The Countrywide Financial legacy continues to sour for Bank of America, which recently was compelled to agree to pay $335 million to settle charges that Countrywide allowed pricing discrimination against African American and Hispanic borrowers, along with unchecked steering to subprime loans, when similarly qualified Caucasian borrowers were given prime loans at lower cost. It’s the largest fair lending settlement to date. This is the first time that the Justice Department has alleged and obtained relief for borrowers who were steered into mortgages because of their race or national origin, government officials said. The settlement – which requires court approval – mandates that Countrywide implement policies and practices to prevent discrimination if it returns to the lending business during the next four years. Countrywide currently operates as a subsidiary of Bank of America but does not originate new loans.

President Barack Obama surprised the mortgage lending industry and friend and foe alike with a controversial decision to make a recess appointment of Richard Cordray as director of the Consumer Financial Protection Bureau, even though Congress technically remains in session. Assuming the recess appointment of Cordray proceeds without a challenge (see related story on page 2), it’s now “game on” for the CFPB and the mortgage lending industry, according to Christopher Willis, a partner in the Atlanta office of the Ballard Spahr law firm. “Unless the appointment is successfully challenged, this move will open up a whole range of powers to the bureau, including the power to regulate non-bank players and the authority to act under the ‘unfair, deceptive or abusive’ provisions in the Dodd-Frank Act,” he said. “That sets the stage for whether someone wants to challenge that power.”

The number of FHA endorsements grew by a whisper in November, up 0.2 percent to 88,206 from 88,060 in October, and down a screaming 32.8 percent from last year, according to Inside FHA Lending’s analysis of agency data. Endorsements for the month totaled $14.5 billion, with purchases and first-time homebuyers leading the way. Approved lenders accounted for the bulk of originations during the month, 79.8 percent. Purchase transactions comprised 64.8 percent of total originations for the month. An estimated 96.1 percent of loans insured by FHA were fixed-rate mortgages. Purchase loans with FHA...

The Department of Housing and Urban Development has awarded more than $10 million for housing counseling services to help homeowners resolve mortgage delinquencies, defaults and foreclosure in order to preserve homeownership. Funding was given to 26 national and regional organizations, and 139 state and local housing agencies that already provide housing counseling services to minority and first-time homebuyers. Under the department’s Housing Counseling Program, HUD partners with qualified nonprofit organizations to provide housing counseling to low- and moderate-income individuals and families...

MGIC Investment Corp. pumped $200 million into its ailing mortgage insurance operation, Mortgage Guaranty Insurance Corp., to increase its statutory capital and enable it to continue writing new business. The capital infusion is part of a survival strategy mapped out by the private MI company two years ago, with the concurrence of the Wisconsin Office of the Commissioner of Insurance (OCI), Fannie Mae and Freddie Mac. The strategy included a waiver from the OCI capital requirements as well as approvals by the two government-sponsored enterprises of MGIC’s subsidiary, MGIC Indemnity Corp. (MIC), as an...

Veterans will be able to borrow up to a possible maximum of $625,500 in some high-cost areas to purchase or refinance a single-family house under the Department of Veterans Affairs’ loan limits for 2012. The amount of mortgage a veteran could qualify for would depend on the median county price and the VA’s new method for calculating loan limits on a county-by-county basis. In Hawaii, Guam, Alaska and the Virgin Islands, limits will range from $625,500 to as much $938,250, the agency said. A list of VA county loan limits has been posted on the agency’s web site. The VA does not have a maximum loan limit...

The Department of Veterans Affairs has liberalized the requirements for modification of VA-guaranteed loans and has provided servicers with more options to help veterans avoid foreclosure. Final rules published recently in the Federal Register show changes to requirements related to the calculation of interest rates on modified loans as well as foreclosure costs that may be rolled into the modified loan balance. The rules also give mortgage servicers the flexibility to modify VA loans without seeking prior approval from the VA, thus speeding up assistance to veteran borrowers facing...

While Congress debated the payroll tax cut extension, a tax provision allowing homeowners to deduct private mortgage insurance premiums from their annual federal tax bill quietly expired on Dec. 31. Consequently, mortgage loans with private MI that closed on or after Jan. 1, 2012, will no longer be able to use the deduction, unless Congress passes a bill that extends the deduction through next year retroactive to the beginning of 2012. It is a lapse that occurs almost every year, according to MI industry participants. Tax deductibility of MI premiums is part of a huge legislative package...

The Department of Housing and Urban Development has entered into a partnership agreement with the National Community Stabilization Trust to facilitate the implementation of a “first look” program that will give preference to certain purchasers to acquire FHA real estate-owned properties. In a notice published in the Federal Register, HUD announced the issuance of a universal Name and Address Identification Number (NAID) to the NCST to assist eligible buyers in purchasing REO properties under the National Stabilization Program’s “First Look Sales Method.” The NAID requirement for purchasers is...

The FHA has extended for one more year a temporary waiver of a regulation prohibiting property flipping in order to facilitate faster sale of its bulging real estate-owned inventory. The agency hopes that having the waiver in place until Dec. 31 will stimulate the rehabilitation of foreclosed and abandoned homes for another year, including properties being resold within 90 days of acquisition. The waiver is not limited to the resale of foreclosed properties. “Property flipping” occurs when a property acquired at a discounted price is resold for a considerable profit with an...