Lacking sufficient guidance, CitiMortgage improperly filed for 66 partial claims before completing loan modifications and reinstating the loans, according to the Department of Housing and Urban Development inspector general. The finding arose from an IG audit of CitiMortgage’s processing of partial claims under the FHA-Home Affordable Modification Program. The audit was based on the financial institution’s volume of partial claims among lenders in the St. Louis, MO, metropolitan area. FHA-HAMP is a loss mitigation option, which uses a partial insurance claim, combined or separate from a loan modification, to reinstate a mortgage. Under a partial claim, FHA reimburses a lender’s advance of funds on behalf of the borrower in order to reinstate a delinquent mortgage. The IG said CitiMortgage did not have adequate policies and procedures to ensure the FHA-HAMP partial claims, combined with ...

The Department of Veterans Affairs recently clarified policy regarding lender use of credits or interest rates to pay veterans’ costs in VA home loans. Under VA regulations, lenders may charge and a veteran may pay a flat fee not exceeding 1 percent of the loan amount. The VA allows the charge provided it is in lieu of all other charges related to the costs of origination not expressly specified and allowed in the regulations. However, the agency has learned that some lenders are charging veterans interest-rate premiums in exchange for temporarily subsidizing the borrower’s monthly payments. “More precisely, an interest-rate premium is imposed as a charge for a cash advance on a loan principal,” the VA explained. While the agency allows lenders to charge borrowers for allowable costs, which may be made through an interest-rate adjustment, it clearly prohibits charges for impermissible costs, like ...

Fannie Mae adjusted its automated underwriting services last summer to make more loans with higher debt-to-income ratios eligible for approval without lenders needing to provide compensating factors.

The regulatory relief bill recently passed by the Senate would reduce uncertainty for future ABS tied to Property Assessed Clean Energy financing programs, rating services said.

Housing-finance reform appears to be in the process of a slow death for 2018 partly because of the pending departure of key players, according to Bank of America Merrill Lynch analysts.

More Fannie Mae and Freddie Mac shareholders have initiated lawsuits against the government for the Treasury sweep of the mortgage giants’ profits.

Originations of jumbo mortgages declined across the three production channels in 2017, with retail posting the biggest decline, according to an Inside Nonconforming Markets analysis of survey responses to affiliated publication Inside Mortgage Finance. The survey respondents reported $234.21 billion in jumbo originations, down 18.0 percent from 2016, which represented about 79.4 percent of the total jumbo market. Among respondents, retail production ... [Includes one data chart]

Originations of interest-only mortgages declined for many of the major players in the sector in 2017, according to a new ranking and analysis by Inside Nonconforming Markets. The declines were well beyond the slowdown in the overall volume of originations seen during the year. Among the top 15 IO lenders, six had lower production volume in 2017, with annual declines ranging from 6.7 percent to 61.1 percent. According to estimates by ... [Includes one data chart]

The Senate last week approved a regulatory relief bill that would grant qualified mortgage status to certain loans held in portfolio by smaller banks even if the mortgages would otherwise be non-QMs. The portfolio QM provision also has support in the House, but it has prompted concerns from some industry analysts. Moody’s Investors Service noted that if the provision becomes law, small banks won’t have to meet certain documentation requirements included in the Consumer ...

Angel Oak Prime Bridge, a lender offering short-term financing for house flippers, hopes to increase originations this year by more than five times the volume it produced in 2017. AOPB had more than $130.0 million in originations in 2017, according to Robert Malcahy, a senior vice president at the lender. He said the originations were focused in the Southeast. “In 2018, we have an expanded footprint and product offering targeted volume over $700.0 million,” Malcahy said ...