Falling interest rates tripped up Fannie Mae and Freddie Mac during the fourth quarter, indirectly leading to sharp declines in profitability despite continuing gains in their key mortgage-backed securities guaranty fee operations. Together, the two government-sponsored enterprises earned $1.54 billion in net income during the fourth quarter of 2014, down 74.3 percent from the previous quarter. With their retained portfolios in shrinkage mode, net interest income was down 11.9 percent from 2013. The big factor was...
With many small and mid-tier mortgage companies and banks increasingly worried about straying from compliance with the CFPB’s expanding rules and requirements, vendor representatives are working overtime to alleviate their clients’ anxieties and keep them on task and on budget. “We’re really seeing a lot of fear in the CFPB’s steadily intensifying regulations and requirements,” said Mary Beth Doyle, founder and co-owner of Loyalty Express, a mortgage marketing technology vendor in Woburn, MA. As recently as a year or a year-and-a-half ago, companies were saying they would wait to hear about a new rule themselves from the CFPB. “And today, people are more panic driven. There’s this sense of paralysis because everyone’s afraid of stepping out of bounds and not ...
“Due to our ponderous judicial system, most of the options have been exhausted, and the judges are now expediting the [foreclosure] process,” said Mike Pappas, president and CEO of the Keyes Company.
VA loan volume continued to rise in the fourth quarter of 2014, driven by low interest rates and a strong demand for the lower downpayment loans, according to an Inside FHA Lending analysis of Ginnie Mae/VA data. The volume of VA loans securitized in Ginnie Mae mortgage-backed securities rose 4.0 percent in the fourth quarter to $107.8 billion from the previous quarter, with more than half of the loans coming through the retail channel. Retailers accounted for $51.5 billion in VA loans securitized during the quarter while correspondents and brokers accounted for $44.4 billion and $11.9 billion, respectively. The overall average FICO score for VA loans was 707, with average loan-to-value and debt-to-income ratios of 95.0 percent and 38.2 percent, respectively, during the quarter. Correspondents came up big with VA purchase loans, accounting for $31.7 billion of the $65.1 billion in total purchase loans produced during the fourth quarter. Retail loan officers accounted for $28.5 billion while brokers brought in ... [ 1 chart ]
The FHA has delayed the effective date of new guidance that will require reverse mortgage lenders to perform a financial assessment of applicants for a Home Equity Conversion Mortgage. The FHA indicated that the change was necessary to allow vendors and the Department of Housing and Urban Development to align their respective software before the new system can be operational. Those familiar with the technology said delivering the required system enhancements should not take long. The FHA said a new effective date should be expected within 30 to 60 days of the original March 2 effective date. It will be announced in a new mortgagee letter, the agency added. The new guidance requires lenders to evaluate HECM borrowers’ willingness and capacity to meet their obligations and to comply with program requirements. “Financial assessment” means doing a much more ...
FHA lenders should spend the next couple of months familiarizing their staff with the requirements in the FHA’s new Single Family Housing Policy Handbook to ensure proper implementation of the changes on June 15, 2015, according to compliance experts. The impending changes in the Single Family Handbook are complex and significant. Lenders will need proper legal guidance to navigate and understand hundreds of pages of consolidated housing policies and guidance, as well as substantive changes to FHA requirements, said K&L Gates experts in a recent analysis. The handbook is a consolidated, authoritative source of single-family housing policy and is meant as a one-stop resource for FHA lenders. It gathers and streamlines all FHA requirements, which are currently spread throughout various handbooks, mortgagee letters and other documents, making it easier for lenders to ...
The Consumer Financial Protection Bureau recently sued a reverse mortgage lender and issued consent decrees against two other mortgage companies for misleading consumers with false advertising about FHA-insured mortgage products. The CFPB filed suit against All Financial Services (AFS), a Maryland-based reverse mortgage lender, in the federal district court in Baltimore alleging that the lender disseminated misleading ads for Home Equity Conversion Mortgage loans between November 2011 and December 2012. In addition, AFS allegedly failed to maintain copies of the ads as required by the CFPB under its reverse mortgage regulations. According to court filings, the CFPB alleges that the lender/broker mailed out ads using materials and language that seemed to indicate that it was a federal entity or an affiliate of a government entity. All AFS ads appeared as if they were ...
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