An FHA Title II lender in Atlanta is in trouble with the Department of Housing and Urban Development’s inspector general for not implementing FHA’s Home Affordable Modification Program (HAMP) in accordance with HUD’s requirements. As a result, HUD paid more than $1.1 million for 138 loans that were not eligible for modification under the FHA-HAMP. The lender, Georgia Housing and Finance Authority, could be facing $1.42 million in indemnifications and reimbursements because of its actions. The state housing finance agency provides low- and moderate-income people safe and affordable rental housing, and acquires and maintains housing for homeownership. Proceeds from the sale of mortgage revenue bonds, as well as federal and state allocations, fund its housing programs. GHFA also uses bond proceeds to purchase mortgages, which are serviced by mortgage affiliate. The cash flow from the ..
The FHA has announced new streamlined procedures to help delinquent homeowners avoid foreclosure and stay in their homes. The agency is revising loss-mitigation procedures servicers use when evaluating and choosing the best home-retention options for delinquent borrowers by reducing waiting time for results. The new streamlined procedures are designed to enhance servicers’ ability to evaluate foreclosure-avoidance alternatives, especially for the FHA-Home Affordable Modification Program (FHA-HAMP). Specifically, FHA will require servicers to convert successful three-month trial modifications into permanent modifications within 60 days instead of the average four to six months. Borrowers who have three missed mortgage payments would be able to opt for a partial claim to bring their arrearages current versus the previous four-month minimum. In addition, the FHA will eliminate the ...
The Department of Housing and Urban Development has issued a final rule aimed at improving its single-family property disposition program and minimizing losses to the FHA Mutual Mortgage Insurance Fund. The rule consolidates and reorganizes agency regulations pertaining to asset disposition to better reflect industry standards and enable HUD to get the greatest value for its real estate-owned properties. The goal of the asset disposition program is to shrink HUD’s REO inventory and at the same time reduce MMIF losses. The final rule mostly mirrors the proposed rule HUD published for comment in October last year. The department said it has made no substantive changes to the proposed draft. The codified changes include limiting the provision of settlement-cost assistance to owner-occupants. The final rule eliminates HUD’s obligation to pay the broker’s sales commission and clarifies that settlement-cost assistance is only available to owner-occupant purchasers and not investor purchasers. In addition, the ...
African-American homeowners in New York City are seeking certification of a class action alleging that the government’s distressed-loan sale program discriminates against black homeowners. The suit alleges that black FHA homeowners in default are disproportionately affected by the Department of Housing and Urban Development’s note sale program and the subsequent “predatory” mortgage servicing. HUD Secretary Julian Castro, FHA Commissioner Ed Golding, Caliber Home Loans and U.S. Bank Trust were named defendants in the lawsuit filed in the U.S. District Court for the Eastern District of New York. The defendants’ business practices allegedly violated the plaintiffs’ due-process rights as well as the Fair Housing Act. Under the note sale program, delinquent FHA mortgages are pooled and auctioned off to the highest bidder. According to the plaintiffs, the bidders are usually private-equity firms or ...
The nation’s subservicers increased their base of contracts to $1.615 trillion in the second quarter, a modest 1.6 percent gain from the prior period, but a handsome 17.0 percent improvement from the same period a year earlier, according to survey figures compiled by Inside Mortgage Finance. Overall, these third-party processing vendors – who split the monthly fee with the actual owner of the servicing strip – control 15.9 percent of all residential mortgage debt in the nation. A year ago the reading was 14.0 percent. And it’s...[Includes one data table]
Rushmore Loan Management Services, Irvine, CA – a subservicing specialist – plans to enter the origination market early next month, a rarity for firms whose forte is processing loans for others. Company CEO Terry Smith told Inside Mortgage Finance that the nonbank’s direct-to-consumer arm is scheduled to begin funding loans on Sept. 1. “Our focus will be on originating loans – and servicing those loans,” Smith said. He also noted...
The Federal Communications Commission has refused an industry request to exempt mortgage servicing calls from prohibitions against the use of “robocalls,” or automated dialing and calling systems, to contact delinquent borrowers on their cell phones. In a long-awaited final rule limiting the way servicers can collect on student loans, mortgages and other debts owed to the federal government, the FCC said it would not make a decision on whether the statutory exemption from the Telephone Consumer Protection Act’s “prior express consent” requirements applies to Fannie Mae and Freddie Mac loans or their servicers. The TCPA and FCC regulations require...
Rising costs for mortgage servicing and more frequent transfers have become key issues for the industry, according to panelists at a seminar hosted by the Urban Institute and CoreLogic last week. Ed DeMarco, former acting director of the Federal Housing Finance Agency and now a senior fellow at the Milken Institute, said that mortgage servicing compensation has not changed in decades as the servicing industry itself has undergone what he called “profound changes.” He noted...
RSS