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Volume 8 - Number 8

April 17, 2015

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VA Servicing Sector is Growing, While FHA Market Shrinks

The outstanding supply of VA home loans in Ginnie Mae pools continued to grow during the first quarter of 2015, climbing 2.9 percent from the end of last year, according to a new Inside FHA/VA Lending analysis of loan-level mortgage-backed securities disclosures. Meanwhile, the supply of FHA loans in Ginnie pools fell 0.5 percent during the first quarter. Similarly, FHA loans in Ginnie MBS declined by 2.2 percent from the first quarter of 2014 while VA loans ... [Includes three data charts]

First Tennessee, DOJ Reach Interim Agreement on FHA-Related Claims

First Horizon National Corp. has announced an agreement in principle with the federal government to settle potential claims related to the underwriting and origination of FHA-insured mortgages during the run-up to the financial crisis. Disclosed in a regulatory filing, the agreement between First Tennessee Bank and the Department of Justice and the Department of Housing and Urban Development covers FHA loans originated from 2006 through 2008, which have gone to claim ...

DOJ, HUD Settlement with Defunct Lender Raises Recovery Issues

A recent $36 million settlement agreement between Golden First Mortgage Corp. and the federal government is raising questions about the lender’s ability to pay. The Department of Justice apparently has a plan to collect from a company that is no longer in business and hardly generated enough revenue to pay the full settlement amount. Whatever that plan is, the agency is not disclosing it. Based in upstate New York, Golden First agreed to pay up to resolve allegations that it ...

FTH, Special Programs Fuel Navy Fed’s Record Lending in March

First-time homebuyers and specialized loan products helped propel Navy Federal Credit Union’s mortgage originations over the $1 billion mark in March, the best month in the credit union’s 82-year history. Year-to-date, Navy Federal has made more than $2.5 billion in mortgages to members, which now include active-duty, retired and reserve personnel of all the armed services, as well as Department of Defense civilian employees and defense contractors. In March 2013, Navy Federal expanded its ...

FHA Looks at Non-Traditional Factors to Improve Credit Scoring

The FHA is looking at non-traditional factors in credit scoring that might be considered in determining a borrower’s creditworthiness. In remarks during a credit-access symposium co-hosted by the National Association of Realtors and other industry groups, Department of Housing and Urban Development Secretary Julian Castro said the FHA is looking at various alternative credit-scoring models that might help increase homeownership opportunities for more people ...

Reverse-Mortgage Lenders Seek Exclusion From Servicing Rules

The reverse mortgage lending industry is asking the Consumer Financial Protection Bureau to clarify that reverse mortgages are excluded from proposed changes to mortgage servicing rules relating to “successors in interest.” In a comment letter, the National Reverse Mortgage Lenders Association warned that requiring lenders to determine which parties meet a new regulatory definition of “successor in interest” could expose lenders to numerous, costly risks. The requirement would ...

Lenders, Consultants Urged to Learn New 203(k) Policies

The FHA is urging 203(k) program lenders and consultants to be aware of key policy revisions when reviewing the published versions of the 203(k) Rehabilitation Mortgage Insurance Program and 203(k) Consultant Requirements in the new Single-Family Housing Policy Handbook. The revised policies include changes to reflect a clearer, more direct and consistent language and terminology. However, they do not represent a significant departure from 203(k) origination policies or ...

1st Alliance Aims to Help Distressed Homeowners with New Platform

1st Alliance Lending of East Hartford, CT, has announced a new multi-channel lending platform to help underwater homeowners refinance into affordable government-backed mortgages and help those who have lost their homes previously in bankruptcy obtain a new mortgage. The platform focuses mainly on the FHA Short Refi program and the agency’s “Back to Work – Extenuating Circumstances” program. The multi-channel platform adds a wholesale channel to ...

CFPB Targets Lender for Falsely Suggesting FHA, VA Backing

Last week, the Consumer Financial Protection Bureau brought an enforcement action against RMK Financial Corp., an FHA/VA lender based in Rancho Cucamonga, CA, for allegedly using deceptive mortgage advertising practices, including the use of ads that led consumers to believe that the company was affiliated with the U.S. government. The bureau alleged that RMK, also known as Majestic Home Loans, used the names and logos of the Department of Veterans Affairs and ...

New Day USA Faulted for SAFE Act Testing Violations

New Day USA, a major VA lender, agreed to a multi-million dollar settlement this week with state regulators and removed its chief operating officer due to widespread violations involving the Secure and Fair Enforcement for Mortgage Licensing Act. The lender will pay a $5.28 million administrative penalty as part of a consent order and settlement with regulators from 42 states and Washington, DC. New Day also removed COO Paul Alger. In order to meet continuing education requirements ...

FHA Prepayment Speeds Above, Loss Rates Below Projections

Low interest rates have pushed FHA prepayments to 34 percent above actual predictions while claim payments are 24 percent below predicted levels in 2014, according to the agency’s most recent quarterly report to Congress. Actual loss rates of 47.43 percent remained below the actuarially projected 54.65 percent, the report showed. Meanwhile, the Mutual Mortgage Insurance Fund account balances totaled $46.2 billion in the fourth quarter, no change from the previous quarter ...

Around the Industry

New Standards for VA Compliance Inspectors. The Department of Veterans Affairs announced that compliance inspectors must adhere to new qualifications and pass an updated, more comprehensive exam that includes information relevant to Specially Adapted Housing. Policy staff decided the current exam was not effective since it did not address issues such as SAH-specific building practices, procedures, and minimum property requirements ... [Includes two briefs]

Poll

The Supreme Court recently decided that mortgage loan officers are entitled to overtime pay. How has this affected your shop?

It's a very big deal, but our company will limit OT pay or pay very little.
It’s sort of a big deal, but we have no plans to pay overtime pay at all.
We have no problem paying our LOs OT.
We’re still studying the case and have not yet decided what to do.

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