Flagstar Banks recent $133 million settlement with the Department of Justice to resolve fraudulent FHA lending practices could increase lender overlays on the FHA product, resulting in fewer borrowers being able to qualify for an FHA-insured loan, according to analysts. The Flagstar settlement, which came in the wake of the $25 billion national settlement between servicers and state and federal agencies, exacerbates the situation for lenders that already have previous concerns about the severity of FHA fines, including treble damages, for violations of FHAs highly complex and technical rules, analysts said. Whatever relief FHA lenders may have drawn from the robo-signing settlement was ...
Failure by the five largest FHA mortgage servicers to establish effective controls and to comply with FHA foreclosure procedures resulted in improper servicing practices that may have exposed them to liability under the False Claims Act, the Department of Housing and Urban Developments Office of the Inspector General concluded in separate, recently released audits. The HUD-OIG audits of the top five FHA servicers Bank of America, Ally Financial, Wells Fargo, CitiMortgage and JPMorgan Chase revealed a variety of questionable foreclosure practices involving the use of foreclosure mills and robo-signing of sworn documents in thousands of foreclosures throughout the country. The audits were ...
Significant price cuts to the FHAs Streamline Refinance Program will not hurt the Mortgage Mutual Insurance Fund but will, in fact, benefit from the lower pricing in the long term, said Acting FHA Commissioner Carol Galante.Testifying last week before the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies, Galante said the pricing cuts to encourage streamline refinancing as well as upfront and annual mortgage insurance premium increases for forward and jumbo mortgages will generate an additional $1 billion this fiscal year and next, in addition to projections in the presidents FY2013 budget. According to Galante, the FY2013 budget proposal ...
The Department of Housing and Urban Development has issued new guidance allowing non-FHA mortgage loans to qualify for an FHA refinance loan if the lender or investor agrees to write off the unpaid principal balance of the original first-lien mortgage by at least 10 percent. The guidance expands last years enhancements to the FHA Short Refinance program, which allowed responsible homeowners with negative equity to refinance into a 30-year, fixed-rate FHA loan. It also extends the program until Dec. 31, 2014. Under the latest changes, underwater borrowers who may have been delinquent ...
A Federal Housing Finance Agency official said this week that the FHFA’s proposed overhaul of servicer compensation is an “integral part” of the agency’s plan for a post-GSE mortgage market. FHFA Special Advisor Mario Ugoletti told Inside The GSEs this week that the Finance Agency’s servicing compensation reform is “not dead or on the back burner” but the timing of the initiative's roll out remains “uncertain.”
The Federal Housing Finance Agency Office of Inspector General took the FHFA to task this week for what the OIG considers the agencys lax supervision of Freddie Macs relationship with its servicers. Specifically, the FHFA has not clearly defined its role regarding servicers, sufficiently coordinated with other federal banking agencies about risks and supervisory concerns with individual servicers, or timely addressed emerging risks presented by mortgage servicing contractors.
The mortgage servicer American Home Mortgage Servicing Inc. recently announced a name change to Homeward Residential, reflecting its entrance into the correspondent and warehouse lending market in October 2011. AHMS ranked 18th on a list of top mortgage servicers in 2011 compiled by affiliated publication Inside Mortgage Finance. The company serviced $69.02 billion in residential mortgages at the end of 2011, down 9.7 percent from the year before, with most of its business in non-agency mortgages. The company plans to complete its rebranding as Homeward Residential by the second quarter of 2012. The business...
Bank of America and JPMorgan Chase will once again receive servicer incentives for modifying loans after more than seven months during which these payments were withheld by the Treasury Department for unsatisfactory performance in the Home Affordable Modification Program. The two banks will also get all the withheld incentives as part of the multistate foreclosure settlement. In June 2011, Bank of America, JPMorgan and Wells Fargo were all called to the carpet by the Treasury for their HAMP performance following a 10-month audit of participating servicers. The main issue was timeliness while mods...
The Justice Department and some members of Congress are unconvinced the mortgage industry is up to the task of fairly making and servicing mortgages in a tough housing market. Thats motivating them to use all of the tools at their disposal and considering new ones to combat discrimination and other abusive behavior. In the coming year, we will continue our efforts to provide justice to those families who were harmed by discriminatory conduct during the mortgage boom and to hold lenders responsible for their actions, U.S. Assistant Attorney General Thomas Perez said in testimony before the Senate Judiciary...
The Federal Housing Finance Agency is not backing away from its plan to overhaul servicing compensation on government-sponsored enterprise mortgages, but an official has acknowledged that the change will come more slowly than first expected. FHFA Special Advisor Mario Ugoletti told attendees at the Mortgage Bankers Associations Mortgage Servicing Conference & Expo in Orlando two weeks ago that servicing compensation reform [is] not dead or on the back burner, contrary to the industrys hopeful expectations. Ugoletti said any revisions to servicing compensation practices ought to result in enhanced...