The Department of Housing and Urban Development’s Office of the Inspector General will begin internal audits later in 2012 on various aspects of the FHA single-family mortgage insurance program and release results of some that were begun last year. In August, OIG auditors will begin review of the FHA TOTAL (Technology Open to All Lenders) Scorecard to determine whether the automated underwriting system approves loans that otherwise would not be approved under manual underwriting. Auditors will also check whether the scorecard could ...

Home Equity Conversion Mortgage loans remain widely available, thanks to the independent lenders that rallied to plug the gaps as major players bolted from the reverse mortgage market, an industry executive told lawmakers this week. In testimony during a House subcommittee hearing on FHA regulation of the HECM market, Jeffrey Lewis, CEO of Generation Mortgage Co., said MetLife’s departure from the market and closure of its traditional mortgage-origination business say nothing about the value of the HECM product to consumers. Lewis said MetLife’s decision was a strategic one and had nothing to do with ... (1 chart)

Deutsche Bank and its mortgage subsidiary MortgageIT this week agreed to pay $202 million to settle civil claims that they engaged in a decade of misconduct and deception to qualify risky mortgage loans for FHA insurance. The civil fraud lawsuit was brought against the two companies by the Department of Justice as a result of a referral from the Department of Housing and Urban Development. Filed in May last year, the government lawsuit sought damages and civil penalties under the False Claims Act. The suit alleges that MortgageIT, which Deutsche Bank acquired in 2007, used its authority as a direct endorsement lender (DEL) to ...

Genworth Mortgage Insurance has named Martin Klein as acting chief executive officer in the wake of former CEO Michael Frazier’s resignation last week. Klein is and remains the company’s chief financial officer. James Riepe was named nonexecutive chairman of the board. NMI Holdings, Inc., has raised $550 million in a private placement to provide mortgage insurance on loans to Fannie Mae and Freddie Mac. The company is in the process of obtaining approvals from state insurance regulators and the two government-sponsored enterprises. The MI unit will be called ...

Private MI officials say FHA pricing changes have helped the industry regain some market share from the agency, but future gains may depend on how the federal government eventually changes its role in the mortgage market. After its most recent pricing adjustment in April of this year, the FHA does not expect to make further changes in its insurance premiums, said Charles Coulter, deputy assistant secretary at the FHA, during this week’s secondary market conference sponsored by the Mortgage Bankers Association. “We are an average pricer, and that alone creates opportunities” for private MIs, he said...

Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...

The Department of Housing and Urban Development said it would review and update as necessary its requirements for servicers of FHA-insured loans in conjunction with the establishment of new standards by the Consumer Financial Protection Bureau. HUD wants to ensure coordination between the FHA and CFPB standards and that each set of standards provides effective solutions for borrowers, said an FHA spokesman. On April 9, the CFPB previewed some of the mortgage servicing rules, which the agency plans to propose this summer and adopt in January 2013. It is unclear whether ...

A national consumer advocacy group, whose own investigation of FHA credit overlays in 2010 triggered a federal probe of 19 FHA lenders, said it plans further undercover testing to ensure the unfair practices cease. The National Community Reinvestment Coalition said it is still waiting to hear from the Department of Housing and Urban Development about the results of the multiple investigations the group helped launch over a year ago in response to complaints about credit overlays. A HUD spokesman said the investigation is continuing and “nearing completion.” He did not say, however, why it was taking ...

There is nothing in the FHA guidelines that would make a loan ineligible for FHA insurance if the property were located near high-voltage power lines, according to an agency official. Testifying during a recent congressional field hearing, Bobbi Borland, acting branch chief of the Department of Housing and Urban Development’s Santa Ana Homeownership Center, said FHA-insured mortgages are based on the property’s appraised value at the time of origination, as determined by an FHA-approved appraiser. “There is simply no easy way to identify whether ...

Ally Financial has announced a plan to reduce its purchases of government-backed loans from brokers and correspondents and shift its government financing activity to retail and direct channels. The lender informed its partners of its plan to reduce its FHA and VA operations in the correspondent and wholesale broker channels effective April 16. However, Ally will continue its correspondent relationships with key customers. In 2011, like most lenders, Ally focused on the agency market, with conventional conforming mortgage loans comprising ...