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A unanimous U.S. Supreme Court ruled yesterday that a debtor in a chapter 13 bankruptcy proceeding may not immediately appeal the rejection of his proposed repayment plan, the National Law Journal reported yesterday. A bankruptcy court's order denying confirmation of the proposed plan is not an appealable final order, Chief Justice John Roberts Jr. wrote in Bullard v. Blue Hills Bank. The federal bankruptcy appeals statute authorizes appeals from final judgments in cases but also from “final judgments, orders and decrees … in cases and proceedings.” The federal circuit courts had split over what an immediately appealable "proceeding" is under chapter 13. "The relevant proceeding is the process of attempting to arrive at an approved plan that would allow the bankruptcy to move forward," Roberts wrote. "This is so, first and foremost, because only plan confirmation — or case dismissal — alters the status quo and fixes the rights and obligations of the parties." Read more. (Subscription required.)

Click here to read the Supreme Court’s opinion.

A government mortgage agency says that it needs more resources to police the growing ranks of companies rushing to fill the void left by big banks that have stepped away from the market for riskier home loans, the Wall Street Journal reported yesterday. Ginnie Mae is asking for more staff in part to vet the rising number of nonbank lenders making loans insured by the Federal Housing Administration, whose program makes it possible for borrowers with weaker credit to get loans with down payments as low as 3.5 percent. In the past year big banks, such as Wells Fargo & Co. and Bank of America Corp., have pulled back sharply from the market after a series of multimillion-dollar legal settlements for mistakes made during the crisis. The U.S. Department of Justice has said that the banks defrauded the government by submitting loans for insurance by the FHA that weren’t eligible by misstating borrowers’ incomes or property values. The banks admitted fault in most cases, but some now say they were treated unfairly. The pullback has left an opening for nonbank lenders, such as loanDepot LLC and Guild Mortgage Co., to grab market share. Ginnie Mae, which backs mortgage securities that include FHA and other federally insured loans, expects nonbank lenders to account for about 60 percent of its business this year, up from about half last year and less than a fifth in 2011.

The Justice Department filed a lawsuit yesterday against Quicken Loans, the nation’s third-largest mortgage lender, contending that it made hundreds of improper loans through the Federal Housing Administration lending program, costing the agency millions of dollars, the New York Times reported today. The FHA does not make loans itself, but insures them. Participating lenders, including Quicken, which makes more FHA loans than any other institution, have the authority to originate, underwrite and certify mortgages covered by FHA insurance. Under the program, if the borrower later defaults, the holder of the loan can file an insurance claim to cover losses.

Fannie Mae will begin bulk auctions of mortgages, including some sales targeted for nonprofit groups and small investors, as the company moves to cut the number of nonperforming loans on its books, Bloomberg News reported yesterday. “These transactions are intended to reduce the number of seriously delinquent loans that Fannie Mae owns, to help stabilize neighborhoods and to offer borrowers access to additional foreclosure prevention options,” Fannie Mae Senior Vice President Joy Cianci said. “Our goal is to market these loans to a diverse range of buyers.” The Federal Housing Finance Agency, which has overseen U.S. conservatorship of Freddie Mac and Fannie Mae since 2008, is requiring the companies to reduce the number of severely delinquent loans on their books this year. In March, the agency released a set of new rules for the sale of troubled mortgages. Freddie Mac has auctioned about $2 billion in defaulted debt in three separate sales since last year. Fannie Mae’s first sale will happen “in the near future,” the company said.

The Supreme Court today will be considering Bullard v. Hyde Park Savings Bank and Harris v. Viegelahn today at oral argument. In Bullard, the Court will consider the issue of whether an order denying confirmation of a bankruptcy plan is appealable. The Court will also hear oral argument in Harris of whether, when a debtor in good faith converts a bankruptcy case to chapter 7 after confirmation of a chapter 13 plan, undistributed funds held by the chapter 13 trustee are refunded to the debtor (as the Third Circuit held in In re Michael), or distributed to creditors (as the Fifth Circuit held). For more on these cases and other bankruptcy cases before the Supreme Court, please click here.

Thousands of Americans who have skipped years of mortgage payments and are still living in their homes may get to keep their homes without ever having to pay another dime thanks to a legal quirk, the New York Times reported today. The reason, lawyers for homeowners argue, is that the cases have dragged on too long. There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures. However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.

Senate Banking Committee Chair Richard Shelby’s (R.-Ala.) declaration on Wednesday that Fannie Mae and Freddie Mac will likely remain in U.S. conservatorship shifts the task of reducing taxpayer mortgage risk mostly to Mel Watt, director of the Federal Housing Finance Agency, Bloomberg News reported yesterday. Shelby snuffed out any chance that Congress would overhaul the $11 trillion housing-finance system in the 114th Congress. President Barack Obama’s insistence on a continued government role in supporting the housing market puts him and fellow Democrats at loggerheads with the powerful banking chairman. That increases pressure on Watt, director of the Federal Housing Finance Agency, to accelerate regulatory efforts to remake Fannie Mae and Freddie Mac — under rules of a crisis-era conservatorship that’s heading into a seventh year.