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"Mortgage Mayhem" - Larry Platt Will Discuss the Implications of Coming 2014 Rule Changes - Platt

Mortgage Mayhem?

Please join the Hedgeye Financials Team, Josh Steiner and Jonathan Casteleyn for a candid conversation with industry authority Larry Platt on the Implications of Forthcoming Rule Changes in 2014.


Tomorrow, December 17th at 1:00 pm EST we will host our next installment in the Hedgeye Financials Thought Leader Roundtable Series. Our guest will be mortgage industry authority Larry Platt from the law firm of K&L Gates.  



  1. From where will the loans come? By virtually all accounts, limiting lending to QM lending will freeze out a large swath of the next generation of home buyers.  
    • Who wants to invest in an industry where the volume just isn't there?  What is the likelihood that lending will occur outside of the QM/QRM box?
  2. Is secured lending dead? Have the dramatic increases in servicing requirements and the virtual infeasibility of foreclosing on a delinquent borrower converted a secured loan to an unsecured loan and is the typical interest rate on a mortgage loan with an unenforceable mortgage too low to take the risk?  
    • Note that there now is a federal cause of action to stop a foreclosure based on an alleged violation of the ability to repay requirements, loan originator comp restriction and certain of the new servicing regs. Do servicers get paid enough to handle default servicing? What impact has this had on the servicing market?
  3. Is it too dangerous to do business with the federal government?  For anybody who thinks non-QM lending is risky, some believe that making and servicing FHA-insured loans is probably the riskiest thing out there these days.   
    • Imprecise rules with uneven application and political enforcement is a recipe for a financial bloodbath.  Many of the private investors believe that FHA lending and servicing is simply too risky.   
    • Unlike the risk of expropriation from third world countries, one can't buy political risk insurance to protect against the risks.  And to the extent that the GSEs are considered the government, the risk intensifies.
  4. Will the CFPB prevent you from making money? Some might want to applaud the relative even-handedness of the CFPB in both its rulemaking and supervisory efforts.  As we start to move more down the enforcement path, should we be so optimistic?   
    • This is particularly true with respect to the broad remedies available to the CFPB, including (i)  in certain circumstances its statutory rights to go upstream against owners and to assert aiding and abetting claims against third parties and (ii) virtually unfettered broad authority to bring UDAP claims.  Will it be balanced in its approach?
  5. When will the private securitization market return?  Where are we on GSE reform?  Hard to make or purchase loans if there is no ultimate take out investor?  
    • Even the most optimistic originators, who will build to anybody's specifications, can't or won't make loans that they ultimately can't sell.  Who wants to make a loan at par that it only can sell at a discount from par the next day?


Larry Platt is a partner at K&L Gates LLP and concentrates his legal practice in representing purchasers and sellers of mortgage companies and mortgage-related assets, counseling clients on federal and state consumer credit laws, defending clients in government enforcement actions, and representing clients in governmental public policy matters. From 2007 to 2013, Chambers USA, an independent and research-based guide to the legal profession, ranked K&L Gates as having one of the leading financial services practices in the country. Most recently, the group earned a national, "Band 1" ranking for "Financial Services Regulation: Consumer Finance (Compliance & Litigation)." Mr. Platt is consistently ranked by Chambers USA and in 2013, he was listed under Financial Services Regulation: Consumer Finance (Compliance) (Star Individuals) and Financial Services Regulation: Consumer Finance (Litigation) (Band 1).  Mr. Platt was listed in the 2012, 2013 and 2014 Best Lawyers in America guides in the area of banking and finance law.

Representative Work: 

  • Bank of America: Sale of over $400 billion in mortgage servicing rights.
  • MetLife Bank: Sale of approximately $70 billion in mortgage servicing rights.
  • LaSalle Bank: Sale of capital stock of ABN AMRO Mortgage Group, Inc., including $240 billon in mortgage servicing rights.
  • Washington Mutual Bank: Sale of $140 billion in mortgage servicing rights to Wells Fargo Bank, N.A.
  • Barclays Bank PLC: Purchase of mortgage servicing business of HomEq Servicing Corporation, including $40 billion in servicing rights.
  • TD Banknorth, N.A.: Negotiation of "private label," origination outsource arrangement with PHH Mortgage Corporation.
  • KB Home: Sale of substantially all of the assets of mortgage company subsidiary to Countrywide Home Loans, Inc., along with execution of long term joint venture for future origination of mortgage loans.
  • GMAC Mortgage Corporation: Purchase of substantially all of the assets of a wholesale mortgage lender, Pacific Republic Mortgage Corporation.
  • The Principal Financial Group, Inc.: Sale of capital stock of Principal Residential Mortgage, Inc.
  • Merrill Lynch Mortgage Capital: Purchase of capital stock of loan servicer, Wilshire Credit Corporation.
  • Wells Fargo Home Mortgage Corporation: Purchase of servicing platform of GE Capital Mortgage Services, Inc., with a separate subserving platform, and purchase of approximately $35 billion in servicing rights from First Union Mortgage Corporation.


K&L Gates LLP comprises more than 2,000 lawyers who practice in 48 offices located on five continents.  For the third year, K&L Gates was named among top two firms for first-tier rankings in the annual U.S. News-Best Lawyers "Best Law Firms" survey, In 2012, Corporate Board Member magazine, in association with FTI Consulting, Inc., ranked K&L Gates as one of the top 25 law firms in its annual list of "America's Best Corporate Law Firms." The 2013 BTI Consulting Group survey of corporate counsel included the firm in its "BTI Client Service 30," an elite ranking that recognizes the leading law firms in driving superior client relationships according to general counsel.


Please email  to learn more about this call. Attendance on the call is limited. Please note if you are not a current subscriber to our Financials research there will be a fee associated with this call.