The Department of Housing and Urban Development has requested its inspector general to reconsider certain recommendations intended to toughen safety standards for drinking water in FHA-insured properties. Other lenders or appraisers could interpret imposing stringent requirements on a few FHA lenders wrongly, which could lead to unnecessary water testing simply to avoid future litigation risk, HUD warned in its response to audit findings. HUD disagreed that administrative action is warranted. “Due to potential unintended consequences, [HUD Single Family] does not believe the imposition of sanctions at this time presents a viable alternative,” the department wrote. While making changes to water-safety standards, HUD said it will train lenders and appraisers to ensure compliance with the revised standards. The IG audit came in the wake of a previous audit, which found that ...
The Department of Housing and Urban Development is discontinuing its quarterly newsletter, Lender Insight, with the implementation of FHA’s Loan Review System. The change is aimed at improving both FHA’s and lenders’ quality-control and risk-management operations. HUD will be publishing a quarterly Loan Review Summary Report to provide a snapshot of the results of FHA’s quality-control review of mortgage originations over the preceding 12 months. According to HUD, the report will include only underwritten loans that were subject to a post-endorsement technical review. It does not include the results of lenders’ self-reports or any other loans that were reviewed as part of a lender examination, the agency said. The report will show the initial rating of all loans, the updated rating six months from the end of the review period, and a final rating. The “final” rating is subject to change as long as ...
The Department of Housing and Urban Development inspector general praised the agency for ensuring purchasers participating in HUD’s single-family note sales program complied with the terms in their purchase agreements. The inspector general noted, however, the need to improve the requirements in the purchase agreements. The IG found those requirements inadequate due to the lack of formal rules for the note sales program. “If a purchaser chose not to comply with its purchase agreement, HUD lacked assurance that the purchaser would offer homeowners foreclosure avoidance, loan-modification options, and other program requirements,” the IG’s audit report stated. Under the agreement, loan buyers must certify their avoidance of final closure for the required period of time, perform loan modification, and submit quarterly reports on their progress, including results of ...
Over the past week or so, at least two institutional investors have filed notice with the Securities and Exchange Commission that they no longer own large positions in PHH Corp., the publicly traded nonbank that’s trying to reinvent itself as a subservicing specialist. The two filers are investment banking powerhouse Morgan Stanley – which at one time owned 5.2 percent of PHH – and Hotchkis and Wiley Capital Management, whose stake totaled 8.8 percent. Today, Morgan’s position ...
Organizations representing different segments of the mortgage industry broadly support the Consumer Financial Protection Bureau’s plan to address the so-called black hole in the integrated disclosure rule under the Truth in Lending Act and Real Estate Settlement Procedures Act, or TRID. The black hole refers to situations in which a lender may not use a closing disclosure to reset fee tolerances. This causes closing delays due to fee changes that arise in the origination process ...
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