The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...

Wall Street has unveiled policy proposals calling for premium and guaranty fee adjustments and reduced loan limits for FHA and the government-sponsored enterprises to jump start the return of private capital to the U.S. housing market. The American Securitization Forum said the current level of government activity in the mortgage market is neither sustainable nor advisable. The government, through FHA, Fannie Mae and Freddie Mac, directly or indirectly guarantees 90 to 95 percent of new mortgage originations in the country, the trade association said. While everyone agrees the government’s role in housing should be reduced over the long term, there is ...

The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the department’s 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ...

The Department of Housing and Urban Development’s Office of the Inspector General has recommended that two lenders be reviewed for potential treble damages under the False Claims Act for allowing restrictive covenants to be recorded in regard to 864 FHA-insured loans in violation of FHA regulations. CTX Mortgage Co. of Dallas, TX, and Pulte Mortgage of Englewood, CO, could be on the hook for millions of dollars if HUD agrees to accept the OIG’s recommendations, which also include reimbursements and indemnification for paid and potential future claims. Both lenders maintained that ...

Genworth Financial reported improved first-quarter earnings, Mortgage Guaranty Insurance Co. made some progress on the litigation front while new entrant National Mortgage Insurance went through some highs and lows in the same week. It’s not every day a private MI gets to report a net profit, but Genworth’s U.S. mortgage operation posted $21 million in operating income during the first quarter, following a $32 million loss in the previous quarter. It was the first time in five years that the MI unit reported a profitable quarter. First-quarter results included a $4.5 million charge related to the settlement with the Consumer Financial Protection Bureau announced on April 4. Genworth’s MI losses were...

Fannie Mae’s plan to unload, potentially, billions of dollars of non-performing residential loans has been delayed and may be killed, according to industry officials who’ve been tracking the project. “It’s going nowhere, but it’s not like there’s a requirement for them to say so publicly,” said one advisor who is a vendor to Fannie. The GSE, to date, has declined to discuss the issue – along with its regulator, the Federal Housing Finance Agency. Fannie has been working on an NPL sale for close to a year, and even hired an investment banker, Milestone Advisors LLC, to guide it through the auction process. Initially, it had hoped to offer a package of $250 million of delinquent home mortgages for sale to the highest bidder.

The Federal Home Loan Bank of Cincinnati says a unit of Lehman Brothers Holdings is not entitled to a multimillion dollar payday because the FHLBank did not short change the firm when it closed out swaps and options transactions ahead of Lehman’s 2008 bankruptcy. Last week, Lehman filed a breach of contract lawsuit in Manhattan federal court connected to 87 derivative transactions or interest-rate swaps with the FHLBank that fell apart when Lehman entered bankruptcy on Sept. 15, 2008, at the height of the financial crisis.According to its lawsuit, Lehman says the Cincinnati Bank violated its agreement by paying only $13.7 million when the transactions were terminated due to the firm’s Chapter 11 filing.

Most companies reported declining earnings from their mortgage banking businesses during the first quarter of 2013, according to a new analysis by Inside Mortgage Trends. As a group, however, the 23 diverse businesses included in the round-up posted a surprising 34.2 percent increase in aggregate mortgage banking earnings compared to the fourth quarter. The aggregate mortgage banking income was $6.74 billion for the group, a $1.72 billion increase over the previous quarter. Virtually all of that increase could be attributed to one company, Bank of America, which bounced back from a $540 million net loss during the fourth quarter to a $1.26 billion profit in early 2013 – a $1.80 billion turnaround. BofA took...[Includes one data chart]

The non-distressed property market is strong and being driven by borrowers in need of mortgage financing, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results. Thomas Popik, research director for Campbell Surveys, said time-on-market trends, number of offers and sales-to-list price ratios all indicate an exceptionally strong market for non-distressed properties. “The metrics for this segment are not affected by policy decisions at mortgage servicers to release or not release distressed properties onto the market,” he noted. The average number of offers for non-distressed properties, based on a three-month moving average, hit...

The five servicers participating in the $25 billion national servicing settlement will face increased scrutiny due to complaints regarding their compliance with the settlement. In addition to requiring a certain amount of loss mitigation actions on non-agency loans, the settlement set standards to be followed by the servicers. Joseph Smith, the settlement’s monitor, said he is establishing additional metrics for the settlement to address complaints about actions by Ally Financial, Bank of America ...