The initial material defect rate on sampled FHA loans targeted for a post-endorsement technical review was down in the fourth quarter of 2016 from the previous quarter, according to the FHA’s latest quarterly loan review update. FHA’s Lending Insight reports the material defect rate prior to curing fell to 49 percent in 4Q16 from 53 percent in the previous quarter, based on an analysis of 5,267 sampled FHA loans endorsed between Oct. 1, 2016, and Dec. 31, 2016. Of the loans sampled, 75 percent were purchase-money mortgages; 10 percent were streamlined refinances; 7 percent rate and term refinances, and 8 percent, Home Equity Conversion Mortgage loans. Twenty percent of the sample, 1,081 loans, were conforming while 25 percent, or 1,313 loans, were found to be defective. About 13 percent of the loans were denied endorsement. On the other hand, approximately 41 percent of loans ...
The Trump White House has yet to fill key positions at the Department of Housing and Urban Development and agencies that fall under the HUD umbrella, including the FHA and Ginnie Mae. According to industry officials who claim to have some knowledge of the process, the administration is seriously considering Pam Patenaude to be the deputy HUD secretary. Patenaude is president of the J. Ronald Terwilliger Foundation for Housing America’s Families. She served as HUD assistant secretary for community, planning and development during the George W. Bush administration. Meanwhile, Michael Bright has been mentioned as a candidate to be the next president of Ginnie Mae. Bright currently serves as director, Center for Financial Markets at the Milken Institute. During his career he has worked for mortgage lender/servicer PennyMac, investment banking firm BlackRock and ...
Judgment Imposed on Former President and Founder of Loan Correspondent Firm. A federal court in Chicago ordered the former president and founder of MDR Mortgage of Palatine, IL, to pay more than $10 million to the Department of Housing and Urban Development for submitting false certifications on FHA loans. The HUD Inspector General Office and the Department of Justice withheld the identity of the former bank official, who was found liable under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act. The violations allegedly involved loans the FHA insured from 2006 through August 7, 2008, the period during which MDR submitted the allegedly false certifications. The DOJ identified 237 loans that MDR processed during the period in question. The loans defaulted and resulted in $3.4 million in claims paid by the FHA. In addition, MDR provided annual verifications to ...
According to President Jerry Selitto, the company used traditional LOs when it launched in 2016, but then switched gears “after we realized that’s not the model we wanted.”
For Wells, the bigger question might be: did its “account fabrication” scandal of 2016 (which is still reverberating at the company) affect its mortgage business?
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