Ginnie Mae securitization of jumbo mortgage loans with a VA guaranty rose significantly in 2015 despite a volume drop-off in the fourth quarter, according to Inside FHA/VA Lending’s analysis of agency data. Year-over-year results saw an almost 60 percent increase in Ginnie Mae mortgage securitization backed by VA jumbo loans. This was slightly dampened by 17.1 percent drop in VA MBS production in the fourth quarter from the previous quarter. All top-five VA jumbo securitizers – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank, and Quicken Loans – reported significant drops quarter-over-quarter and year-over-year. Wells Fargo delivered a total of $5.0 billion in VA jumbo loans into Ginnie pools, making it the leading jumbo securitizer in that segment. This accounted for 17.7 percent of the market. Freedom Mortgage ended the year with $2.1 billion in ... [ Charts ]

For years, banks have had a losing record in FHA cases involving False Claims Act allegations. Hence, a federal appeals court’s decision to uphold dismissal of a $2.3 billion lawsuit against a major bank is a rarity. In U.S., ex rel. Advocates for Basic Legal Equality (ABLE) v. U.S. Bank, the U.S. Court of Appeals for the Sixth Circuit affirmed the dismissal of an FCA lawsuit against U.S. Bank because the conduct alleged by the qui tam relator had been previously disclosed publicly in a consent order with federal banking regulators. The court held that ABLE’s claims were barred because the conduct that allegedly violated the FCA had already been disclosed when the plaintiff filed suit in 2013. The Department of Justice declined to intervene. The relator suit alleged that U.S. Bank had a practice of initiating foreclosure on FHA-insured mortgages without complying with the ...

The Department of Veterans Affairs has issued additional lender guidance for dealing with the public water contamination problem in Flint, MI. The guidance expands on the agency’s minimum requirements for properties backed by VA loans. The guidance refers to policy in the VA Lender’s Handbook which requires properties to have “a continuing supply of safe and potable water for drinking and other household uses,” before being approved for a VA-backed home loan. In the VA’s view, safe and potable water also refers to water used for bathing, showering and sanitary uses. Properties not in compliance with this requirement will not be eligible for the VA guaranty. Proper mitigation of lead-contaminated water must include a central filtering system that is acceptable to local health authorities and that can provide safe and potable water. Appraisers must comment and adjust for any ...

The Department of Veterans Affairs FY 2017 budget is seeking $34 million for the VA Loan Electronic Reporting Interface (VALERI) to manage the 2.4 million VA mortgages in portfolio. VALERI connects VA with more than 225,000 approved mortgage servicers and an estimated 320,000 veteran borrowers. Specifically, the system is used to manage and monitor servicer and VA staff activities aimed at providing timely and appropriate loss-mitigation assistance to defaulted borrowers. Without these resources, approximately 90,000 veterans and their families would be in danger of losing their homes each year, the VA said. Furthermore, this could cost the VA $2.8 billion a year in additional expense. In addition, VALERI also supports payment of guaranty and acquisition claims.Meanwhile, starting March 19, VA servicers began using the new version of the bulk upload templates to ...

Independent mortgage banks and mortgage subsidiaries of chartered banks were only able to squeeze out a paltry net gain of $493 on each loan they cranked out in the fourth quarter of 2015, a fraction of the $1,238 generated in the third quarter of 2015, according to the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report. Proximity and correlation are not necessarily causation. But sometimes they are. In this case, TRID probably had something to do with the plunge. “Production profits dropped by over 60 percent in the fourth quarter of 2015 compared to the third quarter,” said Marina Walsh, MBA’s vice president of industry analysis. “With the Know Before You Owe (TRID) rule going into effect last Oct. 3 ...

Mortgage banking ended a solid year of profitability in 2015 with a final quarter weakened by slumping production volume and added costs from the implementation of new TRID integrated disclosures. Average firm pretax income in the fourth quarter – for lenders of all sizes – was $1.190 million, according to the Mortgage Bankers Association’s latest Mortgage Banking Performance Report. That was down 30.0 percent from the third quarter and even further off ...

The employment market for retail loan officers – as well as loan brokers – continues to look promising, provided that interest rates remain low this spring and nothing comes along to spook new homebuyers. Moreover, new employment figures from the Bureau of Labor Statistics seem to bear this out. In January – the latest figures available on residential finance hiring – mortgage brokerage firms nationwide added 2,100 full-time staffers, bringing total employment in the niche to 81,600, the highest reading in several years.

Evolution and innovation are usually double-edged swords – and that’s certainly proving to be true when it comes to technology and financial services. New research from DBRS finds that banks are increasingly using technology to differentiate themselves and to enhance the customer experience. But this market upgrade comes with a cost: smaller players with less financial wherewithal are being left further behind. The first main point DBRS analysts made ...

The mortgage lending industry appears to be having a strong first quarter of the year so far, profitability wise, with gain-on-sale margins up strongly – at least until more effects kick in from the Consumer Financial Protection Bureau’s TRID integrated disclosure rule, according to a new analysis. “Our gain-on-sale index indicates margins rebounded sharply in first quarter 2016, up 22 percent quarter-over-quarter on average,” said analysts at Compass Point Research & Trading ...

As risks from cyber attacks on financial institutions remain a top concern, the Federal Housing Finance Agency Office of the Inspector General determined that the oversight of the Federal Home Loan Banks’ cybersecurity program is not effective.In an audit released late last month, the IG found in 14 out of the 15 Federal Home Loan Bank IT examinations performed in 2013 and 2014 that included vulnerability scanning and/or penetration testing, the division of bank regulation did not asses the design of the tests performed by contractors at the banks’ discretion.Vulnerability scanning includes a thorough examination of computers, computer systems, networks, and applications to identify security weaknesses.