As Fannie Mae and Freddie Mac buyback demands have tapered off, lenders continue to face aggressive government efforts to indemnify the FHA for losses, but they do have options available to them that can work in their favor. During a webinar sponsored last week by Inside Mortgage Finance, Amanda Raines, a partner with the BuckleySandler law firm in Washington, DC, emphasized that FHA indemnification demands have continued this year, with an aggressive use of the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act. That has led...

Officials at Nationstar Mortgage suggest that regulatory issues won't prevent the nonbank servicer from growing.

Shortly before Congress left town for its annual summertime break, Sen. Mary Landrieu, D-LA, introduced S. 2641, legislation to amend the Truth in Lending Act to provide that residential mortgage loans held in portfolio would be deemed qualified mortgages for purposes of satisfying the requirements of the Consumer Financial Protection Bureau’s ability-to-repay rule.

Mortgage origination fees and third-party fees increased in the past year, according to a new survey by Bankrate.

Essex Bank launched a wholesale group while Live Well Financial plans to hire more than 300 loan officers.

Mortgage buybacks and indemnifications may be off their peak in terms of volume, but they are widely expected to continue for the foreseeable future, industry experts said this week. But the good news for the industry is that there are a variety of defenses and coping strategies available, depending on the particulars of a given situation. Amanda Raines, a partner in the Washington, DC, office of the BuckleySandler law firm, told participants of an Inside Mortgage Finance webinar this week that more buybacks are definitely on the way. “The Department of Justice is still making financial fraud a priority,” she said. Raines noted...

While banks have plenty of capacity to retain jumbo mortgages in portfolio, the top two contributors to jumbo mortgage-backed securities issued in the second quarter of 2014 were actually banks, according to a new ranking and analysis by Inside Nonconforming Markets. First Republic Bank and JPMorgan Chase were the top two contributors to the scant four jumbo MBS during the quarter. And since the start of 2013, three of the top five ... [Includes one data chart]

Flagstar Bank has $802 million in interest-only mortgages that are scheduled for principal payments to kick in over the coming years, and in some cases the borrower’s monthly mortgage payment will double. Officials at the bank said Flagstar is working with borrowers that have IOs and delinquencies have been low thus far. “We’ve put a dedicated team together to get ahead of these resets,” Lee Smith, Flagstar’s COO, said last week during the bank’s earnings presentation ...

For FHA lenders, the idea of a large lender exiting the FHA market and creating opportunities for market share has been overshadowed by concerns regarding liability in the wake of recent fraud-related settlements between lenders and the federal government. Compliance experts said many of their FHA clients are quietly reassessing their FHA business after JPMorgan CEO Jamie Dimon, during a recent earnings call, spoke out loudly against the government’s stringent enforcement actions aimed at recovering “wrongfully” claimed funds. Lenders fear that FHA enforcement actions have taken a turn for the worse in recent years, and that even errors that have nothing to do with loan default are construed as fraud by government prosecutors, resulting in billion-dollar penalties against FHA lenders. Seven major banks, so far, have paid ...

Twenty-five lenders either settled or lost their FHA approval for a full year because they failed to complete their annual recertification requirement, while 21 others were subjected to enforcement actions because their origination or servicing files did not meet FHA requirements. Results from cases heard by the Department of Housing and Urban Development’s Mortgagee Review Board in 2012 and 2013 showed that the board used all enforcement tools at its disposal. Specifically, the board took the following actions: Assessed money penalties of more than $1.5 million; imposed fees, refunds and principal buydowns totaling $1.2 million; required indemnification on 163 FHA-insured loans; withdrew FHA approval of four lenders; suspended the FHA approval of one lender; and placed one lender’s approval on probation. Violations were related to ...