A proposed rule that would allow lenders in the federal Farm Credit System to participate in the FHA mortgage insurance programs is being closely scrutinized at the Department of Housing and Urban Development. The measure is one of several regulatory actions taken by HUD in response to President Obama’s directive in January calling for a government-wide review of rules and regulations. The review is aimed at weeding out rules that are outdated, unnecessary, excessively burdensome, and redundant or in conflict with other federal rules. Twenty rules, including the proposed FHA approval for FCS lenders, are now being streamlined or rewritten to ease the regulatory burdens of small businesses and spur economic growth. The proposed changes build ...

The Department of Housing and Urban Development is finalizing proposed guidelines streamlining reporting requirements for small FHA-approved lenders. Under the proposed guidelines, federally supervised, FHA-approved lenders with under $500 million in total assets would have alternative requirements for reporting their financial condition. FHA lenders are currently required to submit audited financial statements as a condition for FHA lender approval or renewal. In lieu of an audited financial statement, the proposed rule would require smaller supervised lenders to submit a copy of the unaudited regulatory report they provide ...

The Department of Housing and Urban Development is increasing its focus on tighter underwriting with actions against pregnancy discrimination in home mortgages. The department recently charged Mortgage Guaranty Insurance Corp., PNC Mortgage and others for allegedly refusing to provide mortgage insurance on a Pennsylvania loan unless the borrower returned to work from maternity leave. The FHA requires approved lenders to review a borrower’s income to determine his or her ability to repay the mortgage. However, lenders are prohibited from inquiring about future maternity leave. According to HUD’s complaint, MGIC notified ...

Wells Fargo, the biggest originator of Home Equity Conversion Mortgage loans, is exiting the reverse mortgage market after 20 years due to the unpredictability of property values. The departure of the San Francisco-based lender is another major blow to the wobbly HECM market already weakened by plummeting home prices. In February, Bank of America, the second largest HECM producer, announced it was quitting the reverse mortgage market to focus on other lines of business. The two institutions showed a combined ... [includes one data chart and one graph]

Even though the collapse in the mortgage market took down some bigger lenders structured as real estate investment trusts, the surviving REITs have emerged stronger and some are edging back into originations. Market capitalization for the sector has surged, from about $1.6 billion in 2000 to $36.1 billion (residential) as of May 31, 2011, according to a new report by analysts at Keefe Bruyette & Woods. But there have been some pretty big sinkholes along the way, with Thornburg Mortgage and New Century forced to shutter their operations. Their demise represented a combined loss of...

The Mortgage Bankers Association has asked the FHA to allow the use of electronic signatures on all FHA loan origination forms to help reduce fraud and other procedural issues in the home buying process. E-signatures are already acceptable under federal law and by the FHA under certain circumstances, the MBA noted in a letter to the Department of Housing and Urban Development. The use of e-signatures helps reduce the time required to close a mortgage loan, which may lead to...

Jumbo mortgage originations held up better than the overall market in early 2011, but more of the strength in the sector came from agency programs, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders originated an estimated $51.2 billion of new loans that exceeded the bench-mark $417,000 conforming loan limit during the first quarter of 2011. That was down 7.8 percent from the fourth quarter of last year, a much better showing than the 35.0 percent downturn in total mortgage originations during the same period. In fact, loans exceeding $417,000 accounted for...[includes two data charts]

Weichert Financial/Mortgage Access Corp., an agency/jumbo mortgage lender in 43 states, reached a settlement with the banking regulators of 10 states after a multi-state examination found numerous compliance and internal control deficiencies, including the use of an “interstate lending desk” to facilitate the origination or completion of mortgage applications by originators that were not licensed in the appropriate jurisdictions. “The multi-state mortgage examination program was initiated to enhance consumer protection, foster a culture of compliance within the industry, and hold...

Mortgage lenders have a number of questions about the two new prototype disclosure forms circulated for public comment recently by the Consumer Financial Protection Bureau, but none of the issues appears to be a deal-breaker...

Jumbo mortgages accounted for 7.7 percent of new loan originations in the first quarter of 2011, the highest share for the sector since 2008. A number of correspondent lenders have also expanded their jumbo programs in 2011. Some $25.0 billion in non-agency jumbos were originated in the first quarter of 2011, according to estimates by affiliated publication Inside Mortgage Finance. That was down 16.7 percent from the previous quarter, while overall originations declined by 35.0 percent during the period. The relative strength of the jumbo market increased...[Includes one data chart]