The Internal Revenue Service is preparing to launch an industry-wide review of housing counseling agencies, including those approved by the Department of Housing and Urban Development, as well as other tax-exempt entities that provide mortgage foreclosure assistance, compliance experts warned. In fact, the IRS has started looking at providers that have applied for tax-exempt status in recent months and has denied three organizations in February 2013 alone, according to attorneys with the Washington, DC, law firm Venable. Housing counseling agencies can use the issues raised in the “private letter” rulings as a ...

A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUD’s budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUD’s entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...

Legislation that would provide the FHA with tools to strengthen its finances and ensure its long-term solvency has been reintroduced in the House of Representatives. It is uncertain whether Republican leaders, given their concerns, would be willing to take up the Democrat-sponsored bill. The bill, the FHA Emergency Fiscal Solvency Act, would give the FHA more flexibility to take action against lenders that show excessive early default and claims rates. It would also authorize the FHA to require a mortgagee to indemnify the agency for improperly written loans. The bill’s co-sponsors, Rep. Maxine Waters, D-CA, and Rep. Michael Capuano, D-MA, hope for ...

Wells Fargo suffered a big legal setback after a federal judge denied its request to enforce a consent judgment under last year’s landmark $25 billion servicing settlement to prevent a New York lawsuit from proceeding. Judge Rosemary Collyer of the U.S. District Court for the District of Columbia rejected Wells Fargo’s argument that the new government suit filed in Manhattan district court was improper because it violated the consent judgment against Wells Fargo and flies in the face of the judgment’s “liability release” provision. Wells Fargo argued that the allegations in a civil mortgage fraud suit filed by ...

The federal prudential banking regulators should work closely with the CFPB in areas where their responsibilities overlap, such as credit card supervision and fair lending laws, Comptroller of the Currency Thomas Curry told attendees at the recent Federal Financial Institutions Examination Council’s Consumer Compliance Specialists Conference in Washington, DC. “In the area of overlapping supervisory responsibilities, one example that springs to mind involves credit cards,” Curry said. In the new world being fashioned by the...

Responding to industry concerns over the impact of the new loan officer compensation final rule on reverse mortgages, the Consumer Financial Protection Bureau has clarified the phrase “amount of credit extended” for closed-end Home Equity Conversion Mortgage loans. For closed-end reverse mortgages, a loan originator’s compensation may be based on either (a) the maximum proceeds available to the consumer under the loan; (b) the maximum claim amount (if the loan is subject to the Department of Housing and Urban Development’s HECM rules); or (c) the appraised value of the property, as determined by ...

The Federal Housing Finance Agency announced two key staffing changes this week, including the appointment of Sandra Thompson as deputy director of the FHFA’s Division of Housing Mission and Goals. Thompson will move from the Federal Deposit Insurance Corp. to the Finance Agency where she will oversee the FHFA’s housing and regulatory policy, financial analysis and policy research.She will join the FHFA in March after serving at the FDIC in various capacities over the past 23 years, most recently as director, Division of Risk Management Supervision.

Although it is far from settled that the FHA will raise its downpayment threshold from the current 3.5 percent, there is a growing fear among some lenders that Republicans in Congress might push for a 10 percent downpayment. If that happens, said David Lykken, managing partner of Mortgage Banking Solutions, Austin, TX, “it would bring HUD to its knees.” Lykken and others fear that anything north of 5 percent would hammer the market, in particular first-time homebuyers who use the program heavily for purchases as opposed to refinancings. “We need the FHA charter to help first-time buyers,” he said. How much of a downpayment hike certain House GOP members might demand will be ...

Competition in FHA lending may get a boost following the easing of reporting requirements for insured depository institutions with $500 million or less in total assets. The Department of Housing and Urban Development recently announced a policy change to eliminate a requirement for small supervised lenders and mortgagees to submit internal control and compliance reports under the FHA’s interim financial reporting rules. Independent mortgage companies, regardless of their asset size, are not covered by the exemption. A supervised lender or mortgagee is a financial institution that is a member of ...

Mortgage market observers say they are seeing a gradually building struggle by the Federal Housing Finance Agency to maintain its precarious balance between the FHFA’s congressionally-mandated roles as conservator to the GSEs and – indirectly – regulator of 65 percent of the mortgage market. Industry interests, meanwhile, continue to call for greater “transparency” surrounding Fannie Mae- and Freddie Mac-related decision making. Under the Housing and Economic Recovery Act of 2008, the FHFA was created to succeed the Office of Federal Housing Enterprise Oversight as regulator to Fannie and Freddie as well as the 12 Federal Home Loan Banks.