Although Bank of America famously shut down its huge correspondent program last year, joining a trend already under way, only two thirds of home mortgages originated in 2011 were manufactured through “direct” channels by retail programs and mortgage brokers. Wells Fargo topped the ranking of direct mortgage originators with $209.8 billion in volume in 2011. That represented 15.5 percent of the industry’s total mortgage originations, significantly lower than the company’s 26.8 percent market share when correspondent production is included. Bank of America’s direct originations...(Includes two data charts)

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...

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 ...

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 ...

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 ...

The FHA’s total capital resources dipped slightly by $400 million in the last three months of 2011, but things could have been much worse had it not been for lower claims activity, according to the FHA’s quarterly report to Congress on Mutual Mortgage Insurance Fund programs. On balance, the report shows little change and nothing unexpected during the quarter, said industry participants. The much-anticipated changes will come after two FHA premium adjustments become effective on April 1 – an annual mortgage insurance premium increase of 10 basis points and a 75 bps hike in upfront premiums, they said. The upfront premium increase is expected to ...

The FHA would have more flexibility to adjust its insurance premiums and greater latitude to require lender indemnification under legislation approved by the House Financial Services Committee this week. The committee passed H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, by voice vote on March 27, sending the measure to the House floor for consideration later this year. The bill is slightly different from the initial draft the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity passed on Feb. 7, according to the bill’s author, Rep. Judy Biggert, R-IL. Under the bill, approved lenders may ...

Perceived inaccuracies in public discussions about the FHA’s health and the way the agency manages its business have prompted Acting FHA Commissioner Carol Galante to address the issues and answer critics. In a posting on the Department of Housing and Urban Development’s official blog this week, Galante said the FHA is “moving in the right direction” and that the Mutual Mortgage Insurance Fund is in a much better shape than it was in 2009. Critics have raised concerns about FHA’s solvency, citing the current level of capital reserves, which have fallen way below the ...

Despite the steps taken recently by the Department of Housing and Urban Development to shore up the FHA insurance fund, concerns remain as to whether such actions are enough to make up for FHA’s losses and restore the agency’s mandatory 2.0 percent capital reserve ratio in a timely manner, according to HUD’s top internal auditor. Testifying before the House Committee on Appropriations this week, HUD Inspector General David Montoya warned further actions might be necessary to ensure the stability of the FHA Mutual Mortgage Insurance Fund and reduce its risks. For example, FHA now uses credit scores to ...

A Texas-based mortgage lender that recently lost its approval to originate and underwrite FHA loans sued in state court to compel the Department of Housing and Urban Development to withdraw an announcement of the enforcement action. AmericanHomeKey filed the complaint in Dallas County Court to force the withdrawal of a March 23 HUD press release announcing the immediate and permanent revocation of the lender’s FHA authority to originate, underwrite and close new mortgages with FHA insurance. The lender said a premature announcement would ruin its relationship with investors and result in massive losses. The HUD Mortgagee Review Board announced ...