Private mortgage insurers may soon find themselves required to meet new eligibility standards if they want to continue doing business with the government-sponsored enterprises. In written testimony submitted to the Senate Committee on Banking, Housing and Urban Affairs, FHFA Acting Director Edward DeMarco said the FHFA intends to set new criteria for private MI companies in doing business with Fannie Mae and Freddie Mac. The revised private MI standards are among the agency’s priorities in 2013 and is part of the conservatorship strategic plan to ...

The Department of Housing and Urban Development’s Mortgagee Review Board slapped 157 FHA lenders during the first nine months of 2012 with various administrative actions, including more than $1.7 million in civil money penalties and indemnifications to HUD for paid and potential claim losses totaling $1.25 million. The MRB, which is HUD’s disciplinary arm, took action against the approved lenders from Jan. 1, 2012, to Sept. 30, 2012. According to a notice published in the April 11 Federal Register, the board withdrew the FHA approval of 130 lenders for failing to ...

Supervised small FHA lenders and mortgagees with less than $500 million in consolidated assets would enjoy some cost relief under a regulatory proposal that would exclude them from submitting audited financial statements. Instead, these institutions would only need to submit their unaudited financial regulatory reports, which include bank and credit union call reports, to fulfill their net worth reporting obligations with the Department of Housing and Urban Development. That is the same exclusion the federal banking agencies – the Federal Reserve Board, Federal Deposit Insurance Corp., and the National Credit Union Administration – give ...

The Department of Justice recently announced enforcement actions against a New York-based FHA lender and its owner/president for fraudulent certification of FHA-insured loans as well as two separate settlements with bank subsidiaries for alleged violations of the Servicemembers Civil Relief Act. In the first action, the U.S. Attorney for the Southern District of New York, the Department of Housing and Urban Development, and the HUD Office of the Inspector General jointly announced a civil mortgage fraud lawsuit against ...

Department of Housing and Urban Development Secretary Shaun Donovan this week reiterated his agency’s request for additional legislative authority to regulate the Home Equity Conversion Mortgage program by mortgagee letter so that much-needed changes can be implemented immediately. Rather than go through the tedious legislative process of amending HECM legislation to improve the program and reduce HECM losses, expanding HUD’s authority would enable the department to undertake immediate reforms, such as restricting lump sum payments, requiring financial assessments of HECM applicants and requiring borrowers to ...

The Department of Housing and Urban Development this week issued guidance that spells out procedures for demanding indemnification from lenders participating in the agency’s Lenders Insurance (LI) program for loans deemed ineligible for FHA insurance. The guidance (Mortgagee Letter 2013-10) implements regulation that HUD finalized in January 2012. Indemnification for defective LI loans became even more important for the FHA after an independent actuarial audit in November revealed a negative capital reserve ratio and that a taxpayer bailout seemed imminent. Compliance experts warned that, with the policy changes, the more than ...

“The policy mix is very much weighted on the side of not lending, or at least not underwriting anything but a prime loan,” according to Chris Whalen, an executive vice president and managing director at Carrington Investment Services. Whalen and others spoke last week at a panel hosted by the American Enterprise Institute. The industry analysts said actions by federal regulators are limiting issuance of non-agency mortgage-backed securities. Tom Zimmerman, a managing director at UBS, said ...

Performance on home-equity loans is improving, with industry participants optimistic about future performance. Bank and thrift holdings of HELs continue to decline, based on a new ranking and analysis from the Inside Mortgage Finance Bank Mortgage Database. Delinquencies on HELs fell to 4.03 percent in the fourth quarter of 2012 from 4.20 percent the previous quarter, according to the American Bankers Association. “We saw the first inkling of improvement for that sector,” said ... [Includes one data chart]

The five servicers participating in the $25 billion national servicing settlement will face increased scrutiny due to complaints regarding their compliance with the settlement. In addition to requiring a certain amount of loss mitigation actions on non-agency loans, the settlement set standards to be followed by the servicers. Joseph Smith, the settlement’s monitor, said he is establishing additional metrics for the settlement to address complaints about actions by Ally Financial, Bank of America ...

California Capital Real Estate Advisers of Pasadena, CA, could quadruple its hard-money production volume this year, according to Mark Mozilo, a principal in the firm. “The rehab business is going crazy here,” Mozilo said. He estimated that 80 percent of CALCAP’s business is in the rehabilitation category. “There’s a lot of fix-it-up and flip it activity,” he said. Although the “quadruple” estimate sounds impressive, the firm’s overall production volume is tiny compared to conventional lenders ...