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The Consumer Financial Protection Bureau (CFPB) announced yesterday that it resolved an appeal in a long-running enforcement suit against a foreclosure relief scam operation for $12 million in consumer redress and penalties, according to a CFPB press release. Consumer First Legal Group, LLC and four attorneys, Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford, charged millions of dollars in illegal advance fees to financially-distressed homeowners for legal representation the defendants promised but did not provide. This case was part of a coordinated effort against various foreclosure relief scam operations by the CFPB, Federal Trade Commission (FTC), and 15 states in 2014. The CFPB filed three lawsuits, the FTC filed six lawsuits, and the states took 32 actions. The CFPB won a judgment against the defendants in 2019. The case has been ongoing given multiple appeals. Today’s settlement brings the case to an end. Under the resolution announced today, the defendants will pay $10.9 million in consumer redress and a $1.1 million penalty into the CFPB’s victims relief fund. The individual defendants are covered by 8- or 5-year bans from the mortgage assistance industry, under the district court’s original order.

New York Community Bancorp has been reaching out to investors for capital to finance a large portfolio of residential mortgages as pressures on the regional lender mount, Bloomberg News reported. The company is seeking third-party capital that would inject liquidity into a portfolio of residential mortgages held under its Flagstar Bank unit. Among the options is a synthetic risk transfer backed by a portfolio of about $5 billion of home loans originated when interest rates were lower, said the people, who asked not to be identified discussing information that isn’t public. In a synthetic securitization, banks offload their exposure to loans by effectively transferring the risk of the assets to the buyer. NYCB also is exploring the sale of a roughly $1 billion portfolio of recreational-vehicle and marine loans. The talks were underway before NYCB reported a surprise loss a week ago that was tied to deteriorating credit quality, and announced a cut to its dividend — moves that sent the bank’s shares sinking. NYCB’s loan-loss provision surged to $552 million in the fourth quarter, more than 10 times analysts’ estimates. NYCB shares, which touched a 27-year low on Tuesday, extended that decline Wednesday after executives tried to reassure investors that its financial position is strong. Deposits have increased since the end of last year and liquidity remains “ample,” the bank said in a statement on Tuesday.

First National Bank of Pennsylvania was sued on Monday by the U.S. Department of Justice and the state of North Carolina, which accused it of lending discrimination known as redlining in the Charlotte and Winston-Salem, North Carolina markets, Reuters reported. According to a federal complaint, FNB violated the federal Fair Housing Act and Equal Credit Opportunity Act by avoiding home loans and other mortgage services between 2017 and 2021 in majority-Black and Hispanic neighborhoods. The Pittsburgh-based bank's redlining allegedly included locating and maintaining nearly all branch locations and mortgage loan officers outside these neighborhoods, and relying on majority-white areas for referrals and loan applications. Though Charlotte and Winston-Salem had a respective 32% and 22% of census tracts in majority-Black and Hispanic areas, FNB devoted just one of 18 branches in each region to those tracts — and closed the Winston-Salem branch in 2021, the complaint said. The lawsuit seeks restitution to victims, a civil fine, an injunction against further redlining and other remedies.

Bank of America agreed to pay a $12 million fine to settle U.S. regulatory charges that it routinely submitted inaccurate information about mortgage applicants to the federal government, violating a law that thousands of mortgage lenders have followed for decades, Reuters reported. The U.S. Consumer Financial Protection Bureau said on Tuesday that more than 400 loan officers at the second-largest U.S. bank failed to ask applicants required questions about their race, ethnicity and sex, and then falsely reported that the applicants chose not to respond. Failing to accurately report demographic data violates the Home Mortgage Disclosure Act, a 1975 law that helps regulators assess whether lenders are serving their communities' housing needs and are not engaged in discriminatory lending, the CFPB said. Bank of America did not admit or deny wrongdoing in accepting the civil fine, which covered alleged conduct between 2016 and 2021.