Certain watchdog agencies of the federal government have expressed concern to Congress about whether additional steps already taken by the FHA and Ginnie Mae to improve their risk management are sufficient to avert potential government intervention. A recent study by the General Accountability Office and testimony by Department of Housing and Urban Development Inspector General David Montoya before a House panel have raised questions about the financial stability of the FHA and Ginnie Mae and their ability to respond to a major financial crisis. Both the GAO and Montoya concluded that the two agencies...

Two fair lending groups say 2011 data collected under the Home Mortgage Disclosure Act reveal that Citigroup, JPMorgan Chase, Wells Fargo and others continued making subprime mortgages last year in a way that had a disparate impact on minority borrowers. Fair Finance Watch said the raw data show that African American borrowers last year were 3.38 times more likely to get a so-called rate-spread loan (1.5 percentage points over Treasury yields) from Citigroup than white borrowers, worse than its 2.25 times disparity rate in 2009. Hispanic borrowers were 2.42 times more likely than whites to get a rate...

The Federal Housing Finance Agency should assume “a more active role” in its management of Fannie Mae and Freddie Mac and has not been sufficiently proactive in its enforcement and oversight of the two government-sponsored enterprises, according to the FHFA Inspector General. “FHFA’s role as conservator has evolved over time,” the IG said. At the outset of the conservatorships, FHFA forbade the enterprises from engaging in certain activities and retained approval authority over others,” said the OIG report. “Soon thereafter, FHFA delegated day-to-day operational decision making to the...

Private mortgage insurers are optimistic the industry will remain competitive and expect a boost in new business as a result of the FHA’s recent premium price adjustments, but things may change for better or for worse depending on how economic factors play out in 2012. Officials at Radian Guaranty and Mortgage Guaranty Insurance Corp. said 2012 may yet turn out be a good year despite pessimistic outlooks by rating agencies. MI executives point to the declining unemployment rate and loan defaults as positive signs. Radian sees the recent FHA pricing changes as an opportunity for the MI industry...

Consumer Financial Protection Bureau Director Richard Cordray last week indicated to members of Congress that the bureau is still working to clarify all the nuanced meanings of the term “abusive” as it relates to prohibited mortgage lending activities per the Dodd-Frank Wall Street Reform and Consumer Protection Act. Responding to a parsing of the definition of the word under questioning before the House Financial Services Committee, Cordray acknowledged some aspects of the Dodd-Frank Act’s abusive standard are “situational and somewhat subjective in nature,” such as ...

The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three “non-public” investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ...

The Consumer Financial Protection Bureau’s first semi-annual report to Congress suggests the mortgage lending industry has a lot of work to do if it’s going to satisfy disgruntled homeowners. The report included some updates on the CFPB’s consumer complaint system, including the finding that mortgage-related complaints represented the second largest category of consumer complaints, after credit cards. Between July 21 and Dec. 31, 2011, the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints...

In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ...

Iowa Attorney General Tom Miller, the lead official behind the recent $25 billion mortgage servicing settlement, told industry representatives last week that, unlike past agreements, the AGs are going to be sticklers for full and proper implementation this time around. Implementation “is a very, very important aspect to our effort currently and going forward,” Miller said to participants in a webinar sponsored by Inside Mortgage Finance, an affiliated publication. “We put just an awful lot into this investigation and negotiations, and we don’t want it to ...

Last week, the full House Financial Services Committee passed several pieces of legislation, including H.R. 2446, the RESPA Home Warranty Clarification Act of 2011, introduced by Rep. Judy Biggert, R-IL, which advanced with one amendment. The legislation amends the Real Estate Settlement Procedures Act of 1974 to state that no prohibited kickback or unearned fee incidental to a real estate settlement service involving a federally related mortgage loan shall be deemed to include, or be deemed to have included, homeowner warranties or similar residential service contracts for ...