeting about mortgage policy at Westminster Hall in downtown Baltimore. The rule is set to take effect one year from Thursday.

Periodically, one comes across a jaw-dropping example of lawsuit abuse. The Good Samaritan gets sued for preventing a suicide, the robber takes the store clerk to court for fighting back, the B-list starlet sues because nobody watched her sex tape (apocryphal perhaps, but bound to happen someday). But for size, breadth, ingratitude - and sheer chutzpah - it will be tough to beat what a group of executives is seriously contemplating on Wednesday. That's when the board of directors of American International Group, or AIG, will be reviewing whether to join a $25 billion lawsuit against the U.S. government on the grounds that the federal bailout of the insurance giant shortchanged shareholders.

The Consumer Financial Protection Bureau will hold a hearing in Baltimore on Thursday, Jan. 10, to talk about mortgage policy. This will be the first field hearing by the agency in Baltimore. It's open to the public. Consumers can get a chance to hear CFPB Director Richard Cordray - and hopefully get to question him - and hear a panel of consumer advocates, industry players and financial experts talk about mortgages. The 11 a.m. event will be held at Westminster Hall, 519 W. Fayette St.

The 25-year-old Baltimore-based law firm Offit Kurman recently formed a pioneering mortgage compliance affiliate, C3 Compliance Consultants, to help lenders across the United States conform with regulations launched this year by the federal Consumer Financial Protection Bureau (CFPB), a creation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Veteran mortgage banking and employment law attorney Ari Karen is founder and director of the new venture. C3's services are in high demand by companies from Los Angeles to Boston, Karen said.

Federal officials have extended a regulatory waiver that makes it easier to "flip" properties - a move meant to encourage the renovation of foreclosed homes but that critics say could herald the return of predatory schemes. The Federal Housing Administration has waived through 2014 an anti-flipping regulation, which had prevented the agency from insuring mortgages on properties sold within 90 days of acquisition. The waiver, first implemented in 2010 to bolster the flagging housing market, is intended to enable investors to buy and quickly rehab properties as the market continues to struggle.

Three Marylanders have been indicted for mortgage fraud related to homes in Baltimore's Reservoir Hill neighborhood, federal prosecutors announced Friday. Kimberly Eileen McMillian, 45, of Baltimore, Olutoyin Oladosu, 53, of Lanham, and Glenroy Emanuel Day, Sr., 73, of Baltimore, were indicted by a grand jury Wednesday on charges of conspiracy to commit and committing wire fraud, the U.S. Attorney's Office for Maryland said in a statement. McMillian, prosecutors allege, pretended to be a real estate agent representing New York investors interested in buying properties in Baltimore.

An Upper Marlboro mortgage broker has admitted to inflating her clients' incomes so that they would qualify for larger mortgage loans - a scheme that caused lenders to lose more than $1.3 million, officials said. Licensed mortgage broker and the owner of the Newgate Mortgage company, Shola Risikat Balogun, pleaded guilty Wednesday in federal court to conspiracy to commit wire fraud in connection with a plot she led to make money off loan origination fees, commissions and other premiums, according to a statement from the U.S. Attorney's Office for Maryland.

Almost a year after five big banks signed a $25 billion national mortgage settlement with 49 state attorneys general last February, too few families are getting relief, too many of those getting some help continue to lose their homes to short sales, and we still don't have the data we need to know whether the communities hit hardest by the foreclosure crisis are getting the help they need. To make the settlement fulfill its promise, the banks need to step up the pace of principal reductions, and federal regulators need to do much more to help working families save their homes.