The Department of Housing and Urban Development has suspended a former president of Lend America from doing any business with the agency following his admission that he engaged in a mortgage fraud scheme against the FHA in 2009. Michael Primeau, the former executive, had pled guilty to charges he directed employees of Lend America, a former FHA-approved lender, to divert mortgage funds intended to pay off borrowers’ first mortgages at refinance closings in order to pay company-operating expenses. Two years ago, HUD and the U.S. Attorney for the Eastern District of New York filed a civil complaint against Ideal Mortgage Bankers, doing business as Lend America, in federal district court. The complaint sought ...
The Senate voted this week to reinstate the higher conforming loan limit that expired at the end of September, heeding calls by the real estate and mortgage industries. On a vote of 60-38, lawmakers passed an amendment to the FY2012 funding bill, S. 1596, for the Department of Housing and Urban Development, which, among other things, would raise the maximum loan amount that can be guaranteed by FHA, Fannie Mae and Freddie Mac. Introduced by Sen. Robert Menendez, D-NJ, the amendment restores the 125 percent median home price formula used to calculate the temporary higher loan limits in effect prior to Oct. 1, which was up to $729,750 in certain high-cost areas of the country and lower in other jurisdictions. After Oct. 1, the new loan limit calculation was ...
The departure of MetLife Bank, a division of insurer MetLife Inc., from the mortgage business will leave a gap in the FHA market that should not be hard to fill. The bank recently announced its intention to sell its mortgage business due to uncertainty in the marketplace and the rising cost of compliance in an excessively burdensome regulatory environment. It is getting too difficult to compete and be profitable under these conditions, the bank said in a statement. MetLife Bank’s mortgage-related woes reflected on its FHA origination volume and market share, both of which have been shrinking over the last couple of quarters. MetLife ranked fourth among ...
Endorsements of Home Equity Conversion Mortgage loans during the first six months of 2011 rose 0.4 percent above the rate of endorsements from a year earlier but fell 20.2 percent on a quarterly basis, according to Inside FHA Lending’s analysis of HECM activity during the first six months of 2011. At the mid-year mark, HECM endorsements totaled $9.5 billion, with third-party originators sponsored by FHA-approved lenders accounting for 40.4 percent of all HECM originations. Non-FHA-approved mortgage brokers are no longer allowed to originate HECMs under a policy change last year aimed at reducing FHA losses and risks to the FHA Mutual Mortgage Insurance Fund. HECM endorsements totaled ... [includes two (2) data charts]
The U.S. Supreme Court recently agreed to review a dispute over closing fees in a move that may resolve a potentially entrenched circuit court conflict over the scope of the Real Estate Settlement Practices Act prohibition against unearned fees. At issue is RESPA Section 8(b), which provides that “[n]o person shall give and no person shall accept any portion, split or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.” As the U.S. government...
After negotiating with a potential buyer, Bank of America gave up trying to sell its correspondent business and will simply shut the program down by the end of the year, leaving a huge potential hole in the market. The rumored bidder, NationStar Mortgage, reportedly wanted a higher price than BofA was willing to pay to take the correspondent unit off the bank’s hands. “After a comprehensive review of market opportunities, Bank of America will close its correspondent lending channel by the end of 2011, following an orderly transition with clients,” the company said in a written statement. BofA, which had already...
A “who’s who” list of a number of the largest and most well-known mortgage lenders in the country – including Wells Fargo, Countrywide Home Loans, Bank of America, JPMorgan Chase, PNC Bank, GMAC Mortgage Corp., Citimortgage and Suntrust Mortgage – have been accused by two whistle-blower types of charging U.S. military veterans illegal fees to refinance their home mortgages. According to the accusations, made in a complaint unsealed in federal court in Atlanta late last week, the mortgage lending entities charged refinance fees that are prohibited by the Department of Veterans Affairs and hid the charges by padding or inflating other allowable charges so they could obtain government guarantees for the mortgages, all without telling the veterans.
The Justice Department and C&F Mortgage Corp. of Midlothian, VA, agreed to a settlement that resolves allegation of lending discrimination against African-American and Hispanic borrowers of home mortgages. According to the terms of the settlement, which is subject to court approval, C&F Mortgage will revise its pricing policies, conduct employee training and pay $140,000 to settle allegations that it engaged in a pattern or practice of discrimination on the basis of race and national…
Subprime lending remained subdued in 2010, according to newly released data from the Home Mortgage Disclosure Act. Higher-priced mortgages – the Federal Reserve’s revised proxy for subprime mortgages – accounted for 3.2 percent of the number of loans originated in 2010. Some $7.14 billion in higher-priced mortgages were sold in 2010, according to a new analysis by Inside Nonconforming Markets. Ginnie Mae continued to account for the largest portion of the sales at 35.0 percent in 2010, up from 21.1 percent the previous year. ... [Includes one data chart]
High-quality endorsements and lower-than-expected prepayment speeds have given a slight boost to the FHA Mutual Mortgage Insurance Fund in the second quarter of 2011 even as agency officials remained cautiously optimistic about the recent book of business. In its quarterly report, the Department of Housing and Urban Development said that the MMI fund’s total capital improved by $100 million to $31.7 billion from the previous quarter as revenues from premiums and property sales exceeded higher claims payments. Endorsements in the second quarter alone added $1.7 billion to the capital reserve account, which stood at $2.8 billion at the end of June, the report noted. The FHA capital reserve account, which absorbs ...
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