Mortgage principal reductions that left short-term payments unchanged had no effect on default or consumption for underwater borrowers, according to a new study from the Harvard Joint Center for Housing. Authors Peter Ganong and Pascal Noel believe the findings are significant in the design of loan modification programs – a key question for policymakers in their attempt to help struggling borrowers remain in their homes. The policy debate hinged on the effect of long-term debt ...
Getting Fannie Mae and Freddie Mac out of limbo should not result in the creation of multiple guarantors, according to community lenders testifying at a housing-finance reform hearing in the Senate Banking, Housing and Urban Affairs Committee last week. “The worst outcome in … reform would be to allow a small number of mega-firms to assume the size and scale of Fannie and Freddie under the pretense of creating a private sector solution strong enough to assure the markets in all economic conditions,” said Jack Hopkins, president and CEO of CorTrust Bank, on behalf of the Independent Community Bankers Association. Any plan that promotes consolidation is...
The House Appropriations Committee this week approved a FY 2018 spending bill for the Department of Housing and Urban Development with a $135 million allocation for information technology upgrades in lieu of a proposed lender fee. The set-aside also covers quality control and risk management improvements as well as other administrative costs. The recommended funding is $5 million more than the FY 2017 enacted level for administrative contract expenses and $25 million below the budget request. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary spending for FY 2018, down $487 million from the current level. The House bill authorizes $400 billion for loan guarantees under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $500 billion for Ginnie Mae. Ginnie will also receive $25.4 million for agency staffing, which is ...
The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...
The U.S. Department of Agriculture’s Rural Housing Service has clarified procedures for reevaluating approved lenders’ and servicers’ eligibility under the RHS Single Family Housing Guaranteed Loan Program. The guidance also provides procedures for updating lender information. The RHS intends to review and document lender eligibility in accordance with regulation and program requirements to protect government assets and minimize taxpayer losses. Office of Management and Budget regulations require federal agencies to reevaluate and record lender and servicer eligibility every two years. “For the [USDA single family loan guarantee program], it requires making sure that lenders and servicers participating in federal credit programs meet all applicable financial and program requirements,” wrote Richard Davis, acting RHS administrator. To meet the requirements, lenders must ...
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