The FHA has issued guidance on acceptable timetables in every state for completing the foreclosure process as well as for other procedural changes for forward and reverse mortgages. FHA regulations require that, when foreclosure of a defaulted loan becomes necessary, mortgage servicers “must exercise due diligence” in carrying out the foreclosure and in acquiring title to and possession of the property. The updated reasonable-diligence time frames will take effect for all cases in which foreclosure is initiated on or after Jan. 1, 2016. The reasonable diligence period begins with the first legal action required by the jurisdiction to start foreclosure and ends upon the acquisition of a good marketable title and possession of the property. The FHA expects servicers to comply with all federal, state and local laws when prosecuting foreclosures and possessing properties backing ...
Government Files False Claims Act Suit Against FHA Lenders, “Counseling Fund.” Three federal agencies filed a civil lawsuit against a purported charitable “counseling fund” and five FHA-approved mortgage lenders and their principals for running a mortgage scam that resulted in a huge loss for the FHA. The suit alleges that Rainy Day Foundation, a tax-exempt charitable institution in the District of Columbia, and five New York-based banks defrauded several federally insured banks resulting in millions of dollars of mortgage losses and costing the FHA $5.6 million in paid false claims. According to the complaint, the lenders originated FHA loans, which they later sold to the victimized banks. The loans went into early-payment default (EPD) at twice the average default rate of other lenders. The lenders allegedly conspired with the Rainy Day foundation to conceal their ...
loanDepot’s initial public offering of stock – $100 million is the target capital raise – is viewed as a bullish sign for the mortgage industry, especially nonbanks, but don’t expect a long line of imitators, at least not yet. Advisor Joe Garrett, who runs Garrett, McAuley & Co., isn’t quite sure what to make of the recent IPO news, stating bluntly: “I’m sure it will get a lot of ‘wannabes’ hot and bothered.” Garrett noted...
In the past year and a half, banks have started holding an increasing share of conventional conforming mortgages in portfolio instead of securitizing them through the government-sponsored enterprises. Industry analysts suggest GSE guaranty fees are the reason. In the first half of 2015, 91.6 percent of the estimated $442 billion in originations of conventional conforming mortgages were included in mortgage-backed securities. In 2013, 97.0 percent of the estimated $1.17 trillion in conventional conforming originations were securitized, according to an Inside Mortgage Finance analysis. “Securitizing conforming mortgages in agency MBS has become...
Bank returns on mortgage activities turned sharply negative during the recession of 2007 through 2009 before rebounding and becoming consistently positive by early 2011.
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