Real Estate News

A U.S. District Judge dismissed a lawsuit yesterday against rating companies Standard & Poor and Moody’s that claimed the two groups were responsible for defrauding investors who purchased about $100 billion in mortgage-backed securities in the lead up to the market collapse, according to Bloomberg. The plaintiffs in the suit alleged that the ratings agencies had a conflict of interest in the bonds they evaluated, and that they had, subsequently, disregarded standard ratings guidelines when ranking the mortgage-backed securities. The ruling could have a wide-ranging impact on other lawsuits that are pending against the two ratings companies, including one in New York State. Moody’s lawyer James Coster said he’s optimistic over how this ruling could effect his company’s upcoming litigations. “It was a very good day for the ratings agencies,” Coster said of the dismissal.

CWCaptial, the financial group that took over the senior mortgage at Stuyvesant Town and Peter Cooper Village early this week, broke its silence in a letter to City Council member and Stuy Town rent stabilization advocate Dan Garodnick, according to the New York Observer. Despite the special servicer’s reluctance to publicly comment on the ongoing Stuyvesant Town mortgage melee, the letter, written by Charles Spetka, president of CWCaptial, heaps praise on the council member, referring to Garodnick as “an outstanding community leader,” and promises that CWCapital will “make every effort to work cooperatively with [Garodnick] and the [Stuyvesant Town and Peter Cooper Village] residents.” Although Spetka noted that his company’s first priority is to secure the $3 billion owed to mortgage lenders, he said that CWCapital “believe[s] strongly that the underlying value of these properties is directly linked to maintaining the [positive] attributes of Peter Cooper Village and Stuyvesant Town.”

On the eve of his first meeting as chair of the City Council's Land Use Committee, southeast Queens Council member Leroy Comrie spoke with The Real Deal about how he will judge success, whether he has laid out specific goals and which upcoming land use projects could be the most controversial. Comrie was voted in as chairman last Thursday and is scheduled to call his first committee meeting to order today at 10 a.m. with three rezonings and 11 landmarkings to consider.

Mortgage guarantor Ginnie Mae and the Federal Housing Administration have bumped a Long Island-based lender from a government-insured mortgage program that had allowed it to grant FHA-backed mortgages, while simultaneously denying the company the right to sell mortgage-backed securities. The lender, TopDot Mortgage, reportedly violated federal lending rules on numerous occasions, according to the Center for Public Interity, and had accrued a portfolio of $181.2 million in Ginnie Mae securities before the federal agency took action. Ginnie Mae had allowed TopDot to sell FHA loans in the secondary mortgage market, despite the fact that the lender has been the target of several lawsuits accusing it of misleading borrowers about the terms of its FHA loans. Additionally, TopDot’s FHA loan default rate was found to be more than double that of comparable lenders in the area, hitting about 14.3 percent in the last two years. “This lender demonstrated a pattern of utter disregard for how we do business,” David Stevens, FHA commissioner, said.