The Department of Housing and Urban Development is looking into SunTrust Bank’s FHA-related lending practices, the bank reported in its latest regulatory filing. SunTrust, Atlanta’s largest bank, disclosed the investigation in its second-quarter filing with the Securities and Exchange Commission but provided no additional details. HUD notified the bank of the probe on April 25. SunTrust said it is “cooperating with the investigation,” which is being conducted by HUD’s Office of the Inspector General. The bank did not respond to a request for comment and the IG office neither ...

The recent enactment of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 includes a number of changes to the Department of Veterans Affairs’ Loan Guaranty program, including reverting to the VA’s previous method of calculating maximum guaranty. The restoration of the previous method used to derive VA loan limits has resulted in the increase of some loan limits, according to guidance issued by the agency last week. While VA does not have a maximum loan amount, “county limits” must be used to calculate the maximum VA guaranty for a particular county. The maximum VA loan limit for 2012 in high-cost areas is ...

A proposed rule that would require a flat fee for originating a mortgage loan with a Department of Veterans Affairs guaranty could do borrowers and lenders more harm than good, warned a coalition of financial services providers. The proposal is part of an upcoming Consumer Financial Protection Bureau rulemaking to implement certain provisions under the Dodd-Frank Act relating to loan originator compensation. The rulemaking raises a number of technical drafting issues that could have unintended consequences, cautioned ...

The rising delinquency rates for FHA-insured mortgage loans could spell trouble down the road for the FHA as it struggles to shore up its dwindling loss reserves, according to a new Fitch Ratings analysis. But the chief economist for the Mortgage Bankers Association has a slightly different take on that issue. Fitch analyst Brian Bertsch said a growing gap between seriously delinquent (90-day past due) guaranteed and non-guaranteed loans could presage future losses that could prompt the FHA to restrict loss claims and force banks to buy back defaulted loans. This could be the scenario ...

VA Flunks ‘Plain Writing’ Test. The Department of Veterans Affairs got an “F” for not following the requirements of the Plain Writing Act, which directs federal agencies to take steps to ensure they are communicating clearly with businesses, consumers and stakeholders. The statute went into effect July 2011 and the Center for Plain Language, a nonprofit organization that grades government agencies on their efforts to comply with the Act, evaluated and graded 12 agencies for compliance. The center gave two grades – the first grade represents how well the agency followed the requirements of the act, and the second grade reflects ...

Most of the mortgage industry’s modest increase in origination volume during the second quarter came through lenders’ retail production programs, according to a new Inside Mortgage Finance ranking and analysis. Retail loan originations rose 9.2 percent to an estimated $250.0 billion during the second quarter, That represented a record 61.7 percent of the market’s total output for the period, the highest retail share since Inside Mortgage Finance began analyzing origination channel trends. Most of the top lenders reported increased retail production at a time when many – but certainly not all – were scaling down their wholesale operations. Total wholesale originations declined...[Includes four data charts]

A number of nonbanks have increased their correspondent originations recently with plans to take more market share as the big banks focus on retail lending. Redwood Trust, PennyMac Mortgage Investment Trust, Homeward Residential and others have all touted their recent correspondent efforts, both for agency mortgages and non-agency originations. Since 2010, Redwood has used its conduit platform to supply...

A mortgage marketing program with a money-back guarantee sounds too good to be true, but participating lenders that reported more than 400 percent return-on-investment can probably attest it is no scam. Mortgage Returns, a provider of customer relationship management and marketing solutions, reported that 35 lenders in its Guaranteed Marketing program averaged a 426 percent ROI after using it. The program revolves around the company’s Five-Touch mortgage refinance campaign. Launched in May, the program generated...

The cost to close on a mortgage has dropped seven percent to an average $3,754 in the past year, according to the eighth annual closing costs survey from Bankrate.com. Title insurance and other third-party fees fell 12 percent from last year’s levels, while origination fees dipped a slight one percent. “This is the second year in which lenders are required...

The Consumer Financial Protection Bureau has been feeling the heat over the size of its proposed rule to streamline and integrate the disclosures consumers get when taking out a home loan, so agency officials engaged in a little bit of push-back last week in an effort to fend off the criticism. The push-back started early in the week during a hearing of the House Small Business Committee, during which Rep. Scott Tipton, R-CO, took issue with the rulemaking’s size that exceeded 1,000 pages in draft form, a fraction of which is new...