A property management contractor for the Department of Housing and Urban Development has agreed to pay $4.3 million to resolve allegations that it billed the agency for FHA-related work it did not perform in violation of the federal False Claims Act. Cityside Management Corp. of Manchester, NH, allegedly failed to inspect the work of third-party vendors that it hired to perform termite inspections, treatments and repairs on repossessed houses in HUD’s real estate-owned inventory, as required by its contract with HUD. HUD’s inspector general investigated the case and referred it to the Department of Justice. Following the financial crisis, HUD held title to a large number of foreclosed homes acquired by borrowers with FHA financing. HUD contracted with various field service managers, including Cityside, to prepare the REO properties for resale. According to the Office of the U.S. Attorney for the ...

Mortgage-investing real estate investment trusts are having a field day this year, selling additional common stock – and even preferred – to the public, while nonbank lender/servicers continue to be locked out of the market. And given the fact that origination volumes could wind up 20 percent lower this year than in 2016, it’s unlikely that investors will give nonbanks much of a chance unless they can prove themselves as “disruptors” with a “fintech” bent to their operating strategy. But that isn’t...

For years, big banks have delivered nearly all of their conforming mortgage production to the government-sponsored enterprises and retained their jumbo mortgages in portfolio. But some big banks have changed tactics, exploring differing execution options for their originations. Paul Donofrio, CFO of Bank of America, said the bank retained about 90.0 percent of its mortgage production on balance sheet in the second quarter of 2017. BofA had $18.0 billion in originations during the quarter, including first mortgages and home-equity loans. The loans retained...

Flagstar Bank priced its first post-crisis jumbo MBS this week and other big banks could start issuing deals this year, according to industry analysts. Since 2010, the main issuers in the fledgling jumbo MBS market have been nonbanks, with banks content to hold jumbos in portfolio. In recent years, the only bank to issue prime non-agency MBS has been JPMorgan Chase, which has packaged jumbos with some mortgages eligible for sale to the government-sponsored enterprises in its deals. The $443.8 million Flagstar Mortgage Trust 2017-1 follows...

The banking industry reported a widespread increase in net income from mortgage-banking activities during the second quarter of 2017, according to an exclusive Inside Mortgage Trends analysis of earnings reports from publicly traded companies. All 25 companies in the roundup reported positive mortgage-banking results for the most recent quarter, which saw increased production volume and stable mortgage interest rates. As a group, they earned $2.673 billion from ... [Includes one data chart]

Smaller banks are outpacing bigger institutions in terms of on-balance sheet growth in mortgage originations, according to an analysis by an economist at the Federal Reserve. The trend appears to be driven by lingering issues associated with the financial crisis along with regulations that increased capital requirements for large banks. Cindy Vojtech, a senior economist at the Fed, measured the volume of mortgages and other loan types being held in portfolio by 372 banks, including ...

Consumer demand for credit to refinance appears to be in decline, and some of that may be due to borrowers sensing they cannot qualify, findings from the latest survey of consumer expectations by the New York Federal Reserve Bank suggest. The survey was based on data from the mid-year 2016 mark through June of 2017, and it was benchmarked to a previous survey conducted in February. When it comes to consumer behavior, the data show that demand for credit ...

The Federal Reserve’s effort to normalize its balance sheet later this year would cause no significant falloff in the agency mortgage-backed securities market over the next six to 12 months, according to global investment firm Loomis Sayles. In an analysis, the firm concluded that agency MBS remain attractive for now with modest excess returns for agency MBS versus Treasurys. “We favor a modest overweight agency MBS stance versus Treasurys for the remainder of 2017 and ...

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 ...