The Department of Housing and Urban Development’s proposal to remove a key disclosure in a standard HUD/VA form that comes with a residential mortgage closing document is getting flak from the mortgage industry and from some members of Congress. Leading Democrats on the Senate Banking and House Financial Services committees are pushing HUD to reconsider the proposal. They fear the proposed change would make it easier for lenders that have engaged in criminal behavior to re-enter the FHA and VA markets and continue their illegal lending practices. Among other things, HUD’s proposal would eliminate the requirement that FHA lenders certify on each loan application that they are not, or have not recently been, subject to certain charges or penalties. In their letter, Senators Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, urged HUD to ...

A multi-million dollar false claim lawsuit filed by the Department of Justice against Wells Fargo in 2012 appears headed to trial unless both sides agree to renegotiate a settlement. Brought under the federal False Claims Act, the lawsuit has moved on to the discovery phase of the litigation following a failed attempt by the parties to reach a settlement. The DOJ has wielded the FCA effectively in the past couple of years in efforts to recover losses from lenders that allegedly committed loan fraud against the FHA. A string of FCA lawsuits against FHA lenders has resulted in approximately $4.5 billion in recoveries for the government. The 2012 lawsuit alleged that Wells Fargo misled the FHA as to the quality of underwriting on 6,320 FHA-insured loans, which later caused approximately $190 million in losses to the agency’s mortgage insurance fund. Wells Fargo has denied the allegations and maintains that, as a ...

The Federal Home Loan Bank’s Mortgage Partnership Finance (MPF) Program has removed certain barriers to streamline refinancing of government-backed mortgages. Effective on July 6, 2015, the MPF no longer requires minimum FICO score, maximum loan-to-value ratios or appraisals for FHA streamlined refis, VA Interest Rate Reduction Refinance loans and rural housing home loans with a U.S. Department of Agriculture guarantee. The MPF program’s participating financial institutions (PFIs) may now originate and underwrite streamline refis based solely on the requirements of the FHA, VA or the USDA’s Rural Housing Service. The program currently requires borrower and co-borrower income for government loan streamline refis for the purpose of loan presentment. “Presentment” refers to the right to require a lender to demand payment of amounts ...

A handful of nonbank lenders are stepping up to the plate, offering mortgages to borrowers who are just one day removed from a foreclosure or short sale. But there’s a catch: many of the lenders willing to extend such credit want at least 20 percent down. Also, as it turns out, the trend is being funded by commercial banks that are serving as the end investors in the product. Two banks – one in California and one in New York – were identified...

Big banks have attracted considerable attention as they have reduced their footprint in the mortgage market. Although nonbank lenders and servicers have taken up most of the slack, a new Inside Mortgage Trends analysis reveals that small banks have been taking a bigger role in the industry. Commercial banks and thrifts have been building their holdings of unsecuritized home loans at a time when the overall supply of mortgage debt has been ... [Includes one data chart]

The nation’s megabanks reported modest to strong growth in residential production for the second quarter, a likely harbinger of what might be a stellar showing by some of the nation’s nonbanks, which have been steadily gaining market share the past few years. According to a tally from Inside Mortgage Trends based on earnings reports issued this week, Wells Fargo was not only the market leader in originations with $62.0 billion in the second quarter ... [Includes one data chart]

Although some mortgage originators might brag – or even advertise – that they can close a loan in under 30 days, it’s not likely to happen, at least not in practice. According to interviews conducted by Inside Mortgage Trends over the past two weeks, a variety of factors can derail a closing – including many circumstances that an originator just cannot control. Such circumstances can include insufficient funds on the part of the borrower, scheduling mix-ups ...

When dealing with celebrity clients – TV and film stars in particular – mortgage loan officers rarely interact directly with the star talent over the loan details. Instead, they deal with a celebrity’s business manager or another intermediary, according to Barry Habib, CEO at MBS Highway and a well-known mortgage trainer and motivational speaker. Habib should know – besides being a mortgage professional, he’s also an actor and producer, whose credits include ...

Depository institutions – along with the top tier of companies that service loans pooled in mortgage-backed securities by Fannie Mae, Freddie Mac and Ginnie Mae – continued to pull back from the market during the second quarter of 2015, according to a new Inside Mortgage Finance analysis. Commercial banks, thrifts and credit unions serviced a total of $3.218 trillion of mortgage servicing rights connected with agency MBS as of the end of the second quarter. That was down 6.9 percent from the first quarter of 2015. Although depositories remain the dominant force in the agency MSR market, accounting for 64.2 percent of servicing on outstanding single-family MBS, nonbanks continued...[Includes four data tables]

For mortgage companies that were hoping to go public this year, they might as well forget about it. As one industry analyst put it: “The IPO market isn’t even on life support. It’s just plain dead.” Although many privately held mortgage firms are enjoying a strong year in both lending and profitability, the initial public offering market is dormant for three reasons: Nationstar Mortgage, Ocwen Financial and Walter Investment Management Corp. This year, the once “big three” nonbanks have paid...