The National Reverse Mortgage Lenders Association is seeking guidance from the Consumer Financial Protection Bureau on how to design reverse mortgage advertisements without triggering regulatory scrutiny. Peter Bell, NRMLA president and chief executive, said he had sent a Freedom of Information Act request seeking access to the particular ads that the CFPB sought comment on in a recent study on reverse mortgage advertisements. The study found that consumers who viewed the ads were left with misimpressions about reverse mortgages. For example, consumers were confused about reverse mortgages being loans. Some thought that home-equity conversion mortgages are a “government benefit” or that they could ensure that homeowners could stay in their homes for the rest of their lives. Others complained of difficulty reading the fine print and that ...

The FHA plans to issue a proposed rule in the fall that would allow it to insure single-family condominium units in multifamily projects, according to the agency’s regulatory agenda for the second half of 2015. The proposed rule would cover condo units that are attached, detached, semi-detached or manufactured. It would apply as well to undivided interests in the common areas and facilities that serve the project. The proposed change would clarify and ensure lender compliance with the Housing and Economic Recovery Act of 2008. HERA moved FHA’s authority to insure single-family condominiums from Section 234 to Section 203 of the National Housing Act. However, because Section 203 does not provide the same authority for FHA, rulemaking became necessary. HERA also granted FHA the authority to issue administrative notices to convey condominium policy guidance until a ...

Gross new issuance of Fannie Mae, Freddie Mac and Ginnie Mae single-family MBS declined by 6.3 percent from April to May, according to a new Inside MBS & ABS ranking and analysis. The agencies produced $113.46 billion of new single-family MBS last month. Though down from April, it was still significantly higher than at any time in 2014, when production averaged just $77.46 billion per month. The key to the drop-off in May was...[Includes two data tables]

Refinance lending fueled the growth in mortgage originations during the first quarter of 2015, although new data suggest that the purchase-mortgage sector is taking hold. Mortgage lenders originated an estimated $221.0 billion of refi loans during the first quarter, an increase of 51.4 percent from a revised fourth-quarter production estimate of $146.0 billion. Inside Mortgage Finance refi and purchase-mortgage estimates for all four quarters of 2014 were revised to reflect just first-lien mortgage originations. Refi loans accounted...[Includes three data tables]

The Department of Housing and Urban Development is working on a new proposed rule to ease the backlog in FHA insurance claims filings as well as to revise the department’s “curtailment of interest” policy to relieve the burden on mortgagees. The FHA expects to finalize the proposed rule in August this year, according to HUD’s new regulatory agenda, although the agency rarely comes even close to its projected rulemaking timelines. Specifically, the proposed rule would establish...

A federal district court judge in Washington, DC, has granted Quicken Loan’s motion to stay a government lawsuit until another federal judge in Detroit decides whether to proceed with Quicken’s preemptive lawsuit against the government. The decision by U.S. District Court Judge Reggie Walton in Washington would give Quicken the opportunity to shine light on FHA compliance issues, loan sampling and the Department of Justice’s use of the False Claims Act to prosecute FHA lenders. Such enforcement actions have resulted in more than $4.5 billion in settlements with FHA lenders. In April, Quicken sued...

“Without nonbanks, today’s sluggish mortgage market would be much less vibrant,” according to research released this week by two researchers associated with Harvard University. Their working paper stresses that implementing bank-like standards for nonbanks isn’t the best strategy to mitigate risks in the housing finance system. The paper was authored by Marshall Lux, a senior fellow of the Mossavar-Rahmani Center for Business and Government, which is part of the John F. Kennedy School of Government at Harvard University; along with Robert Greene, a research assistant at the same center. They called...

An FHA proposal aimed at clarifying loan-certification rules is a step in the right direction but it needs more work, according to industry observers. Lenders declined to comment on the proposed form changes but they all agree that the proposal does not go far enough. The revisions aim to make the language in Form 92900-A (HUD Addendum to Uniform Residential Loan Application) clearer for both borrower and lender. Applicants for an FHA or a VA loan sign the addendum to certify to the government that the information provided by the borrower on the mortgage loan application is correct. By signing the addendum, the borrower certifies that he or she will make payments on the home loan or become indebted to the federal government upon failure to repay the loan. For lenders, signing the form certifies that the loan application meets all of FHA’s insurance requirements. This is where lenders often ...

Security issuances backed by VA loans totaled $35.5 billion in the first quarter of 2015, with VA streamline refinance loans accounting for 57.7 percent, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Approximately $20.5 billion in VA interest rate reduction refinancing loans were securitized during the first three months as borrowers took advantage of lower interest rates.“For the last three to four months, rates have been bottoming out again, and if rates are lower it makes sense to refinance,” said Jon Shrum, vice president of Commerce Home Mortgage, a VA-certified lender in Huntington Beach, CA. An estimated $14.5 billion in VA purchase mortgages also were securitized during period. VA loans comprised 13.1 percent of all loans in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities. California, Virginia, Texas, Florida and Washington, ... [2 charts]

Whistleblowers that bring a False Claim Act claim against an FHA lender based on previous publicly disclosed information have no standing, according to a recent federal district court ruling. Judge Jack Zouhary of the U.S. District Court for the Northern District of Ohio dismissed an FCA lawsuit against U.S. Bank because the whistleblower had neither direct nor independent knowledge of the bank’s alleged false claims – two basic requirements for standing in a whistleblower suit. The Advocates for Basic Legal Equality (ABLE), an Ohio-based legal aid group, filed an FCA lawsuit against U.S. Bank for allegedly disregarding and violating FHA regulations. The group accused the bank of filing false claims and collecting payments without evaluating loss mitigation alternatives before foreclosing on properties. According to ABLE, it had consulted with “many people,” whose mortgage loans were ...