Bank of America is challenging new federal charges that it discriminated against loan applicants with disabilities, arguing that it applied conservative FHA underwriting standards in three cases covered by a lawsuit brought by the Department of Housing and Urban Development. HUD accused BofA of imposing unnecessary and burdensome requirements on borrowers who depended on disability income to qualify for their mortgages. The bank also allegedly required some disabled borrowers to provide physician statements to qualify for their mortgage financing. The charges are based on a HUD-initiated...

Despite historically low mortgage rates, tough underwriting standards and mortgage hassles are continuing to drive homebuyers towards all cash transactions in 2012. According to new numbers released this week from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, cash transactions accounted for a record-high 34.1 percent of home purchases tracked in January. That was up from 29.4 percent a year ago and just 22.8 percent in January of 2010, based on a three-month moving average. Importantly, the large share of home purchases funded with cash instead of mortgages highlights a serious problem...

There was agreement this week during a hearing of the Senate Banking, Housing and Urban Affairs Committee that recent efforts to expand the government’s refinance program are slowly having the desired effect, but the direction of refi policy to come remains an open dispute among officials. Department of Housing and Urban Development Secretary Shaun Donovan said the Obama administration is “encouraged thus far” by the 50,000 homeowners who have already refinanced their mortgages under HARP 2.0, the revamped Home Affordable Refinance Program. “These changes have met with a very positive response from homeowners....

The Department of Housing and Urban Development and Flagstar Bank have agreed on a structured payment scheme to ease the financial impact of a $133 million settlement of a lawsuit alleging fraudulent mortgage lending practices and improper approval of FHA home loans. The settlement occurred on the same day the civil fraud lawsuit was filed under the False Claims Act by the U.S. Attorney for the Southern District of New York. The suit alleged that Flagstar, the ninth largest lender in 2011, issued false certifications that the loans met all FHA requirements for insurance even though the due diligence...

Fannie Mae and Freddie Mac buyback demands on Countrywide mortgages were more than double the amount sought on any other lender, but the key reason is that Countrywide securitized a lot more loans than anyone else from 2006 through 2008. A new Inside Mortgage Finance analysis of representation and warranties disclosures made by the two government-sponsored enterprises shows that some $16.22 billion of Countrywide mortgages were subject to buyback demands, both before and after the company was acquired by Bank of America in 2008. In a distant second place was Wells Fargo...(Includes one data chart)

Bank of America had already been dialing back its mortgage deliveries to Fannie Mae, along with declining overall production volume, before the company unexpectedly announced last week it has stopped sales to the government-sponsored enterprise altogether. But according to reports, a top Fannie official said the GSE acted first to end the relationship in frustrations with the bank’s delays in resolving repurchase issues. BofA said disputes over repurchases were one factor leading the bank to stop selling most single-family mortgages to Fannie, although the company also cited an inability to renegotiate...

The Department of Housing and Urban Development this week announced FHA insurance premium increases that will add an estimated $1 billion to the agency’s Mutual Mortgage Insurance Fund, which may be enough – along with hefty penalties on lenders – to stave off a government bailout. The annual and upfront premium increases for all forward mortgages are part of an effort to bolster the FHA’s capital reserves for unexpected losses and ease Congress’ fear of a taxpayer bailout of the FHA. The Obama administration’s proposed fiscal 2013 budget suggested that the MMI Fund could need a $668 million infusion this...

A Federal Home Loan Bank may base its calculation of tangible capital for an insurance company member on financial statements prepared using statutory accounting principles for purposes of applying regulatory limits to members’ access to advances, according to the Federal Housing Finance Agency. The FHFA’s regulatory interpretation, issued earlier this month, would permit the use of SAP-based financial statements under certain conditions if the Bank’s insurance company member does not otherwise prepare financial statements based on generally accepted accounting principles.

Many homeowners are still being moved to foreclosure while loan modifications are pending, a survey shows. A survey of 260 attorneys by the National Association of Consumer Advocates, the National Consumer Law Center and the National Association of Consumer Bankruptcy Attorneys found that at least 3,700 homeowners were placed in foreclosure last year while waiting for a loan modification. Moreover, more than 78 percent of respondents said they had homeowner clients who had had been placed in foreclosure in the last year because the servicer did not properly accept the homeowner payments...

Of the $25 billion in penalties agreed upon for the multistate servicing settlement, approximately $2.66 billion in cash is going to individual states to provide relief for funds lost through servicer wrongdoing, though states are spending their cash differently. Without the settlement terms, which have yet to be released, it is impossible to know the parameters for which the 49 states in the agreement and the federal government can use their money from Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial. Through announcements by public officials, however, a picture of...