Fannie Mae and the Federal Home Loan Bank of Chicago were among the public commenters supporting – with some key revisions – the CFPB’s proposed “right to cure” a mortgage made in good faith that inadvertently exceeds the 3 percent points-and-fees cap under the bureau’s qualified mortgage standard.Earlier this year, the CFPB proposed allowing a cure for a points-and-fee violation if three criteria are satisfied, the first of which is if the creditor in good faith intended to originate the loan as a QM and the loan otherwise meets the requirements of a QM. Additionally, the creditor or the assignee has to refund to the consumer the dollar amount by which the loan's points and fees exceed the applicable limit and ...
SunTrust Mortgage, based in Richmond, VA, agreed to pay a total of $968 million to settle allegations of origination and servicing wrongdoing under a consent order brought by the CFPB. The Department of Justice, the Department of Housing and Urban Development and state attorneys general from 49 states and the District of Columbia joined in the settlement, which stemmed from the National Mortgage Servicing Settlement. The company will provide $500 million in loss-mitigation relief to underwater borrowers. The order also will require SunTrust to pay $40 million to approximately 48,000 consumers who lost their homes to foreclosure, and $10 million to cover losses it caused to the FHA, the Department of Veterans Affairs, and the Rural Housing Service. The order...
Jumbos for borrowers with strong credit profiles present banks with limited risks – particularly adjustable-rate mortgages – and the loans offer lucrative opportunities to cross-sell other products.
NY Passes Bill to Reduce Number of FHA Loans that Would Fall Under Subprime. The New York Assembly recently passed legislation that would result in fewer FHA loans being classified as “subprime” under state banking law, according to the law firm Ballard Spahr. Already passed by the Senate, the bill would make permanent prior emergency rules issued by the Department of Financial Services, which raised the subprime threshold 75 basis points for those loans subject to the revised FHA mortgage-insurance premium cancellation policy. Although the emergency rules were set to expire on Dec. 31, 2013, the DFS granted an extension to allow the state legislature additional time to find a permanent solution, said Ballard Spahr attorneys. The bill passed with overwhelming bipartisan support and strong industry backing, and is expected to ...
FHA jumbo loan originations fell significantly in the first quarter of 2014 due primarily to higher mortgage insurance premiums and a decrease in the mortgage loan limits, particularly in high-cost areas of the country, according to Inside FHA Lending’s analysis of agency data. FHA lenders reported a meager $2.4 billion in jumbo originations during the first three months of the year, a decrease of 21.2 percent from the previous quarter and down a whopping 55.7 percent from the same period a year ago. Purchase loans accounted for 81.0 percent of new originations while fixed-rate loans comprised 86.8 percent. FHA jumbo loans are those over $417,000 and they comprise a very small slice of the FHA’s overall loan portfolio. Citing FHA data, Brian Chappelle, a mortgage industry consultant, said that of the FHA loans originated in the last 12 months, roughly 11,000 loans were above $500,000, down from ... [ 2 charts]
The FHA’s Homeowners Armed With Knowledge (HAWK) pilot program is getting strong public support, particularly from first-time homebuyers and housing counselors.Based on comments received by the Department of Housing and Urban Development so far, the HAWK pilot is already taking hold in the public’s mind despite its limited publicity. -Rachel Andreyo, a new college graduate who was turned down recently for a mortgage loan pre-approval, said HAWK not only would educate potential first-time homebuyers about homeownership but also raise their hope of becoming a homeowner before the age of 30. “The knowledge this program would provide could be a game changer for young people and struggling Americans everywhere,” she wrote. Shawanda Walker, a single mother, sees HAWK as an opportunity for her to learn how to negotiate her first home purchase, learn about property taxes and ...
SunTrust Mortgage’s recent settlement of a dispute with the federal government and 49 state attorneys general over defective FHA loans and Wells Fargo’s losing bid to quash a similar lawsuit are raising concerns about doing business with the FHA. Industry attorneys say the lesson for lenders in these recent industry debacles is that it is “extraordinarily dangerous” to do FHA loans these days given the outcome of the two cases. It is also getting harder to trust mortgage settlement agreements with the government, they added. “The scariest part in all these is the combination of government forces involved in these claims – state AGs, Department of Justice, Department of Housing and Urban Development and the Consumer Financial Protection Bureau,” said an attorney, who worked on both cases. “When they want to get you, they can get you.” Others believe these developments could have a ...
Two firms plan to issue jumbo mortgage-backed securities next week, breaking a seven-week lull in issuance. However, jumbo MBS activity is expected to remain suppressed due to a number of factors, including dominance by the government-sponsored enterprises. “The idea that reform of the GSEs could pave the way for the private market’s return seems to have faded,” according to analysts at Standard & Poor’s. The rating service pointed to moves by ...
In December, the Federal Housing Finance Agency was set to increase the guaranty fees charged by the government-sponsored enterprises. However, Melvin Watt, the new director of the FHFA, put a hold on the planned g-fee increase and is taking a much more deliberate look at the fees, including a potential decrease in g-fees. The FHFA this month released a request for input regarding the g-fees charged by Fannie Mae and Freddie Mac, including questions about ...
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