As FHA tightens its underwriting further to give more room for private capital in the mortgage market, the federal single-family mortgage insurance program may no longer provide mortgage alternatives for as many “non-qualified residential mortgage” borrowers as it would have in the past, according to a new report issued by the Government Accountability Office. Analyzing the impact of the Dodd-Frank Act on homeowners and the mortgage market, the GAO report concludes that potential changes in the FHA’s role could influence ...

The Department of Housing and Urban Affairs’ Office of the Inspector General recommended that HUD obtain complete documentation to close Ginnie Mae contracts after an audit uncovered flawed procedures at the Office of the Chief Procurement Officer. The OIG called for tighter procedures after finding that the procurement office did not get documentation from Ginnie Mae to close out completed and expired Ginnie Mae contracts in a timely manner. That was a violation of HUD’s guidelines for contract closeout procedures, the internal watchdog unit said. In addition, Ginnie Mae did not follow department guidelines ...

A California mortgage lender that recently reached a settlement agreement with the Department of Housing and Urban Development over branch issues could land before HUD’s Mortgagee Review Board for branch-related loan quality issues. HUD’s Office of the Inspector General said an audit of Prospect Mortgage’s branches uncovered high default rates due to numerous violations of HUD underwriting and quality control requirements. The OIG recommended requiring Prospect to reimburse HUD $344,326 for ...

Some federally supervised depository institutions with FHA businesses are in danger of missing the July 29 deadline for registering with the Nationwide Mortgage Licensing System and Registry and could be sanctioned. The delay in registration is apparently due to confusion and uncertainty as to whether certain employees meet the definition of a “mortgage loan originator” (MLO) and should be registered as required by the Secure and Fair Enforcement for Mortgage Licensing Act, said compliance experts. The mortgage-related activities of such employees do not clearly meet the MLO definition and they include ...

The Federal Reserve fined Wells Fargo $85 million last week over high-pressure compensation policies in the firm’s finance company that allegedly led to steering of prime borrowers to more lucrative non-prime mortgages. The $85 million fine is the largest ever levied by the Federal Reserve in a consumer enforcement case. Wells has since shut down Wells Fargo Financial, its subprime subsidiary that was the focus of the Fed’s charges. CEO John Stump said in a statement the “alleged actions” were “committed by a relatively small group of team members.” The Fed said Wells Fargo Financial’s incentive compensation and sales quota programs fostered ... [includes one data chart]

The Consumer Financial Protection Bureau may have taken the field before its franchise quarterback has suited up, but that’s unlikely to slow agency examiners in making their appointed supervisory rounds. They’ve already introduced themselves to their largest bank charges and are fine-tuning their internal examination guidelines so that when they get the final authority to supervise non-banks, they will come calling without delay, according to industry presenters at the latest webinar sponsored by In-side Mortgage Finance. When the CFPB officially ...

Consumers could be setting themselves up for problems in the credit market if they are getting credit information about themselves that differs from what lenders are looking at, according to a new report released by the Consumer Financial Protection Bureau. In a report to Congress, the agency said it plans to study the variations between credit scores sold to lenders and those sold to consumers to shed light on potential harm to the consumer. “The most substantial harm would likely result if, after purchasing a score, a consumer has a different impression of his or her ...

Residential mortgage lending fell sharply in the second quarter, sinking to levels not seen since the depth of the financial market meltdown in late 2008. Lenders originated an estimated $265.0 billion in 1-4 family mortgages during the second quarter, down 18.5 percent from the first three months of the year. Production barely topped the $260.0 billion in mortgage originations posted in the fourth quarter of 2008, which was the lowest quarterly out-put since early 2000. Third-quarter production appears to be ... [includes two data charts]

Mortgage industry officials are pressing the Consumer Financial Protection Bureau to create a true legal safe harbor as it takes over a rulemaking project to implement ability-to-pay requirements enacted as part of the Dodd-Frank Act. Although the Federal Reserve drafted the proposed ability-to-pay rule, it did not take a firm stand on defining the legal protection lenders will get from originating “qualified mortgages.” Late last week, the project – which implements amendments to the Truth in Lending Act – was passed on to the CFPB. The Fed proposed rule contains ...

Thanks to low mortgage rates, the government share of the home purchase market rose in June, according to new numbers compiled from the Campbell/Inside Mortgage HousingPulse Tracking Survey. But the latest survey also highlighted several factors that are likely to put downward pressure on home prices in the balance of this year. Mortgage rates have been falling for the past several months, dipping to below 4.5 percent in June for 30-year fixed-rate mortgages financed through Fannie Mae, Freddie Mac and FHA, Inside Mortgage Finance’s weekly sampling of rates reveals. This has helped ... [contains one graph]