The Federal Housing Finance Agency is exploring the possibilities of a streamlined lender-placed or force-placed insurance policy between Fannie Mae and Freddie Mac. FHFA is keenly interested in costs associated with force-placed insurance and related impacts to borrowers, Fannie Mae, Freddie Mac and the taxpayer, a Finance Agency spokesman told Inside The GSEs. We are looking at policy related to force-placed insurance to see where there might be opportunities to reduce costs. Some existing force-placed policies are controversial because they are sold by insurance companies owned by lenders or by insurers with which the lenders have a financial relationship.
New home loan originations in the second quarter of 2012 were up 5.2 percent from the first three months of the year, according to a new Inside Mortgage Finance ranking and analysis. Production trends varied significantly among the top lenders, however, and early estimates suggest that lenders further down the food chain may be picking up market share. Wells Fargo is still effectively lapping the field with more than double the origination volume of its nearest rival, but the industry leader managed a relatively modest 0.8 percent increase in production while its three closest competitors all reported double-digit gains. Although Wells may be mothballing some firepower by shutting down its wholesale broker business, the company was...[Includes two data charts]
The mortgage industry is facing mounting legal challenges to force-placed insurance practices as evidenced by two class-action lawsuits filed or advanced last week while state and federal policymakers look for ways to reduce homeowner costs on lender-placed insurance. A Florida homeowner filed a class-action lawsuit in federal court in Fort Lauderdale against Wells Fargo Bank, accusing the lender of engaging in a pattern of unlawful and unconscionable profiteering and self-dealing by charging inflated force-placed insurance premiums to homeowners who had allowed their coverage to lapse. Ira Fladell, a lawyer representing himself, claims the bank breached its contract with him and acted in bad faith and that the lender bought...
Thousands of ineligible tax cheats received FHA-insured mortgage loans under the American Recovery and Reinvestment Act of 2009 even though federal tax regulations prohibited tax debtors from obtaining government-backed mortgages, the Government Accountability Office reported in a new study. The report found that 6,327 borrowers, who owed a total of $77.6 million in federal taxes, were able to obtain more than $1.44 billion in FHA-insured mortgages under the ARRA. Of these borrowers, 3,815 individuals claimed and received $27.4 million under the statutes temporary First-Time Homebuyer Credit program. The GAOs analysis included ...
Some FHA borrowers are still having difficulty obtaining lower-cost streamline refinancing even though the FHA has said it will accept streamline loans with no credit check, income verification or appraisal. Borrowers said they are still encountering credit checks, income verification and other obstacles, which indicate that lenders are disregarding FHA instructions regarding the enhanced streamline refi program. Even though FHA guidelines are in place, lenders are adding their credit overlays to the detriment of FHA borrowers seeking to ...
The Consumer Financial Protection Bureau expects to undertake a project to refine and integrate disclosure requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act for reverse mortgages to improve consumers understanding of the product. The In a recent 231-page study submitted to Congress, the CFPB said consumers are still confused about how reverse mortgages work, despite the required disclosures and industry efforts to educate the public on this type of equity-based lending. The rising-balance and falling-equity nature of reverse mortgages is particularly ....
The Department of Housing and Urban Development said it has received $1.2 billion in recent settlements with large mortgage lenders and servicers but HUDs internal watchdog, which did much of the legwork in the investigations, reveals a much smaller amount. According to recent audit reports published by HUDs Office of the Inspector General, only Bank of America and Flagstar Bank have made payments under settlement agreements with HUD and the Department of Justice to resolve government claims. In separate memos to HUDs Office of General Counsel last month, Kim Randall, director of the HUD OIG Civil Fraud Division, sought clearance to ...
Two lenders lost their approval to underwrite and originate FHA loans under Credit Watch while two others may be ordered to indemnify the Department of Housing and Urban Development for potential losses on several ineligible FHA-insured loans. HUD recently stripped Community Central Mortgage Co. of Mount Clemens, MI, and Strategic Mortgage Co. of Columbus, OH, of their direct endorsement approval because of the exceedingly high default and claim rates of FHA-insured loans they originated in their business areas. The Credit Watch Termination Initiative allows HUD to terminate a direct endorsement agreement with any FHA lender if ...
Endorsements fell in May at the two top FHA shops in the country even as the markets total production of loans with FHA insurance increased both on a monthly and year-over-year basis, according to Inside FHA Lendings analysis of FHA data. Wells Fargo, the countrys largest FHA lender, saw its May volume fall 14.6 percent to $1.94 billion from April while second-ranked Quicken Loans saw production fall even farther by 22.5 percent to $1.16 billion over the same period. Year over year, Wells Fargos FHA volume fell 5.9 percent in May while for Quicken Loans, the story was different ... (1 chart)
Roughly 27 percent of outstanding Ginnie Mae MBS pools are eligible for the FHAs revised streamline refinancing program, which could translate to $36 billion in new annual Ginnie Mae issuance, according to a report from Barclays Research. Barclays analysts estimated that about $293.0 billion of Ginnie Maes $1 trillion-plus 30-year loan pools were originated before May 2009. About 79 percent of the collateral backing these pools are FHA loans, which suggests that as much as $232.0 billion could qualify...