Mortgage servicers reported significant improvement in loan delinquency rates during the first quarter of 2012, although the inventory of foreclosed units remained at historically high levels. The overall delinquency rate dropped 100.3 basis points to 9.88 percent as of the end of March, according to the Inside Mortgage Finance Large Servicer Delinquency Index. That was the lowest level for the series in three years, and all 18 lenders included in the index reported lower delinquency rates than they had at the end of 2011. The biggest declines were in...(Includes two data charts)

Mortgage lending industry representatives are apprehensive about how the underlying economics of originating a mortgage are going to be affected by a proposal expected sometime this summer from the Consumer Financial Protection Bureau. Among the issues the CFPB indicated it will be considering is a requirement that consumers get a lower interest rate when they pay discount points. The bureau is also thinking about requiring lenders to offer consumers a no-discount-point loan option, as well as banning origination charges that vary with the size of the mortgage. The CFPB is also going to look...

Residential Capital’s filing for bankruptcy early this week signaled Ally Financial’s exit from the mortgage industry, and though the transfer of its servicing and origination platforms will not change the market in a meaningful way beyond industry rankings, the legal situation could offer a paradigm for other beleaguered mortgage units to follow. “It wasn’t a monstrous event,” said one industry observer. “It was an unfortunate event. Everyone knew they missed an interest payment, so it wasn’t much of a surprise.” ResCap includes both GMAC Mortgage, Ally’s mainstream mortgage banking operation, and what’s...

It will be long before the Department of Housing and Urban Development is done with its list of lenders targeted for indemnification, but a scarier prospect is having the U.S. Attorney’s Office doing the collection, according to compliance experts. The number of defendants seeking legal representation in FHA-related False Claims Act cases, in which the government has taken over from original whistleblowers, has grown. “If the work on our desks is any indication, HUD is way ahead in its enforcement of FHA origination rules and in seeking indemnification, which always increases during presidential....

A decline in Fannie Mae’s inventory of single-family real estate owned homes coupled with improved REO sale prices played a significant role in the company’s first free-and-clear profit since going into government conservatorship. Freddie Mac also reported improved REO disposition activity during the first quarter of 2012. Fannie said it acquired 47,700 single-family properties during the first quarter compared to 47,256 in the fourth quarter of 2011 and 53,549 in the first quarter of 2011. The government-sponsored enterprise disposed of 52,071 single-family REO during the first three months of 2012...

One of the newly filed Senate bills to advance the White House’s election-year refinance initiatives would pay for itself by extending the decade-long hike in loan guarantee fees for “just one more year” through 2022, according to the bill’s Democrat sponsor. Last week, Sen. Diane Feinstein, D-CA, introduced the Expanding Refinancing Opportunities Act of 2012, to allow more homeowners the chance to refinance via FHA mortgage insurance. The bill is geared toward mortgages not already guaranteed by Fannie Mae, Freddie Mac or the FHA. Feinstein’s bill would create a $6 billion FHA fund to provide...

Industry trade groups are urging Congress to broaden borrower access to the Department of Veterans Affairs and Department of Agriculture housing programs, but advocates for a smaller government presence in the mortgage market are warning this is bad policy. In joint letters to the Senate banking and veterans affairs committees, the Mortgage Bankers Association, National Association of Home Builders and the National Association of Realtors sought support for legislation making adjustable-rate mortgages a permanent fixture in the VA Loan Guaranty Program. The three industry groups are also seeking legislation...

Mortgage originator compensation has moved clearly into the crosshairs of the Consumer Financial Protection Bureau as part of a broader proposed rule expected soon that will also address originator qualifications as well as the paying of discount points and fees. Senior CFPB officials briefed the press last week on their plans, which will be shared in greater detail sometime next week with a group of small businesses related to the mortgage lending industry per the Small Business Regulatory Enforcement Fairness Act. The act requires the bureau to convene a small business panel...

Three mortgage lending industry groups have challenged the position of the Consumer Financial Protection Bureau in a key Truth in Lending Act case by asserting that borrowers must file a lawsuit within three years of a mortgage loan’s signing in order to exercise their right of rescission. As far as the industry is concerned, the crux of the dispute in Rosenfield v. HSBC Bank, No. 10-1442, currently before the 10th District Court of Appeals, is whether borrowers who notify lenders of their intent to rescind must also sue their lenders within three years. TILA gives certain...

The Consumer Financial Protection Bureau has sided with borrowers in an appeals case being brought under the Fair Debt Collection Practices Act, Birster v. American Home Mortgage Servicing, Inc., which is currently before the 11th Circuit Court of Appeals. The FDCPA prohibits debt collectors from using certain means to collect debts and from engaging in certain conduct in connection with the collection of a debt. In order for a plaintiff to successfully sue under the act, he or so must show two things: that the defendant is in fact a debt collector under the law, and the behavior...