Since 2008, the two government-sponsored enterprises charged with cultivating the secondary mortgage market have been under public conservatorship. The Mortgage Bankers Association has proposed an ambitious plan for transitioning those entities to a long-term structure that would retain—as a last resort—the option of a taxpayer bailout. MBA’s plan, while appearing solid on paper, would benefit from support from non-financial sectors.
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With a recent ruling by a federal appellate court in Philadelphia, the string of victories for Mortgage Electronic Registration Systems, Inc. (MERS), continues unabated. Once again, a would-be class of county recorders challenged MERS’s practice of not recording mortgage transfers, and once again, an appellate court rejected the officials’ arguments. This much is clear: instead

A pair of bills currently working their way through the 114th Congress would help some members of the real estate industry yet hurt others. The first bill would bar class actions in which people suffer no money damages; the second would prohibit referrals between affiliated businesses.

The Fairness in Class Action Litigation Act of 2015 (H.R. 1927), which is sponsored by House Judiciary Chairman Bob Goodlatte (R-Va.) and Constitution and Civil Justice Subcommittee Chairman Trent Franks (R-Ariz.), targets “no injury” class actions. Those are cases in which class members have lost no money; instead the plaintiffs complain about alleged violations of statutory rights, like those under RESPA (to a taint-free transaction) or TILA (to receive certain disclosures). The problem with these lawsuits, critics say, is that they expose honest companies to devastating liability for what are arguably technical violations that ultimately hurt no one.


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