VA-approved lenders should not submit payments for loans closed on or after Oct. 1 until the impact of recent legislation passed by Congress and awaiting President Obama’s signature becomes clear, the Department of Veterans Affairs said in a recent notice. The legislation apparently provides higher funding fees for VA home loans, contrary to changes in funding fees announced by the VA in Circular 26-11-12 on Sept. 8. Lenders were advised not to act until further notice. If the President signs the legislation, it will, in effect, keep funding fees at their FY2011 rates through Nov. 17, 2011, the VA said. This means ...

In an ironic twist, six financial institutions with market shares below 2.0 percent showed increased originations of VA loans in the second quarter of 2011, while most of the top 25 VA lenders fared poorly. Total second quarter originations of the top VA lenders fell 19.5 percent to $9.67 billion, while volume for all VA lenders dropped 12.9 percent to $15.8 billion from the previous quarter. The top 25 lenders accounted for 61.2 percent of new VA loans made during the period. Despite their mixed performance, the top five VA lenders accounted for a hefty 40.4 percent of loans in the second quarter. Wells Fargo led ...

Wells Fargo and Bank of America continued to dominate the FHA market, accounting for 19.1 percent of total FHA originations in August, according to Inside FHA Lending’s analysis of agency data. Top-ranked Wells Fargo and second-place BofA accounted for $3.07 billion of the $16.06 billion in FHA-insured mortgages produced by approved lenders in August. The August volume was up 8.7 percent from July but down 34.0 percent on a year-over-year basis. In-house originations accounted for 70.9 percent of volume while home purchase loans made up 79.3 percent of loans made to borrowers during the month. An estimated 93.6 percent of loans insured by FHA were ...

Mortgage lenders originated a significantly higher share of new loan applications in 2010 than the year before, helping to offset a steep decline in consumer demand for mortgage credit, according to an Inside Mortgage Finance analysis of recently released Home Mortgage Disclosure Act data. The total volume of mortgage originations reported under HMDA fell 10.2 percent from 2009 to 2010, ending with $1.576 trillion. Although refinance transactions accounted for 67.1 percent of total HMDA originations last year, the refi market bore the brunt of the downturn, with the dollar volume of refinance production...(Includes one data chart)

Fair lending, along with unfair, deceptive and abusive acts and practices (UDAAP), will become increasingly significant and potentially more problematic for the mortgage lending community as regulators at the Consumer Financial Protection Bureau pay more attention to such issues going forward, a top consultant told industry representatives last week. “The keys for mortgage lending, from the enforcement side, are going to be fair lending – the Community Reinvestment Act and fair lending have become very entwined – and UDAAP,” said Jo Ann Barefoot, co-chair of Treliant Risk Advisors and former deputy comptroller of the currency, to attendees of a mortgage regulatory conference sponsored in the nation’s capital by SourceMedia.

Top lender groups are asking the Consumer Financial Protection Bureau to provide a little more clarification to its recent interim final regulation on alternative mortgage transactions, particularly when it comes to the definition of such a transaction. The American Bankers Association and the Mortgage Bankers Association both support the CFPB’s inclusion of renegotiable rate balloon and shared appreciation mortgages within the AMT definition. However, they both asked that some of the reg’s commentary be clarified to explicitly state that preferred rate loans with fixed rates and price level adjusted mortgages, otherwise considered “variable rate transactions,” also be identified as examples of alternative mortgage transactions.

Certain elements of the Dodd-Frank Act such as the new standard related to unfair, deceptive and abuse acts and practices (UDAAP), along with the Federal Reserve’s “ability to repay” provisions proposal, present “significant litigation risk” to lenders, a top litigation attorney told industry representatives early this week. Speaking to attendees at the Mortgage Bankers Association’s regulatory compliance conference in Washington, DC, on Sunday, Andrew Stutzman, a partner with Stradley, Ronon, Stevens & Young LLP, said, “I’m very troubled by Dodd-Frank in many respects. I think it … and the regulations that are coming out and have come out – the Fed’s ability-to-repay proposal – are extremely complicated and extremely confusing.”

Among the sensitivities associated with the mortgage industry’s foreclosure struggles, none is more fraught with headline risk and the potential for political pressure than foreclosing on an active-duty servicemember of the U.S. military, a top industry attorney told compliance officials this week. “It’s bad enough when you get it wrong on a regular foreclosure action, but when you get it wrong for one of our servicemembers, that’s really where you’re going to have a reputation killer,” Leah Getlan, assistant general counsel at Capital One, told attendees this week at the Mortgage Bankers Association’s annual regulatory compliance conference in the nation’s capital. “I have seen it from time to time, but thankfully, not that often.”

The Consumer Financial Protection Bureau may be making substantial progress on its integrated consumer mortgage disclosure form, but the land title sector is concerned the prototype products generated to date are inadequate when it comes to the disclosure of specific settlement costs. The American Land Title Association told the bureau that the CFPB’s Know Before You Owe project has successfully identified ways to improve the disclosure of loan costs by making them more transparent. However, suggestions for how to disclose some settlement costs, in particular title insurance and attorney fees, have not reached a desired level of transparency and lack the necessary flexibility to avoid consumer confusion.

With additional rulemaking still expected from the Consumer Financial Protection Bureau to flesh out some loan originator compensation provisions of the Dodd-Frank Act, state regulators are getting ready to release their own examination guidelines related to mortgage originator compensation for non-depository institutions, based on the Federal Reserve’s rule issued earlier this year. The Conference of State Bank Supervisors and the American Association of Residential Mort-gage Regulators have been working together since May drafting guidelines for implementation of the...