Fannie Mae and Freddie Mac late this year will raise guaranty fees on single-family mortgages by another 10 basis points, under a directive that the government-sponsored enterprises’ conservator announced late last week. The g-fee increases will be effective on Dec. 1, 2012, for loans exchanged for mortgage-backed securities, and on Nov. 1, 2012, for loans sold for cash. According to FHFA Acting Director Edward DeMarco, who telegraphed the move in a notification to Congress earlier this summer, the g-fee increases are designed...

The initial progress report released last week on the national mortgage settlement drew attention to the early loss mitigation completed by the five banks participating in the settlement. However, Joseph Smith, the monitor of the $25.0 billion settlement, has also stressed that he is looking for noncompliance with the settlement’s 304 servicing standards. The Office of Mortgage Settlement Oversight allows borrowers and professionals assisting homeowners to detail experiences with servicers participating in the settlement. “It’s important for people in the marketplace to let me know if they see conduct that they think violates the settlement agreement,” Smith said. Smith said he has received...

The five big banks that are parties to the $25 billion national mortgage servicing settlement have granted more than $10 billion in consumer relief to borrowers – more than 80 percent of which took the form of short sales – between March 1 and June 30, 2012, according to a progress report from the Office of Mortgage Settlement Oversight. “Overall, 137,846 borrowers received some type of consumer relief during this period totaling $10.56 billion, which, on average, represents about $76,615 per borrower,”...

The blowback over yield-spread premiums and subprime mortgages continued in Lee v. Countrywide Home Loans, Inc., in which the U.S. Court of Appeals for the Sixth Circuit has determined that a lender – in this case, Countrywide Home Loans, and by extension, parent Bank of America – may be liable under state common law claims of civil conspiracy for failing to disclose fees paid to a mortgage broker. This subprime mortgage case was brought by the borrowers (the Lees) against the lender (Countrywide), its parent company (Bank of...

The Department of Housing and Urban Development appears to have lost a round in its fight to bring an alleged FHA defrauder to justice. HUD suffered a setback recently after U.S. District Judge Gray Miller in Houston granted declaratory relief to Allied Home Mortgage Corp. (AHMC) to challenge HUD’s suspension of the lender’s authority to originate and underwrite FHA-insured loans. The Houston-based lender contends that HUD acted capriciously and arbitrarily without due process of law. It based these claims on ...

The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

The Department of Housing and Urban Development said it will step up its oversight of the department’s loan quality review to ensure that weaknesses, such as those uncovered in a recent internal audit, will not happen again. An audit performed by the agency’s Office of the Inspector General concluded that HUD’s Quality Assurance Division had adequate oversight of lenders’ compliance with FHA underwriting standards but for two loans that apparently eluded reviewers. QAD reviewers are required to ...

Industry trade groups last week gave the Department of Housing and Urban Development another nudge to lift the moratorium on investor participation in the FHA 203(k) property rehabilitation program. Following up on an industry request in June, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders in a joint letter to HUD reiterated the importance of the 203(k) program in reducing the current real estate-owned (REO) inventory and addressing the oversupply of housing. The groups said the program ...

Liquidity requirements apply only to the required minimum net worth of FHA-approved lenders and mortgagees, not to their total net worth, according to a final rule issued recently by the Department of Housing and Urban Development. The rule clarifies language in FHA regulations, which has caused some confusion and anxiety among approved lenders, lawyers and other regulators, said HUD. HUD made clear that the rule simply requires FHA lenders to ...

The Department of Housing and Urban Development has issued new rules for qualifying borrowers who list Social Security income on their application for an FHA-insured mortgage loan.The number of FHA borrowers with verified Social Security income is unknown because HUD does not track borrowers’ source of income, according to a department spokesperson. But industry observers said the number may not be significant. Nonetheless, lenders would need to request several important documents from borrowers who would rely on SS income to qualify for an FHA home loan, the new rules state. These documents include ...