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 ...

Combined servicing volume for the top 50 Ginnie Mae MBS servicers jumped to $1.23 billion in the first quarter of 2012 from $1.11 billion during the same period a year ago – an 11.2 percent increase on a year-over-year basis, according to the Inside Mortgage Finance MBS Database. The quarterly change was a modest 1.7 percent increase from $1.21 billion in the fourth quarter of 2011, data showed. Wells Fargo and Bank of America accounted for 53.5 percent of total Ginnie Mae servicing in the first quarter, with $361.1 million and $302.1 million, respectively. Year-over-year, top-ranked Wells Fargo (29.1 percent market share) saw a ... (1 chart)

MetLife, Inc. has announced that it is leaving the reverse mortgage business as part of a broader business plan to exit the mortgage market and focus strategically on global insurance and employee benefits. Nationstar Mortgage will purchase MetLife’s reverse mortgage servicing portfolio. MetLife Bank will no longer accept new reverse mortgage loan applications and registrations. MetLife’s entire retail banking business, including mortgages, accounted for less than 2.0 percent of the company’s 2011 operating earnings. Last year, the company decided to ...

Even as it awaits the outcome of a government fair-lending investigation that it helped initiate, the National Community Reinvestment Coalition says the majority of lenders under review have reacted favorably but the widespread use of “credit overlays” remains a problem in the industry. In December 2010, the NCRC filed complaints with the Department of Housing and Urban Development after its investigation found that 22 lenders set minimum borrower credit scores as high as 640 for FHA loans, even though FHA guarantees loans to borrowers with scores as low as 580. The NCRC claims the credit...

Mortgage lenders closed a record $28.31 billion in mortgages with Veterans Administration home loan guaranties during the first quarter of 2012, breaking the previous all-time high set in the fourth quarter of last year. VA lending has been going gangbusters over the past few years as FHA’s market share has gradually declined. In 2011, the VA program provided more new primary mortgage insurance coverage than the private MI industry for the first time ever since the birth of the private MI business. In 2011, the VA accounted for 22.0 percent of the primary MI market, and 26.0 percent in the...(Includes one data chart)

Mortgage industry participants have mixed views about the FHA’s revised policy on disputed debt despite a general concern over its impact on borrower eligibility and lenders’ bottom lines. This week, the FHA delayed implementation of the policy until July 1 to get more feedback from lenders and industry participants and to work on clarifying guidance. The policy’s initial effective date was April 1. Lenders felt the FHA had bypassed them when the agency decided to announce the policy revision in a Feb. 28 mortgagee letter, along with other FHA underwriting changes. Affected parties should have been able to ...

A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...