A Treasury Department report called on the Department of Housing and Urban Development to establish clear standards for determining which mortgage-related violations and loan defects the Department of Justice should pursue under the False Claims Act. The report also recommended that DOJ ensure that materiality, for purposes of the FCA, is linked to the standards of the agency administering the program to which the claim has been filed. Furthermore, it urged both HUD and the DOJ to work together to clarify the process by which they can jointly resolve claims. The report was issued pursuant to President Trump’s February 2017 executive order establishing his administration’s policy to regulate the U.S. financial system according to a set of core principles. Both HUD and the DOJ have been successful in using the statute to prosecute FHA lenders who knowingly commit fraud or make ...

On Aug. 1, the U.S. Senate voted 92-6 to pass a four-bill appropriations package that includes FY 2019 funding for the Department of Housing and Urban Development and the U.S. Department of Agriculture housing programs. The bill passed without changes to program funding levels previously approved by Senate appropriators. The House Appropriations Committee has approved FY19 spending bills for both HUD and USDA. The full House, which is away for the summer break until Sept. 4, has not yet voted on the package. The Senate bill retains the previous fiscal year’s $400 billion in new loan commitments in the FHA Mutual Mortgage Insurance Fund and $30 billion for the general insurance and special risk insurance program, which include special purpose single- and multifamily loans, multifamily rental housing and condominiums. The bill also sets aside $550 billion for Ginnie Mae ...

A legislative proposal to charge veterans, servicemembers and military spouses more for a VA home loan is getting heat from lenders and the Department of Veterans Affairs itself. Testifying before the Senate Committee on Veterans Affairs last week, Paul Lawrence, VA undersecretary for benefits, warned that increasing VA loan fees would impose additional financial burdens on veterans who are trying to buy a home, making them more vulnerable to predatory lending. Fee-related proposals are included in H.R. 299, the Blue Water Navy Vietnam Veterans Act of 2017. The House of Representatives passed the bill by a vote of 382-0 in June and it is currently under consideration in the Senate. H.R. 229 would expand disability benefits to Vietnam veterans who were exposed to Agent Orange while serving on U.S. ships offshore or on the ground in Thailand and the Korean demilitarized ...

The appraisal industry is opposed to a legislative proposal that would make changes to how appraisals are procured for the VA home loan program. The appraisal measure is one of the key provisions in H.R. 299, the Blue Water Navy Vietnam Veterans Act, which the House of Representatives passed by a vote of 382-0 in June. The bill is now pending in the Senate Committee on Veterans’ Affairs. The Blue Water Act would clarify presumptions relating to veterans’ exposure to herbicide, such as Agent Orange, during the Vietnam era and disability claims. The bill also proposes changes to the VA loan fee structure, including a proposed hike to the fees veterans, servicemembers and their spouses pay to obtain a VA-guaranteed home loan. The appraisal provision in H.R. 299 would allow VA appraisers to engage a third party to perform property inspections on their behalf. The provision addresses a problem with ...

Private mortgage insurers had one of their strongest quarters in recent memory in the spring of 2018, thanks to a surge in new insurance written and a healthy upturn in profitability, according to a new Inside Mortgage Finance ranking and market analysis. [Includes two data charts]

The GSEs have recently updated their policies as they look to simplify borrower-initiated requests to cancel private mortgage insurance coverage. Fannie is the latest to announce plans to update the various methods it uses for verifying current property values and said it will require servicers to implement the new policy by March 1, 2019. Borrower-initiated requests to terminate mortgage insurance based on the home’s original value no longer need to depend on servicers to warrant the property value, under Fannie’s new policy. The GSE said lenders can use the GSE’s Automated Property Service tool to verify the current...

Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

The U.S. Department of Agriculture wants to begin charging lenders a fee on each guaranteed rural-housing home loan beginning Jan. 2, 2019, to fund future information-technology upgrades. In a notice published in the July 13 Federal Register, the agency said it expects to levy a $25 user fee for using the Rural Housing Service’s automated loan-guarantee systems. Comments are due Sept. 11, 2018The fee collection is authorized under the 2016 Housing Opportunity Through Modernization Act as a “technology fee” to improve program delivery and “reduce burden to the public.” The authorized fee can be up to $50 per loan. It will be collected at closing. The Department of Housing and Urban Development has been trying unsuccessfully to obtain authority from Congress to charge a similar fee to modernize its aging information technology. The USDA said it would notify lenders before the ...

The Mortgagee Review Board’s improvement of its processes and use of administrative actions has greatly eased its backlog of lender recertification cases, according to the Department of Housing and Urban Development’s internal watchdog. An audit by HUD’s inspector general found a vastly improved enforcement of MRB mandates and application of penalties to lenders compared to previous findings. An analysis of the board’s FY 2016 activities found, among other things, that 19 lenders with the same violation received the same penalty. The report attributed the change to the board’s decision to assign staff to implement recommendations in the IG’s evaluation report in May 2009. The 2009 audit raised concerns about the speed of the MRB process, the number of cases on which the board rules, and the magnitude of penalties it levies. The MRB rules on cases against FHA lenders where there ...

Fannie Mae recently announced plans to simplify its private mortgage insurance cancellation policy. In a letter that went out to lenders last week, the government-sponsored enterprise updated the different methods for verifying current property values.