FHA-approved lenders that engage in aggressive marketing to borrowers with a history of foreclosure, particularly advertisements about the ease of obtaining an FHA-insured mortgage after foreclosure, could face potential sanctions and severe penalties, the FHA warned. In a letter to lenders, FHA Commissioner Carol Galante said there has been a proliferation of web-based and print ads conveying the message that almost any borrower can get a new FHA loan three years after ...
A recent revision to the Department of Housing and Urban Developments Office of the Inspector General Audit Guide has lifted a reporting burden for FHA investing mortgagees who are involved in servicing, according to Phillip Schulman, a top compliance expert and a partner at K&L Gates. Under the revised guide, an investing mortgagee or lender that purchases, sells or holds FHA-insured mortgages but cannot originate or fund FHA loans no longer needs to submit reports on internal controls and compliance, Schulman reported in a client alert. The new rule states that investing mortgagees are now required to ...
A federal appeals court has rebuffed the bid by American International Groups mortgage insurance unit to overturn a lower courts order to pay more than $45 million to SunTrust Banks for insured losses related to mortgage defaults. The Fourth Circuit Court of Appeals last week upheld a Virginia federal judges ruling that AIGs United Guaranty breached an insurance agreement by refusing to pay claims on 1,305 defaulted combo loans which is a first-lien loan with a smaller, second-lien piggyback loan. At issue were mortgage defaults that SunTrust claimed should have been covered under a ...
Genworth Financial Inc.s U.S. mortgage insurance segment continued to be a burden to its parent despite reporting a narrower operating loss of $34 million in the fourth quarter of 2012, compared to losses of $38 million in the prior quarter and $96 million in the prior year. Nonetheless, the reduced amount of losses during the period was good news to company executives who reported net income of $166 million, or 34 cents a share, during the period from $142 million, or 29 cents, a year earlier. Operating profit was $167 million, or 34 cents a share, up from ...
California and Texas took the honors for top FHA producers among states and other U.S. jurisdictions in 2012, with a combined $59.2 billion in new mortgage loans insured by the FHA. The combined output of the two states represented 25.5 percent of the $232.1 billion in new FHA originations reported by all 50 states, Puerto Rico, Guam, the U.S. Virgin Islands and the District of Columbia for the entire year. Total FHA production by state was up a modest 5.2 percent in the fourth quarter from the previous quarter and a hefty 21.9 percent from the prior year. California, which accounts for 25 percent of the U.S. housing market, reported ...
Lawmakers on Capitol Hill this week mulled over how to strengthen the shaky financial condition of the FHA single-family insurance fund and reduce the risk to taxpayers of another government bailout, while shrinking the agencys market footprint without disrupting the markets fragile recovery. Partisan differences were immediately on display, predictably, as Republicans slammed the agency while Democrats defended it. If the FHA was...
The Department of Housing and Urban Development this week announced the latest changes designed to bolster the solvency of the FHA and ease Congress fear of a potential taxpayer bailout. The announcement is in connection with additional reforms, which FHA Commissioner Carol Galante committed to in an agreement with Sen. Bob Corker, R-TN. In a deal that cleared the way to her confirmation as FHA chief, Galante promised to have the measures in place by the end of the month to better manage risk and strengthen the FHA Mutual Mortgage Insurance Fund. As expected, HUD is...
Mortgage bankers funded $232.69 billion worth of FHA loans in 2012, a 22 percent jump from the year prior, but the improvement pales in comparison to business gains experienced by Fannie Mae and Freddie Mac, according to exclusive loan-level data compiled by Inside FHA Lending. By comparison, Fannie grew its business by almost 46 percent last year with Freddie improving loan purchases from seller/servicers by 49 percent. Still, it was FHAs best quarterly showing ($64.03 billion) since the fourth quarter of 2010 when mortgage lenders originated $72.12 billion of product. And not surprisingly, consumers taking out FHA loans ... [2 charts]
Can a lender rely on an approval from the FHAs automated underwriting system in determining whether a mortgage loan is a qualified mortgage? Lawyers at BuckleySandler, a Washington, DC, law firm, indicated some uncertainty after poring over the Consumer Financial Protection Bureaus final ability-to-repay rule governing residential mortgage lending under new Truth in Lending Act regulations. Effective on Jan. 10, 2014, the final rule requires lenders to verify a borrowers financial information and determine the borrowers capacity to repay the loan over the long term. It also creates a ...
Poor oversight and monitoring have allowed certain borrowers with Home Equity Conversion Mortgage loans to illegally rent their properties to participants in the federal governments Section 8 housing choice voucher program, according to the Department of Housing and Urban Developments Office of the Inspector General (OIG). The second of two OIG audit reports on HUDs oversight of the HECM program has concluded that department policies did not always ensure that borrowers complied with the programs residency requirements. The audit found that 37 out of 174 HECM borrowers reviewed were ...