Monday’s Adjudication Roundup

A New York bankruptcy judge denied several mortgage originators’ motions to dismiss for Residential Capital LLC’s claims that they sold billions of dollars in defective loans.
A few weeks after settling with the SEC for $58 million for fraudulent ratings on commercial mortgage-backed securities, Standards & Poor settles with the U.S. Department of Justice for $1.38 billion for the same fraudulent ratings.
After dismissing a suit against Royal Bank of Scotland, Deutsche Bank and others in 2011 over mortgage-backed securities and the Second Circuit Court of Appeals nixed her dismissal, U.S. District Court Judge Deborah A. Batts has permitted New Jersey Carpenters Health Fund to file a third amended complaint to revive the suit. This could end up costing the banks $7.7 billion if the suit is successful.

Bank of America has defeated Prudential’s claims that it sold $2 billion of fraudulent residential mortgage-backed securities.

Friday’s Tax Roundup

Regional House Price Segmentation and Convergence in the US: A New Approach by William Miles, Journal of Real Estate Finance and Economics, Vol. 50, No. 1, 2015.
Impacts of Planning Rules, Regulations, Uncertainty and Delay on Residential Property Development by Arthur Grimes & Ian Mitchell, Motu Working Paper No. 15-20.
Credit Supply and the Housing Boom by Alejandro Justiniano, Giorgio E. Primiceri, & Andrea Tamalotti, NBER Working Paper No. w20874.
Rethinking the Tax-Revenue Effect of REIT Taxation by Bradley T. Borden, Florida Tax Review, Vol. 17, Issue 6, 2015, Forthcoming; Brooklyn Law Review, Legal Studies Paper No. 400.
The Politics and Economics of Metropolitan Sprawl by William A. Fischel, Zoning Rules! The Economics of Land Use Regulation. Cambridge, Mass.: Lincoln Institute of Land Policy, 2015, Forthcoming.
Property Law Conflicts by Joseph William Singer, 54 Washburn Law Journal 139 (2014) (discussing what law applies to real property case conflicts).

S&P agrees to settlement of $58 million for fraudulent ratings on commercial mortgage-backed securities.
- SEC order regarding violations of Section 17(a)(1) of the Securities Act, Section 15E(c)(3) of the Exchange Act, and Exchange Act Rules 17g-2(a)(2)(iii) and 17g-2(a)(6). $6.2 million disgorgement, plus $800,000 prejudgment interest, and $35 million civil money penalty for affirmatively claiming to use one method of rating when it was actually using another method.
- SEC order regarding violations of Section 17(a)(l) of the Securities Act and Exchange Act Rule 17g-2(a)(6). $15 million penalty for publishing “false and misleading article purporting to show that its new credit enhancement levels could withstand Great Depression-era levels of economic stress.”
- SEC order regarding violations of Section 15E(c)(3)(a) of the Exchange Act and Exchange Act Rules 17g-2(a)(2)(iii) and 17g-2(a)(6). $1 million civil money penalty for failure in oversight of residential mortgage-backed securities (RMBS) ratings.
- SEC order regarding a public hearing.
Following the Consumer Financial Protection Bureau filing a complaint in the District Court for the District of Maryland, JP Morgan and Wells Fargo agreed to pay $37.5 million in penalties for a mortgage-kickback scheme with a title company.
The Supreme Court heard oral arguments for disparate impact case on January 21^st. (Whether disparate impact is a cognizable claim under the Fair Housing Act).