What started as a battle between investors has spread to include lenders, borrowers and servicers. Proponents of plans to use eminent domain for principal reduction warn that the government-spon-sored enterprises and lenders could be subject to redlining and other consumer protection regulations for opposing the evolving scheme. No county or municipality has implemented a wide-scale eminent domain plan, though a number of areas are considering the option. Non-agency mortgage-backed security investors have strongly opposed eminent domain proposals, claiming they are unconstitutional, among other issues. “This unprecedented use of eminent domain law, if successful, would...

The Homeownership Protection Program Joint Powers Authority Board, a partnership between California’s San Bernardino County and two of its local communities, unanimously directed staff to develop a request for proposals that would invite interested parties with any kind of formal plan to assist underwater families in the JPA area to submit those plans for board consideration. The JPA is examining local government solutions to the negative-equity issues many homeowners in the two participating communities of Fontana and Ontario are having, with the goal of keeping families in their homes, reducing defaults and foreclosures, and enhancing the economic health of the communities. “Presently, the board has not received...

Despite increased activity in the Fannie Mae and Freddie Mac refinance programs for underwater borrowers during the second quarter of 2012, total refi originations declined by 4.8 percent from the first three months of the year, according to a new Inside Mortgage Finance analysis and ranking. Refinance activity still accounted for 68.1 percent of originations during the most recent quarter, but that was down from 75.3 percent in the first three months of the year. Partly offsetting the drop in refi business was a 35.8 percent increase in purchase-mortgage originations, which rose to an estimated $129.0 billion in the second quarter. But compared to the first half of 2011, purchase-mortgage lending was down 1.3 percent as of the midway point this year. Refinance originations appear to be climbing in the third quarter. Data on Fannie and Freddie securitization activity in July and August suggest that total refi business at the government-sponsored enterprises is...[Includes four data charts]

The Department of Housing and Urban Development appears to have lost a round in its fight to bring an alleged FHA defrauder to justice. HUD suffered a setback recently after U.S. District Judge Gray Miller in Houston granted declaratory relief to Allied Home Mortgage Corp. (AHMC) to challenge HUD’s suspension of the lender’s authority to originate and underwrite FHA-insured loans. The Houston-based lender contends that HUD acted capriciously and arbitrarily without due process of law. It based these claims on ...

The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

The Department of Housing and Urban Development said it will step up its oversight of the department’s loan quality review to ensure that weaknesses, such as those uncovered in a recent internal audit, will not happen again. An audit performed by the agency’s Office of the Inspector General concluded that HUD’s Quality Assurance Division had adequate oversight of lenders’ compliance with FHA underwriting standards but for two loans that apparently eluded reviewers. QAD reviewers are required to ...

Industry trade groups last week gave the Department of Housing and Urban Development another nudge to lift the moratorium on investor participation in the FHA 203(k) property rehabilitation program. Following up on an industry request in June, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders in a joint letter to HUD reiterated the importance of the 203(k) program in reducing the current real estate-owned (REO) inventory and addressing the oversupply of housing. The groups said the program ...

Liquidity requirements apply only to the required minimum net worth of FHA-approved lenders and mortgagees, not to their total net worth, according to a final rule issued recently by the Department of Housing and Urban Development. The rule clarifies language in FHA regulations, which has caused some confusion and anxiety among approved lenders, lawyers and other regulators, said HUD. HUD made clear that the rule simply requires FHA lenders to ...

The Department of Housing and Urban Development has issued new rules for qualifying borrowers who list Social Security income on their application for an FHA-insured mortgage loan.The number of FHA borrowers with verified Social Security income is unknown because HUD does not track borrowers’ source of income, according to a department spokesperson. But industry observers said the number may not be significant. Nonetheless, lenders would need to request several important documents from borrowers who would rely on SS income to qualify for an FHA home loan, the new rules state. These documents include ...

As some aggregators scale back or add overlays to their FHA Streamline Refinance mortgage loans, First Mortgage Corp. stands out because of its confident approach to the product. While other lenders impose overlays or charge more for the additional risk, FMC, an FHA-approved direct lender in Ontario, CA, imposes no restrictions on streamline refinancing other than those required by FHA guidelines. “First Mortgage prides itself in serving historically underserved borrowers and so we have a commitment to underwrite loans to FHA guidelines for the most part,” said FMC spokesperson Sharon Magnuson. The FHA streamline refi program allows certain borrowers ...