Interest rates on fixed-rate mortgages have been at record lows since December 2011, but a considerable number of borrowers continue to choose adjustable-rate mortgages, according to a ranking and analysis by Inside Mortgage Finance. ARM originations rose 7.7 percent from the first to the second quarter of 2012, a slightly faster rate of increase than the overall market. Although ARM originations over the first half of the year were down 3.6 percent from the same period in 2011, ARMs still accounted for 10.3 percent of total loan production. Most ARMs are...[Includes one data chart]

The federal government thought that Bank of America went too far in documenting the income of a handful of borrowers with disabilities to make sure they could pay on their mortgages. That’s going to cost the lender an aggregate amount yet to be determined, as well as force the lender to change some of its underwriting practices, even though Bank of America insists it was following policy established by the Department of Housing and Urban Development. Bank of America reached an agreement with the Department of Justice last week that...

In another sign of just how anxious the mortgage lending community is about the Consumer Financial Protection Bureau’s pending ability-to-repay rulemaking, especially the aspects that deal with qualified mortgages, the leading industry trade groups again wrote to CFPB Director Richard Cordray late last week to reiterate their views and concerns. In particular, they said they wanted to express their continued strong support for a QM that meets three critical requirements, the first of which is that the QM “must be broadly...

Sixteen industry trade groups urged the Consumer Financial Protection Bureau to abandon a proposal to create a new, higher “all in” annual percentage rate calculation that would include additional fees and charges. The APR measure is one part of the CFPB’s massive proposed rule designed to streamline and harmonize mortgage disclosure requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act. The trade groups pointed out that the bureau’s own research indicates that consumers confuse the APR...

The Community Mortgage Banking Project, the Housing Policy Council of The Financial Services Roundtable, and the Mortgage Bankers Association recently expressed concern to the Consumer Financial Protection Bureau about some aspects of the agency’s proposed rulemaking on high-cost mortgages that would implement changes to the Home Ownership and Equity Protection Act as per the Dodd-Frank Act. The changes would establish new definitions of points and fees and prepayment penalties as well as new restrictions and requirements...

The Mortgage Bankers Association, the Leading Builders of America and the Real Estate Services Providers Council Inc. joined together to express “profound concern” to the Consumer Financial Protection Bureau regarding the agency’s proposed treatment of fees paid to affiliated settlement service providers under the Home Ownership and Equity Protection Act. “We strongly support a competitive mortgage market where builders and lenders large and small, as well as unaffiliated and affiliated third-party settlement providers...

Originations of non-agency jumbo mortgages through two quarters in 2012 were 35.8 percent above the pace set in 2011, according to affiliated publication Inside Mortgage Finance. Almost all of the major jumbo lenders are increasing production and the vast majority of originations continue to be held in portfolio. An estimated $37.0 billion in non-agency jumbos were originated during the second quarter of 2012, up 5.7 percent from the previous quarter and up 60.9 percent from the ... [Includes one data chart]

The government-sponsored enterprises’ guaranty fees will increase by an average of 10 basis points in the coming months as the Federal Housing Finance Agency works to align agency pricing with the private market. An increase earlier this year brought interest rates on agency mortgages slightly closer to the rates on non-agency jumbo mortgages but industry analysts suggest that the conforming loan limits have a greater impact on the market share for non-agency originations. “These increases will move [GSE] pricing ...

The reverse mortgage industry is at odds with consumer advocates and the Consumer Finance Protection Bureau over a recent CFPB study, which claimed that consumers find reverse mortgages too complex and difficult to understand and that the risk of fraud and other scams persist. The latest dispute flared as reverse mortgage lenders and consumer groups responded to the CFPB’s request for information on abusive financial practices that affect elderly Americans. The comment period ended on Aug. 31. To assist its ongoing study of reverse mortgage transactions, the CFPB in July sought ...

The Department of Housing and Urban Development’s disciplinary arm hit 14 FHA-approved lenders with civil money penalties totaling $2.31 million for various violations of FHA regulations. HUD’s Mortgagee Review Board imposed the fines as a result of separate administrative actions against the lenders from Aug. 1, 2011, to Dec. 31, 2011. The MRB report, which was published in the Sept. 10 Federal Register, cited various offenses, including improper lending practices, failure to follow FHA origination guidelines, fraudulent reporting, failure to remit mortgage insurance premiums, failure to report ...