Finding itself in one of the largest mortgage fraud cases ever prosecuted by the federal government, the Department of Housing and Urban Development may have a hard time explaining why it failed to act earlier against a lender that scammed the FHA for nearly a decade. It appears HUD, notwithstanding its assertions of increased vigilance and aggressive enforcement against violators of department regulations, dropped the ball on Allied Home Mortgage Corp. According to a lawsuit filed by the U.S. Attorney in Manhattan district court this week, Allied, an FHA loan correspondent, and its two top executives engaged in ...

FHA originations dropped while the rest of the mortgage market, powered by a new wave of refinancing, posted gains during the third quarter, according to an Inside FHA Lending analysis of agency originations data. FHA lenders reported an estimated $145.7 billion in direct endorsements in the third quarter, down 3.7 percent from the previous quarter. This was in stark contrast to VA loan production, which was up an impressive 31.0 percent to $20.7 billion, and new single-family securitization by Fannie Mae and Freddie Mac, which rose 14.4 percent to $177.2 billion over the same period. Even the private mortgage insurance sector, FHA’s direct competitor, outdid ... [Includes one data chart]

Home Equity Conversion Mortgage lenders may now use certain financial assessment criteria in qualifying consumers for a HECM loan prior to FHA’s publication of its own guidance. Officials from the Department of Housing and Urban Development broke the news during the recent National Reverse Mortgage Lenders Association annual conference in Boston. They said the new underwriting assessment tool would help ensure borrowers can pay required taxes and insurance on their homes. The notification followed the unveiling of the NRMLA’s recommended underwriting guidance. In a previous email notice to industry participants, Acting Assistant Secretary of Housing/FHA Commissioner Carol Galante indicated that ...

Even though the home-purchase mortgage market remains on life support, this important sector of the mortgage industry got a little bit of good news in September – namely, that the share of home purchases involving all cash transactions actually dipped to the lowest level seen in 2011. According to the results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, cash transactions accounted for 29.5 percent of home-purchase transactions tracked in September. While that still represented the most popular method for purchasing a home in the U.S., it was...(Includes one data graph)

Wells Fargo accounted for a whopping 26.1 percent of home mortgages originated during the third quarter, and when you throw in the production numbers for other kingpins in the industry it’s hard to see how small lenders survive. But beneath the gaudy market shares of the Wells Fargos and JPMorgan Chases of the world stand hundreds of small originators – mortgage brokers, community banks, credit unions and old-school independent mortgage bankers – that feed them a significant amount of business. The key to finding success under the shadow of the industry giants is developing a speciality, usually coupled with an obsession for...

Home mortgage production volume increased by 20.4 percent during the third quarter of 2011 as record-low mortgage interest rates sparked a new wave of refinancing activity. An estimated $325.0 billion in new residential mortgages were originated during the third quarter, according to a new Inside Mortgage Finance ranking and analysis. While that was up solidly from the previous three-month period, it still ranked as the second lowest quarter since the mortgage market collapsed at the end of 2008. Through the nine-month mark in 2011, total production for the year was still down 16.7 percent from...(Includes two data charts)

The Supreme Court of the United States will settle a multi-district circuit court conflict that will likely determine the ability of the mortgage lending industry to determine on its own what to charge borrowers at the point of origination. In deciding earlier this month to accept Freeman v. Quicken Loans Inc., the high court will confront the question of whether a plaintiff must demonstrate an unearned fee for a real estate settlement service was divided between two or more persons in order to establish that a violation of Section 8(b) of the Real Estate Settlement Procedures Act occurred.

The Consumer Financial Protection Bureau last week began testing a revised design of its integrated consumer mortgage disclosure prototypes with consumers and industry in the Albuquerque, NM, area, the agency revealed. The latest pair, dubbed “Pinyon” and “Yucca,” represent a fixed‐rate and an adjustable‐rate mortgage, respectively. Both forms include sections on loan terms, projected payments, closing costs, calculating settlement costs, calculating cash to close, comparisons, other considerations and verify receipt. But the Yucca version adds an adjustable interest rate table.

Several large banks and mortgage companies are accused of cheating military veterans and taxpayers out of millions of dollars by hiding illegal fees in VA refinance transactions and of deliberately misleading the government to obtain guarantees for the refinanced loans. Three law firms – Butler Wooten & Fryhofer and Wilbanks & Bridges in Atlanta and Phillips & Cohen in Washington, D.C. – have teamed up to pursue the “qui tam” or whistleblower lawsuit on behalf of two mortgage brokers and the U.S. government. The brokers, Victor Bibby and Brian Donnelly, brought the lawsuit under the False Claims Act, a federal law that goes back to the Civil War when it was used to ...