Retained by Florin Roebig, P.A.
In a recent American Arbitration Association proceeding, Dr. Andrew Zuppann and Vega Economics were retained by claimant’s counsel to provide an expert analysis regarding the respondents’ regulatory violations in the origination of mortgage loans.
The claimant brought a demand for arbitration against her former employers for unjust termination from her position in quality control after alerting management to various concerns with the loans originated by the respondents. More specifically, she alleged respondents violated multiple laws and regulations regarding proper loan origination procedures by failing to provide certain required disclosures, allowing conflicts of interest between originators and appraisers, and improperly closing loans, among other violations.
To assess these claims, the Vega team supported Dr. Zuppann’s investigation into the regulatory framework surrounding mortgage origination in the United States. The team analyzed provisions of Regulation X (12 C.F.R. § 1024), Regulation Z (12 C.F.R. § 1026), Regulation B (12 C.F.R. § 1002), and the False Claims Act (31 U.S.C. §§ 3729-33), as well as applicable state regulations and agency rules, to determine whether the respondents’ conduct violated applicable regulations or laws.
Dr. Zuppann then directed a loan file review of the origination-related documents for each of the loans. This review evaluated thousands of pages of loan files to corroborate the claimant’s allegations by uncovering regulatory violations and verifying the fact patterns underpinning the allegations.
For example, a review of the documents for one loan revealed that the respondents listed incorrect mortgage insurance figures on the loan estimate and closing disclosure forms, both of which are required disclosures under Regulation Z that must include specific information. Dr. Zuppann presented these findings, as well as a detailed description of the allegations, findings, and regulatory conclusions for each loan, in a series of loan-specific appendices.
The loan file review was able to successfully corroborate the claimant’s statements relating to deficient underwriting practices and reveal numerous violations of federal and state regulations. In fact, the loan file review was able to confirm a regulatory violation and/or corroborate a fact alleged for every one of the at-issue loans.