Two nonbanks in Salt Lake City recently joined a growing list of FHA lenders paying substantial penalties to resolve False Claims Act lawsuits brought by the Department of Justice.Primary Residential Mortgage Inc. and SecurityNational Mortgage Co. have agreed to pay nearly $10 million to settle charges they knowingly originated and underwrote loans that were ineligible for FHA insurance. So far, the Department of Housing and Urban Development has reported more than $29.6 billion in FCA and Financial Institution Reform, Recovery and Enforcement Act settlements with FHA lenders since 2014. Portions of the settlement funds were used to help strengthen the FHA Mutual Mortgage Insurance Fund. As part of the settlement, both PRMI and SecurityNational Mortgage Co. admitted they endorsed loans that did not meet FHA requirements. Both companies are direct endorsement lenders in the ...

Norwich Commercial Group has launched a new division, Military Direct Mortgage, to focus exclusively on VA direct-to-consumer lending. Based in Avon, CT, just down the road from its parent company, Military Direct opened for business in August this year and the timing could not have been better. In September, issuance of securities backed by VA loans totaled $22.3 billion, up from $18.1 billion in August, according to Ginnie Mae data. VA loan originations saw a 17.4 percent increase in the third quarter from the previous quarter, and were up 22.3 percent over the nine-month period compared to last year. VA purchase-mortgage volume for September totaled $9.9 billion, up after a slight drop in August. Purchase-mortgage activity also improved by 26.1 percent in the third quarter, and by 16.5 percent year-over-year. VA refinance volume featured a huge 34.0 percent increase in ...

The Department of Housing and Urban Development inspector general, over the last several weeks, has reported a series of final civil actions that resulted in an enforcement action or monetary settlement between an FHA lender and the federal government. On Oct. 6, the IG announced the results of an audit of TXL Mortgage Corp., a direct endorsement lender, in Houston. The audit found TXL in violation of HUD requirements and that it had no acceptable quality-control plan in place. Specifically, 16 of the 20 sample loans the IG reviewed did not comply with HUD standards. Of the 16 loans, eight had significant underwriting defects and failed to qualify for FHA mortgage insurance. Two loans qualified but were over-insured, according to the report. As a result, TXL exposed HUD to more than $713,000 in unnecessary insurance risk and caused the department to incur more than ...

A glitch in the federal government’s Servicemembers Civil Relief Act website that had been churning out false verifications of soldiers’ active-duty status has been fixed, the Defense Manpower Data Center of the Department of Defense has announced.The bug responsible for the false negative results was removed after rendering the website inoperable for several days. The DMDC is urging active servicemembers to re-run their SCRA certificate requests if they have reason to doubt any negative results returned by the website. The DMDC shut down the website temporarily on Oct. 4 making it impossible for mortgage lenders to verify their or their vendor-partners’ compliance with the SCRA. The statute provides certain protections from civil actions against servicemembers who are called to active duty. It restricts or limits actions against active-duty military personnel in areas such as mortgages, rental and lease agreements, credit-card interest rates, tax liability, lawsuits and other debt obligations. The SCRA certificate provides information only for the purpose of verifying an individual’s active-duty status for a given time period to ...

One of the key documents VA lenders require veteran borrowers to submit is the certificate of eligibility (COE). A VA loan application will not move forward without a COE, a requirement for any active-duty servicemember or veteran seeking to take advantage of the VA’s home-loan guaranty program. The COE verifies to the lender a loan applicant’s eligibility for a VA loan. The evidence a lender might require depends on the nature of the applicant’s eligibility. Veterans and current or former National Guardsmen or reservists who have been called to active duty must submit DD Form 214. The form would show the character of service and the reason for separation from the service. Active-duty servicemembers must submit a current statement of service signed by a superior, the unit commander or the adjutant, higher headquarters or the personnel office. The statement must contain the ...

The Department of Veterans Affairs is reminding servicers that it does not issue “no-amount-specified bids,” commonly known as VA “no-bids,” on pending loan terminations. A regulatory change in 2008 allowed VA only two bid types: net value bid and total debt bid. Prior to the change, when VA issued a no bid, servicers were barred from conveying the property to VA following a completed termination action. A allows servicers the option to convey property to VA on loans that have been terminated through foreclosure or deed-in-lieu of foreclosure. The option to convey reduces additional mortgage-industry expenses associated with missed foreclosure sales, maintenance and marketing of properties that could not be conveyed, the VA explained. Other servicer news from the VA Loan Electronic Reporting Interface (VALERI): Oregon Appraisals. Effective Sept. 1, 2016, all Oregon liquidation ...

Mortgage credit availability increased in September as more investors offered streamlined refinancing programs to borrowers with FHA and U.S. Department of Agriculture rural housing loans, according to the Mortgage Bankers Association’s mortgage credit-availability index (MCAI) report. The government MCAI, one of four component indices of the trade group’s MCAI, saw the greatest increase in availability over the month (up 1.9 percent). Conventional MCAI also was up 0.7 percent and so was the conforming MCAI by the same percentage. The jumbo MCAI rose by 0.6 percent. The increases reflected an improvement in the MCAI, which grew 1.4 percent to 167.0 in September. A drop in the MCAI indicates a tightening of lending standards, while an increase suggests loosening of credit, the MBA said. “Streamline [refinancing] programs allow borrowers who have been consistently making their ...

VA Special Relief Following Hurricane Matthew. VA encourages holders of guaranteed loans to extend forbearance to borrowers in areas that were ravaged by Hurricane Matthew. Careful counseling with borrowers is recommended to help determine whether their difficulties are related to the hurricane or to some other cause that needs to be addressed. Lenders may reapply prepayments to cure or prevent a loan default, or modify the terms of an existing guaranteed loan without the prior approval of VA, provided certain regulatory conditions are met. In addition, VA has requested lienholders institute a 90-day freeze on all new foreclosures on loans affected by Hurricane Matthew. Lienholders must review all foreclosure referrals to ensure that servicers are justified in delaying foreclosure action. Further, the VA asked servicers to waive late charges and to suspend credit bureau reporting on ...

The Department of Housing and Urban Development’s inspector general urged the agency to revise regulations to avoid the possibility of another multi-billion dollar hit to the FHA insurance fund due to servicers missing their foreclosure or conveyance deadlines. According to a recent IG audit report, HUD paid approximately $2.23 billion in claims for an estimated 239,000 properties that missed foreclosure and conveyance deadlines. In particular, HUD paid an estimated $141.9 million for servicers’ claims for “unreasonable and unnecessary” debenture interest as well as $2.09 billion in servicer claims for holding costs incurred after the deadlines for foreclosure or conveyance had lapsed, the report said. Because of these exorbitant claims payments, the FHA’s Mutual Mortgage Insurance Fund became...

Back in August, Incenter Mortgage Advisors auctioned off one of the largest bulk packages of Ginnie Mae servicing rights in quite some time: An $8.87 billion pool of receivables…