A glitch in the federal government’s Servicemembers Civil Relief Act website that had been churning out false verifications of soldiers’ active-duty status has been fixed, the Defense Manpower Data Center of the Department of Defense has announced.The bug responsible for the false negative results was removed after rendering the website inoperable for several days. The DMDC is urging active servicemembers to re-run their SCRA certificate requests if they have reason to doubt any negative results returned by the website. The DMDC shut down the website temporarily on Oct. 4 making it impossible for mortgage lenders to verify their or their vendor-partners’ compliance with the SCRA. The statute provides certain protections from civil actions against servicemembers who are called to active duty. It restricts or limits actions against active-duty military personnel in areas such as mortgages, rental and lease agreements, credit-card interest rates, tax liability, lawsuits and other debt obligations. The SCRA certificate provides information only for the purpose of verifying an individual’s active-duty status for a given time period to ...

One of the key documents VA lenders require veteran borrowers to submit is the certificate of eligibility (COE). A VA loan application will not move forward without a COE, a requirement for any active-duty servicemember or veteran seeking to take advantage of the VA’s home-loan guaranty program. The COE verifies to the lender a loan applicant’s eligibility for a VA loan. The evidence a lender might require depends on the nature of the applicant’s eligibility. Veterans and current or former National Guardsmen or reservists who have been called to active duty must submit DD Form 214. The form would show the character of service and the reason for separation from the service. Active-duty servicemembers must submit a current statement of service signed by a superior, the unit commander or the adjutant, higher headquarters or the personnel office. The statement must contain the ...

The Department of Veterans Affairs is reminding servicers that it does not issue “no-amount-specified bids,” commonly known as VA “no-bids,” on pending loan terminations. A regulatory change in 2008 allowed VA only two bid types: net value bid and total debt bid. Prior to the change, when VA issued a no bid, servicers were barred from conveying the property to VA following a completed termination action. A allows servicers the option to convey property to VA on loans that have been terminated through foreclosure or deed-in-lieu of foreclosure. The option to convey reduces additional mortgage-industry expenses associated with missed foreclosure sales, maintenance and marketing of properties that could not be conveyed, the VA explained. Other servicer news from the VA Loan Electronic Reporting Interface (VALERI): Oregon Appraisals. Effective Sept. 1, 2016, all Oregon liquidation ...

Mortgage credit availability increased in September as more investors offered streamlined refinancing programs to borrowers with FHA and U.S. Department of Agriculture rural housing loans, according to the Mortgage Bankers Association’s mortgage credit-availability index (MCAI) report. The government MCAI, one of four component indices of the trade group’s MCAI, saw the greatest increase in availability over the month (up 1.9 percent). Conventional MCAI also was up 0.7 percent and so was the conforming MCAI by the same percentage. The jumbo MCAI rose by 0.6 percent. The increases reflected an improvement in the MCAI, which grew 1.4 percent to 167.0 in September. A drop in the MCAI indicates a tightening of lending standards, while an increase suggests loosening of credit, the MBA said. “Streamline [refinancing] programs allow borrowers who have been consistently making their ...

VA Special Relief Following Hurricane Matthew. VA encourages holders of guaranteed loans to extend forbearance to borrowers in areas that were ravaged by Hurricane Matthew. Careful counseling with borrowers is recommended to help determine whether their difficulties are related to the hurricane or to some other cause that needs to be addressed. Lenders may reapply prepayments to cure or prevent a loan default, or modify the terms of an existing guaranteed loan without the prior approval of VA, provided certain regulatory conditions are met. In addition, VA has requested lienholders institute a 90-day freeze on all new foreclosures on loans affected by Hurricane Matthew. Lienholders must review all foreclosure referrals to ensure that servicers are justified in delaying foreclosure action. Further, the VA asked servicers to waive late charges and to suspend credit bureau reporting on ...

Nonbank mortgage servicers expanded their footprint in agency mortgage servicing rights during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Overall, there were $6.062 trillion of single-family mortgages outstanding tied to Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities at the end of September. (The table below excludes two significant categories: loans subserviced on behalf of the agencies and some seasoned loans for which no servicer is disclosed. This mostly affects the Fannie data.) The September figure was...[Includes three data tables]

According to investment bankers, there continues to be plenty of talk about mergers and acquisitions in the mortgage industry, but deals just aren’t getting done for the simple reason that the primary targets – midsized nonbanks – are posting strong profits and want top dollar for their franchises. “We’re still having conversations with potential buyers,” said Chuck Klein, managing partner with Mortgage Banking Solutions, Austin, TX. “But there continues to be a wide gap between the bid and the asking price.” Klein also noted...

A number of mortgage trade groups this week called upon the Consumer Financial Protection Bureau to extend its current “diagnostic” approach to enforcing the agency’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. The groups were responding to the CFPB’s request for public comments on its proposed TRID clarifying rulemaking, which was issued at the end of July. It’s...

Last week’s closely-watched appeals court ruling in the wrangling between PHH Mortgage and the Consumer Financial Protection Bureau over Section 8 of the Real Estate Settlement Procedures Act is being widely viewed by many as a clipping of the agency’s wings. But expectations about just how restrained the CFPB will be in enforcement actions going forward vary from compliance attorney to compliance attorney. Lawyers with the Stinson Leonard Street law firm pointed out that the director still holds all of the same enforcement power as before, despite the court’s conclusion that the bureau’s leadership structure, with a sole, independent director who can only be removed for cause, is unconstitutional. “For example, the CFPB administrative appeals process is...

A federal court ruling that the Consumer Financial Protection Bureau’s structure is unconstitutional raises questions that similarly-structured agencies such as the Federal Housing Finance Agency could also be challenged. A DC Circuit Court judge in the PHH Corp. v. Consumer Financial Protection Bureau case ruled that the CFPB’s single-director structure was not constitutional because it lacked a multi-member board of directors and its sole director cannot be fired without cause. In court, lawyers from the CFPB called...