Department of Housing and Urban Development Secretary Ben Carson reiterated concerns raised previously by his deputies regarding certain lending trends that could potentially endanger FHA’s financial health. Testifying during a HUD oversight hearing in the House Financial Services Committee this week, Carson said the department is scrutinizing certain policies that may be causing or contributing to the growth of cash-out transactions, unusually high debt-to-income ratios, serious loan delinquencies and early payment defaults. Carson said maintaining the health of the FHA mortgage insurance fund is critical in maintaining the agency as a source of credit for first time, low- and moderate-income, and minority homebuyers. The share of cash-out among all of FHA’s refinance transactions has increased to 60 percent as of April 2018 from 45 percent a year ago, he said. Also during that ...
The mortgage banking industry is backing a legislative proposal that would limit the government’s use of the False Claims Act to pursue hefty damages against FHA lenders. In a recent letter to the bill’s co-sponsors, the Mortgage Bankers Association expressed its strong support for H.R. 5993, the Fixing Housing Access Act of 2018. The MBA noted that originating FHA-insured loans has become very risky in recent years largely due to the civil actions brought by the Department of Justice under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Fifty-four FCA and FIRREA cases against financial institutions have settled for billions of dollars between July 2011 and January 2018, according to data compiled by the Buckley Sandler law firm. Four cases are pending and one civil penalty award was reversed on appeal. Those lenders who were on the ...
Black Knight Financial Services, which currently collects all servicing data for VA, will no longer do the job after March 2019, according to the Department of Veterans Affairs. BKFS will stop providing the service when VA transitions to a new enhanced VALERI system. VA servicers currently use the VA Loan Electronic Reporting Interface system to upload servicing information. VALERI is undergoing a multi-phase restructuring for conversion to a fully automated system spanning loan application, origination and servicing. The enhanced servicing component of VALERI will be ready by late spring next year. As part of the transition, VA will ensure that all servicers are plugged into the new VALERI system before it becomes fully operational. VA’s transition plan covers all methods and procedures for reporting information to VALERI. These include use of a licensed servicing system or a proprietary in-house servicing system that automatically reports data to VALERI, or logging into the VALERI web portal to manually upload and enter data.
The nation’s 12th largest servicer of residential loans said other options include a “business combination” or maintaining its status as a standalone entity.
RSS