Wells Fargo will reportedly appeal a federal judge’s decision that a $25 billion agreement Wells and four other banks made with federal agencies and 49 state attorneys general last year to settle allegations of servicing malpractices does not make the banks immune to future claims under the False Claims Act. The Feb. 12 decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia said that the landmark settlement she had approved in April 2012 does not release the from future False Claims Act claims the government may bring. Dating back to the U.S. Civil War, the FCA provides for treble damages for fraud that results in ...

The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...

Wall Street has unveiled policy proposals calling for premium and guaranty fee adjustments and reduced loan limits for FHA and the government-sponsored enterprises to jump start the return of private capital to the U.S. housing market. The American Securitization Forum said the current level of government activity in the mortgage market is neither sustainable nor advisable. The government, through FHA, Fannie Mae and Freddie Mac, directly or indirectly guarantees 90 to 95 percent of new mortgage originations in the country, the trade association said. While everyone agrees the government’s role in housing should be reduced over the long term, there is ...

The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the department’s 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ...

The Department of Housing and Urban Development’s Office of the Inspector General has recommended that two lenders be reviewed for potential treble damages under the False Claims Act for allowing restrictive covenants to be recorded in regard to 864 FHA-insured loans in violation of FHA regulations. CTX Mortgage Co. of Dallas, TX, and Pulte Mortgage of Englewood, CO, could be on the hook for millions of dollars if HUD agrees to accept the OIG’s recommendations, which also include reimbursements and indemnification for paid and potential future claims. Both lenders maintained that ...

Congress Extends MI Tax Deductibility. Congress again extended legislation ensuring the tax deductibility of mortgage insurance on purchase and refinance loans through Dec. 31, 2013. Consequently, homeowners with adjusted household incomes of $109,000 or less can continue to claim the MI tax deduction on their federal tax return retroactive to Jan. 1, 2012. With a tax deduction, qualified borrowers may be able to ...

Genworth Financial reported improved first-quarter earnings, Mortgage Guaranty Insurance Co. made some progress on the litigation front while new entrant National Mortgage Insurance went through some highs and lows in the same week. It’s not every day a private MI gets to report a net profit, but Genworth’s U.S. mortgage operation posted $21 million in operating income during the first quarter, following a $32 million loss in the previous quarter. It was the first time in five years that the MI unit reported a profitable quarter. First-quarter results included a $4.5 million charge related to the settlement with the Consumer Financial Protection Bureau announced on April 4. Genworth’s MI losses were...

Look for Fannie Mae’s and Freddie Mac’s regulator to press forward with its policy proposal to develop a set of aligned standards for force-placed insurance, the head of the Federal Housing Finance Agency told lawmakers last week. Testifying before the Senate Banking, Housing and Urban Affairs Committee, FHFA Acting Director Edward DeMarco said the agency plans to pursue a “broader approach” to force-placed insurance. “Our goal is to establish a set of standards that could be adopted by a broader set of mortgage market participants, similar to what was done with the Servicing Alignment Initiative,” said DeMarco. “This broadened approach will also enable greater regulatory coordination in an effort to consider the various issues associated with lender-placed insurance.”

National MI, a new entrant in the private mortgage insurance market, began issuing its first commitments this month, although company officials acknowledge that a lot of the company’s operations are still being put together. In fact, building a new MI from scratch with state-of-the-art technology and no hangover from the housing collapse is one of National MI’s key advantages, officials said. “2013 is...

Private mortgage insurers provided coverage on some $8.2 billion of mortgages securitized by Fannie Mae and Freddie Mac during the first quarter of 2013 that had loan-to-value ratios exceeding 105 percent, according to a new Inside Mortgage Finance analysis of loan-level data. Private MIs had little choice in the matter since the Home Affordable Refinance Program allows underwater borrowers to refinance without getting additional MI, or any mortgage insurance if the original loan wasn’t insured. In fact, Fannie and Freddie securitized a total of $27.1 billion of mortgages with LTV ratios over 105 percent, most of which did not have insurance. But most private MI coverage was placed...[Includes one data chart]