When interest rates take an unexpected dive – as they did in the first quarter – it can wreak havoc on servicing assets as banks and nonbanks try to calculate a fair market value for their residential receivables. According to interviews conducted by Inside Mortgage Finance and based on a compilation of values by Piper Jaffray, certain megabanks assigned some of the lowest values in years to their portfolios during the first quarter of this year. Bank of America, for instance, which usually ranks third among all servicers, assigned...[Includes one data table]
Freedom Mortgage Corp. has agreed to pay the federal government $113 million to resolve alleged violations of the federal False Claims Act and FHA requirements in connection with the origination of FHA-insured single-family mortgages. The April 15 settlement agreement between the New Jersey-based mortgage lender and the Department of Justice comes in the wake of a record $1.2 billion settlement between DOJ and Wells Fargo, which earlier admitted to false certification of defective mortgages for FHA insurance and failure to file timely reports on several thousand loans that were materially defective or badly underwritten. Like Wells Fargo, Freedom Mortgage failed...
Closing times for purchase mortgages are starting to recover from delays tied to the TRID disclosure rule, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The Consumer Financial Protection Bureau’s final rule combining disclosure requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act took effect in early October. Average closing times for various mortgage types increased in the following months, though performance has improved recently, according to HousingPulse. For example, the original closing time for purchase mortgages with a downpayment of at least 20 percent where the loan will be delivered to the government-sponsored enterprises was...
The new principal-reduction option for Fannie Mae and Freddie Mac loan modifications could end up affecting only about 6,000 delinquent borrowers, according to an Urban Institute analysis. The Federal Housing Finance Agency late last week announced that the government-sponsored enterprises would do principal writedowns for a small population of distressed borrowers. The program is limited to loans that were seriously delinquent as of March 31, had loan amounts of less than $250,000 and unpaid debt, including arrearages, exceeding 115 percent of the current market value of the home. The FHFA estimated...
A pilot effort by the Treasury Department’s Financial Crimes Enforcement Network is underway in New York City and Miami to track suspicious “all cash” purchases of high-end residential properties as part of the government’s anti-money laundering (AML) enforcement. In remarks during a recent AML conference in Florida, FinCEN Director Jennifer Shasky Calvery said geographic targeting orders (GTOs) were issued by the agency in January this year and went into effect on March 1. They require identification of high-end cash buyers to ensure luxury residences purchased with cash are not masking money laundering activities. Specifically, U.S. title insurance companies are temporarily required...
Borrowers saddled with student loan debt now have a better chance of qualifying for an FHA mortgage, thanks to a recent change in the way lenders factor such payments in the calculation of a borrower’s debt-to-income ratio. Under newly revised guidance announced by the FHA recently, lenders may apply the same calculation criteria used in the mortgage industry regardless of the type of student loan-payment plan (such as income-based payment plans) or a deferred-payment plan. Currently, there are...
Wells Fargo was the top seller to the GSEs in the first quarter with $22.75 billion, followed by Quicken Loans ($11.33 billion) and JPMorgan Chase ($6.87 billion).
It’s expected that Blackstone/Finance of America will target borrowers who are self-employed and have a harder time qualifying for conventional mortgages.
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