Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

The U.S. Department of Agriculture wants to begin charging lenders a fee on each guaranteed rural-housing home loan beginning Jan. 2, 2019, to fund future information-technology upgrades. In a notice published in the July 13 Federal Register, the agency said it expects to levy a $25 user fee for using the Rural Housing Service’s automated loan-guarantee systems. Comments are due Sept. 11, 2018The fee collection is authorized under the 2016 Housing Opportunity Through Modernization Act as a “technology fee” to improve program delivery and “reduce burden to the public.” The authorized fee can be up to $50 per loan. It will be collected at closing. The Department of Housing and Urban Development has been trying unsuccessfully to obtain authority from Congress to charge a similar fee to modernize its aging information technology. The USDA said it would notify lenders before the ...

The Mortgagee Review Board’s improvement of its processes and use of administrative actions has greatly eased its backlog of lender recertification cases, according to the Department of Housing and Urban Development’s internal watchdog. An audit by HUD’s inspector general found a vastly improved enforcement of MRB mandates and application of penalties to lenders compared to previous findings. An analysis of the board’s FY 2016 activities found, among other things, that 19 lenders with the same violation received the same penalty. The report attributed the change to the board’s decision to assign staff to implement recommendations in the IG’s evaluation report in May 2009. The 2009 audit raised concerns about the speed of the MRB process, the number of cases on which the board rules, and the magnitude of penalties it levies. The MRB rules on cases against FHA lenders where there ...

The U.S. Senate has delayed vote on the FY 2019 spending bill for the Department of Transportation and the Department of Housing and Urban Development as lawmakers worked through amendments to ease the way for a vote prior to the summer recess. As this publication went to press, Senate lawmakers were expected to vote on key appropriation legislation before the July 27 summer break. They are trying to figure out a way to get it wrapped up so they can go home, said an industry source. FY 2019 funding for FHA loan commitments under the Mutual Mortgage Insurance Fund remained unchanged at $400 billion as did appropriations for the FHA’s general and special risk account, $30 billion. Lawmakers agreed to increase Ginnie Mae’s funding to $550 billion for the fiscal year as requested by the Trump administration, and to return to FY 2018 levels the funding for salaries and other administrative ...

More than half of FHA-insured loans analyzed for material defects have been mitigated over a 12-month period, according to the Department of Housing and Urban Development’s latest quarterly loan-review analysis. Approximately 31,396 loans were analyzed over four quarters for possible defects, beginning in the third quarter of 2017 and ending the second quarter of 2018. Approximately 59.8 percent of the reviewed loans were initially deemed unacceptable. HUD data showed that most, 54.1 percent, of the loans reviewed have been successfully mitigated. The report provides a quarter-by-quarter snapshot of the FHA’s Loan Review System results. Net defects represent outcomes after lenders have implemented methods and techniques to mitigate or remediate the initial findings. Of the reviewed loans, 24.7 percent were conforming while 15.5 percent were found to be deficient. About 0.2 percent of loans were ...

The U.S. District Court for the Southern District of Iowa earlier this month granted preliminary approval of an $11.2 million settlement in a proposed class-action against national bank JPMorgan Chase. According to the complaint filed in 2016, Chase charged and collected interest on FHA-insured loans that paid off early. Chase was either the lender or the servicer of the loans. The lawsuit, Audino et al. v. JPMorgan Chase Bank, alleges that the bank breached the promissory notes underlying the class’s FHA-insured home loans when it collected post-payment interest without providing disclosures to borrowers who made a prepayment inquiry, request for payoff figures, or tender of prepayment. Plaintiffs allege that the bank did not use the proper FHA form to provide the disclosures to consumers. Chase denies any wrongdoing and neither admits nor concedes any actual or potential fault or liability. The bank also denies it was ...

House Votes on Bill Extending Flood Insurance Funding. The House of Representatives this week passed legislation extending the National Flood Insurance Program. On July 25, the House voted 366 to 52 to reauthorize the NFIP without amendments through Nov. 30, 2018. The extension is in a bill introduced by Majority Whip Steve Scalise, R-LA, and Rep. Tom MacArthur, R-NJ, last week. The House vote came days before the NFIP’s July 31 expiration date, guaranteeing flood insurance coverage for millions of homeowners through the end of this year’s hurricane season. Congress’ failure to pass a long-term extension measure for the program has led to six stop-gap extensions and two brief lapses in 2017 and 2018. A larger bipartisan legislative package to extend and enhance the NFIP is pending in the House. Introduced by Reps. Ed Royce, R-CA, and Earl Blumenauer, D-OR, H.R. 6402 consists of ...

The non-mortgage ABS market took a breather in the second quarter as new issuance fell modestly from the red-hot pace at the start of the year, according to a new Inside MBS & ABS analysis.

Federal regulators should separate capital standards for banks from accounting standards, according to the Structured Finance Industry Group. Such a maneuver would likely allow banks to issue risk-sharing transactions similar to deals in recent years from Fannie Mae and Freddie Mac.

Angel Oak Companies this week reported record non-QM originations of $512.0 million for the second quarter, giving it an annual run-rate of more than $2 billion – another bullish sign this fledgling sector will post stronger growth rates than conventional and government lenders in the quarters ahead.