Wells Fargo and the Department of Justice are reportedly at an impasse in their settlement talks in connection with a lawsuit accusing the bank of improper underwriting and false certification of certain FHA-insured loans. In an e-mailed statement to Inside FHA Lending, a bank spokesperson said Wells Fargo’s good faith effort to work with the federal government to resolve the complaint “has not yet resulted in a settlement.” Nonetheless, the bank “will move forward with presenting [its] case in support of [its] prudent and responsible FHA lending practices, which have produced high-quality FHA loans with delinquency rates that are half the industry average,” the spokesperson added. This week, citing an unidentified source, Bloomberg reported that lawyers for the government and the bank have told the presiding judge in the case that they ...
The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...
FHA Mutual Mortgage Insurance Fund ended fiscal 2014 in the black but was still far short of its statutory reserve requirement, prompting critics in Congress to renew their cries for FHA reform. An independent actuarial report sent to Congress this week showed that the MMI Fund now stands at $4.8 billion after a gain of nearly $6 billion over the last year. For the first time since 2009, the fund’s capital ratio also crossed into positive territory at 0.41 percent, up 52 basis points from the negative 0.11 percent posted in fiscal 2013. Overall, the economic value of the fund has risen by $21 billion over the last two years because of the aggressive steps the agency took to stabilize and strengthen the fund, the report said. Policy changes led to improved underwriting for single-family mortgages, increased mortgage insurance premiums, stronger loss mitigation policies and higher recoveries, it added. In addition, with ...
Bond investing giant PIMCO has made an investment in Citadel Servicing, a small but fast-growing nonprime lender that could wind up originating $400 million in non-agency residential loans next year. Industry officials confirmed the investment to Inside Nonconforming Markets, although neither company would comment. One source close to the transaction said PIMCO’s stake in Citadel is under 30 percent. The lender, which raised $200 million in seed money early last year, has been funding ...
Two years ago, Ross’ WL Ross & Co. sold its mortgage banking operation, Homeward Residential, to Ocwen for $750 million in cash and convertible preferred stock.
Mortgage originations increased in all the major product categories during the third quarter of 2014, although new adjustable-rate mortgage lending was down slightly. A new Inside Mortgage Finance analysis shows that conventional-conforming originations increased by 11.7 percent from the second quarter to the third. That was slightly faster than the 10.2 percent increase in jumbo production and the 10.1 percent rise in government-insured lending. The home-equity market showed...[Includes two data charts]
In regard to misrepresentations, relief will not be offered if it can be proved that a borrower was misled by the originator. And, of course, any mortgage subject to fraud must be bought back.
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