Wells Fargo suffered a big legal setback after a federal judge denied its request to enforce a consent judgment under last year’s landmark $25 billion servicing settlement to prevent a New York lawsuit from proceeding. Judge Rosemary Collyer of the U.S. District Court for the District of Columbia rejected Wells Fargo’s argument that the new government suit filed in Manhattan district court was improper because it violated the consent judgment against Wells Fargo and flies in the face of the judgment’s “liability release” provision. Wells Fargo argued that the allegations in a civil mortgage fraud suit filed by ...

A modest decline in FHA endorsements of jumbo loans in the fourth quarter of 2012 could presage further declines this year, following the Department of Housing and Urban Development’s recent proposal to raise the downpayment requirement to 5 percent, from 3.5 percent, for loans above $625,500. The FHA already has raised its jumbo mortgage insurance premiums to 1.55 percent annually and increased the monthly premiums on new, non-jumbo FHA mortgages by 10 basis points. The agency retained the 3.5 percent downpayment for new forward mortgages below $625,500. The increased premiums are ... [2 charts]

Industry participants who track various FHA data, including Home Equity Conversion Mortgage loans and Neighborhood Watch compare ratios, may have noticed delays in their postings. For example, the latest available data for HECM originations was in September, the end of fiscal year 2012, and no updates have been posted since. David Stevens, president and chief executive officer of the Mortgage Bankers Association, also wondered why Neighborhood Watch was down. He suspected lack of funding. A Department of Housing and Urban Development spokesman explained that the FHA’s reporting timelines and procedures are undergoing ...

The Senate Banking, Housing and Urban Affairs will continue focusing on FHA solvency as part of its legislative agenda for the 113th Congress and has called a hearing next week to try to reach some bipartisan agreement on FHA reform. In a memorandum, Committee Chairman Tim Johnson, D-SD, said ensuring the health of the FHA Mutual Mortgage Insurance Fund is one of committee’s top priorities in sustaining and strengthening the nation’s economic recovery. Johnson said the committee will continue to conduct oversight on the condition of the FHA insurance fund and the role the FHA plays in the housing market as part of ...

The Department of Housing and Urban Development’s Office of the Inspector General has alerted the FHA of significant potential losses because a California-based direct endorsement lender allowed certain FHA-insured loans with prohibited restrictive covenants to be recorded. An OIG audit of 84 FHA-insured loans underwritten by Standard Pacific Mortgage of Irvine, CA, found 28 loans with unallowable restrictive covenants that were recorded in certain Florida and Arizona county registers. The loans were closed between Jan. 1, 2008, and Dec. 31, 2011, the OIG said. Of the 28 loans, 15 resulted in ...

NCOA Booklet Required Reading for HECM Borrowers. The National Council on Aging has announced the availability of the 2013 version of “Use Your Home to Stay at Home,”, the official reverse mortgage booklet approved by the Department of Housing and Urban Development. The booklet is designed to help older homeowners understands the pros and cons of a reverse mortgage. Federal law requires that all individuals who are considering a reverse mortgage go through pre-counseling by a HUD-approved counseling agency and receive a copy of the NCOA guide. The NCOA also offers other ...

The Federal Housing Finance Agency has tabled – for now – a plan being pushed by Fannie Mae to lower force-placed insurance rates by as much as 30 percent, bringing in a group of insurance firms that are not traditional players in the market, industry officials who were briefed on the matter said. These officials, speaking under the condition their names not be published, said Fannie Executive Vice President Terry Edwards was heavily pushing the plan, but in the end the FHFA decided to delay action and set up a study group to look into the matter further. The names of the insurers that Fannie was working with were not released.

Private mortgage insurers in 2012 posted their best year since the financial market collapse back in 2008 and suddenly – after being largely left as roadkill in the government’s bailout program – are attracting new capital. Private MIs reported $174.81 billion in total new insurance written in 2012, more than doubling the amount of business they did the year before, according to a new Inside Mortgage Finance ranking and analysis. With the FHA and VA programs growing at a more deliberate pace, it boosted the private MI share of the primary mortgage insurance market to 32.0 percent, up from 22.7 percent in 2011. A significant part of the private MI rebound came...[Includes three data charts]

PMI Mortgage Insurance Co. may be out of the mortgage insurance business, but its surviving MI subsidiary, CMG Mortgage Insurance Co., will continue providing MI to credit unions under new management beginning in 2014. Last week, Arch Capital Group, a Bermuda-based provider of insurance and reinsurance, announced an agreement to acquire CMG MI from PMI Mortgage Insurance, as well as the latter’s operating platform and related assets. PMI is currently in rehabilitation and has been under the receivership of the Arizona Department of Insurance since 2011 after failing to meet statutory capital requirements. The transaction will not only allow...

FHA Commissioner Carol Galante fended off attacks by Republicans on the House Financial Services Committee this week, saying that the actual performance of the FHA single-family program over the course of FY 2013 and steps the agency takes during this period will determine whether the agency will need more cash to pay claims. In her first congressional appearance since her Senate confirmation in late December, Galante tried to assure critics that the FHA may not have to borrow from the U.S. Treasury to boost its claims-paying ability if the proposed budget President Obama releases next month does not show a shortfall. In last year’s proposed 2012 budget, the president anticipated...