Two Harbors Investment started acquiring residential properties to offer for rent during the first quarter of 2012, with officials at the real estate investment trust anticipating strong profits from the venture. The final step in establishing an infrastructure for the program was a February agreement with Silver Bay Property Management. “Silver Bay creates the opportunity to bring in institutional excellence to this sector, which heretofore has largely been ...

Mortgage servicers could find themselves in a quandary as they implement the national servicing standards outlined in the March foreclosure settlement agreement, especially if they run into conflicting FHA requirements. Compliance experts say that while many of the settlement standards could be carried out within the FHA program without being at odds with existing FHA requirements, conflicts do exist with the guidelines that cannot be resolved. Even when it is technically possible to comply with both FHA guidelines and the settlement standards, it is still going to ...

Ginnie Mae has announced new data disclosures effective Sept. 1, but investors say it is information they do not need. These include indicators identifying first-time homebuyers, type of third-party originator, and the upfront and annual mortgage insurance premiums. The new disclosures will provide greater transparency on the collateral that backs Ginnie Mae mortgage-backed securities, the agency explained in its latest guidance to program participants. The move also aligns Ginnie Mae’s data disclosures with the industry, it added. Issuers that are unable initially to provide the data will ...

The Department of Housing and Urban Development’s Office of the Inspector General will begin internal audits later in 2012 on various aspects of the FHA single-family mortgage insurance program and release results of some that were begun last year. In August, OIG auditors will begin review of the FHA TOTAL (Technology Open to All Lenders) Scorecard to determine whether the automated underwriting system approves loans that otherwise would not be approved under manual underwriting. Auditors will also check whether the scorecard could ...

Deutsche Bank and its mortgage subsidiary MortgageIT this week agreed to pay $202 million to settle civil claims that they engaged in a decade of misconduct and deception to qualify risky mortgage loans for FHA insurance. The civil fraud lawsuit was brought against the two companies by the Department of Justice as a result of a referral from the Department of Housing and Urban Development. Filed in May last year, the government lawsuit sought damages and civil penalties under the False Claims Act. The suit alleges that MortgageIT, which Deutsche Bank acquired in 2007, used its authority as a direct endorsement lender (DEL) to ...

The volume of commercial mortgages in special servicing has continued to decrease since its peak, with more loans getting transferred out than loans transferred in, thanks in great part to a large number of loan resolutions, says a new report on commercial MBS by Fitch Ratings. Special servicers decide whether to liquidate loans or modify them, with all active special servicers ultimately liquidating a larger proportion of loans than returning them to master servicing, according to the Fitch report. In total, 71 percent, or 4,160 loans, were liquidated while 1,672 were returned to master servicing. Of...

Fannie Mae announced this week it can change pricing and other terms under purchase agreements and mortgage-backed securities contracts with lenders should the GSE deem it necessary. According to the alert to servicers, Fannie is asserting its right to change pricing terms under standard purchase agreements, master agreements or mortgage securitization contracts. For any contracts and agreements entered into on or after May 1, Fannie said it reserves the right to change pricing “one or more times” during the term. Such changes may include the base guaranty fee, loan-level price adjustments and guaranty-fee adjustments on mortgages delivered under mortgage-backed securities contracts or as whole loans.

Small and medium-sized mortgage servicers want the Consumer Financial Protection Bureau to allow flexibility to accommodate different business models as the agency drafts new national servicing standards that are expected to increase costs. The CFPB rulemaking process is somewhat unique because the Dodd-Frank Act requires that it take small business interests into account as it develops new regulations. The agency recently convened a panel under the process required by the Small Business Regulatory Enforcement Fairness Act to weigh the impact of new servicing requirements on smaller lenders. “The panel agreed...

The Consumer Financial Protection Bureau has put together a second panel, as per the Small Business Regulatory Enforcement Fairness Act, tasked with giving the bureau input on the mortgage servicing rules proposal that the CFPB is working on under the Dodd-Frank Wall Street Reform and Consumer Protection Act. “The SBREFA requires the CFPB to convene a small business panel before rolling out regulations that the CFPB director expects to have a significant impact on a substantial number of small business entities,” explained Barbara Mishkin, of counsel in the consumer financial services group...

The four major banks reclassified $6.0 billion in home-equity loans to nonperforming status this month due to guidance from federal regulators. While the holdings have been seen as an impediment to loss mitigation efforts, the banks said the accounting change was essentially cosmetic. Bank of America classified $4.36 billion in HELs as nonperforming as of the end of the first quarter of 2012, up from $2.45 billion at the end of 2011. The increase was due to ...