Most observers don’t think the Obama administration’s proposal to use the FHA program to refinance underwater non-agency mortgage borrowers stands much of a chance on Capitol Hill, but the Department of Housing and Urban Development is moving ahead with a change it can make on its own that’s designed to spur FHA refinance activity. Acting FHA Commissioner Carol Galante announced that the agency is changing its Neighborhood Watch system to exclude streamlined FHA refinance loans from lender performance scoring. A key feature of the online system is a comparison of each lender’s early default rate to the...

Congressional lawmakers, still smoldering over multi-million dollar bonuses paid to executives of taxpayer-subsidized Fannie Mae and Freddie Mac, are moving aggressively to cut compensation levels at the government-sponsored enterprises. Last week the Senate approved by voice vote an amendment to prohibit top GSE executives from receiving such bonuses while Fannie and Freddie remain in federal conservatorship. The two companies have received more than $182.0 billion in aid since the government takeover in September 2008. Sponsored by Sens. John McCain, R-AZ, and Jay Rockefeller, D-WV...

The House Financial Services Subcommittee on Insurance, Housing and Community Opportunity this week approved legislation calling for an emergency capital plan and an independent GAAP-based audit of the FHA insurance funds and programs. The FHA Emergency Fiscal Solvency Act would set minimum annual mortgage insurance premiums for the FHA and is aimed at shoring up the Mutual Mortgage Insurance Fund. Introduced by Subcommittee Chair Judy Biggert, R-IL, the bill was approved by voice vote. An amendment introduced by Rep. Scott Garrett, R-NJ, sparked a heated partisan debate, which will likely continue when...

Despite watching two long-time competitors shoved to the sidelines by eroding reserves, private mortgage insurers continued a slow rebound from near-irrelevance just two years ago, while crowning a new market leader for the first time since 1994. Exactly who the new industry leader isn’t clear. Most private mortgage insurers include Home Affordable Refinance Program loan originations in the new insurance written figures that they report to Inside Mortgage Finance. However, United Guaranty has declined to participate in our survey, and the numbers released by AIG, the MI’s...(Includes three data charts)

Federal Reserve.Federal Deposit Insurance Corp. Office of the Comptroller of the Currency.National Credit Union Administration. Guidance on Junior Liens Reissued. Federally regulated financial institutions have to monitor all credit quality indicators relevant for home loan borrowers, under guidance that was reissued by the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the National Credit Union ...

CitiMortgage is bailing out of its broker channel business. “After careful consideration, CitiMortgage has decided to transition away from our mortgage broker business and sharpen our focus on a customer-centric channel strategy,” Citi Public Affairs Director Mark Rodgers said in an email to the press last week. The move allows the company to focus its attention and efforts on its retail and correspondent channels, which have “the highest opportunity of increasing long-term engagement with our clients,” he said.Further, it allows CitiMortgage to invest its resources in ...

Illinois. State Attorney General Lisa Madigan filed a lawsuit in Cook County Circuit Court alleging that Nationwide Title Clearing, a Florida-based company that prepares documents for use in default servicing and foreclosure actions, filed faulty documents with Illinois county recorders. The lawsuit alleges a number of violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act. Madigan is asking the court to “require NTC to review and correct all documents it unlawfully created and recorded in Illinois, and pay back all ...

Six financial services trade associations presented the mortgage lending industry’s views to the Department of Housing and Urban Development regarding the agency’s proposed rule to implement a disparate-impact legal standard under the Fair Housing Act. One of their arguments was that HUD should postpone its rulemaking pending the United States Supreme Court’s disposition of Magner v. Gallagher (No. 10-1032). The primary issue in the case is whether the disparate-impact theory of discrimination applies under the Fair Housing Act or whether plaintiffs have to prove intentional ...

The Federal Housing Finance Agency might be backing away from its controversial suggestion to change mortgage servicer compensation from the current 25 basis points of outstanding principal balance to a flat fee of $10 per mortgage, per month for current loans, with no incremental fees other than existing incentive compensation for the servicing of non-performing mortgages. “Considering changes to the structure of mortgage servicing compensation is an important component of improving the operations of the future mortgage market,” an FHFA spokeswoman said. “We received useful input on ...

President Barack Obama last week launched the creation of a new Residential Mortgage Backed Securities Working Group to further investigate mortgage origination and servicing abuses. “Tonight, I’m asking my attorney general to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis,” the president said during his recent State of the Union address ...