A Houston mortgage servicer may be one of the few companies to avoid an unfavorable court decision or complicated settlement for allegedly over-escrowing mortgage accounts, but it will have to wait until an appeal by the Louisiana attorney general is resolved before it can celebrate. The case, the State of Louisiana vs. Bisys Loan Services, Civil Action No. 94-1768, was filed in by Louisiana Attorney General Richard P. Ieyoub, who charged that Bisys and 86 other mortgage lenders and servicers had over-escrowed borrowers mortgage accounts. The state charged that the servicers had violated the Real Estate Settlement Procedures Act, Racketeer Influenced and Corrupt Organizations Act, the Louisiana Unfair Trade Practices and Consumer Protection Law, and other statutes. The state later dropped its charges to all claims except Respa and UTP. A bevy of lenders and servicers has faced over-escrowing litigation recently, the latest being Barclays American/Mortgage Corp. and PNC Mortgage Corp., both of which are arranging settlement agreements with the class under separate legal actions. But Bisys, which was the only servicer of the 87 named to be brought to court by the state, had persuaded a court that it had not deliberately over-escrowed the mortgage accounts of its borrowersor so it thought. Eastern District of Louisiana Judge Ginger Berrigan dismissed Louisianas Respa claim citing another case, Allison vs. Liberty Savings, and the courts finding that Respas Section 2609 did not provide a remedy for violation of 2609. Berrigan also applied a four-part test established by the Supreme Court in Cort vs. Ash, and, giving further support for her decision, found that Section 2609 does not give rise to private rights of action. She also threw out the states UTP claims. Attorneys for Bisys thought the proceedings were nearly finished, but after Berrigan recused herself from the case after discovering she owned stock in a parent company of one of the defendants, the state asked the court to allow it to amend its complaint to renew the RICO claim it had previously abandoned, along with the Respa and UTP claims Berrigan had dismissed. The court, under another judge, Martin L.C. Feldman, denied that request May 23 and dismissed the case June 7. The state, in addition to appealing the decision to the U.S. 5th Circuit Court of Appeals, also filed a new complaint that Bisys claims is virtually identical to the complaint dismissed by Berrigan. Roger Stetter, of Lemle & Kelleher in New Orleans, has represented Bisys and contends the new charges should be barred from proceedings based on res judicata, which the 5th Circuit Court uses to bar legal actions based on whether parties in both suits are identical, prior judgments were rendered by a court of competent jurisdiction, a final judgment rendered and the same cause of action is involved.
-
The U.S. arm of Spanish banking giant Santander has hired Swati Bhatia to oversee retail banking and its digital transformation efforts. Bhatia joins at "an inflection point" for the company, which aims to be "a digital bank with branches," CEO Tim Wennes said.
20m ago -
Mariya Rosberg is named Americas head of banking and financial services at Marsh McLennan's Oliver Wyman unit; startup ZayZoon raised $15 million in a new funding round; and more in the weekly banking news roundup.
24m ago -
Last year, the Raleigh, N.C.-based Integrated called off a deal to sell itself to MVB Financial after bank stocks took a hit in the aftermath of the regional bank failures. Capital hopes to expand its government-guaranteed lending with the transaction.
58m ago -
Once a prominent figure spurring financial institutions to engage in cryptocurrency, Bankman-Fried's downslide began with the collapse of the digital asset exchange FTX in late 2022 and hit rock bottom with his sentencing to 25 years in prison.
1h ago -
But the 30-year fixed rate mortgage is still near 7%, and that remains the overhang on the housing market, Freddie Mac said.
1h ago -
The bank is launching KeyVAM, a virtual account management offering it designed with fintech Qolo. Both companies said the nature of the relationship was as important as the technology it produced.
6h ago