The Federal Communications Commission has issued a baffling final rule restricting the way servicers can collect on or service student loans, mortgages and other debts owed to the federal government.Specifically, the rule implements a key provision in the Bipartisan Budget Act of 2015 amending the Telephone Consumer Protection Act to exclude robocalls from the TCPA consent requirement if they are made solely to collect a debt owed to or guaranteed by the federal government.The TCPA generally requires a caller to obtain “prior express consent” from the call recipient before making a telemarketing call or an auto-dial call to the recipient’s landline or cell phone.However, the mortgage industry raised concerns that TCPA’s consent requirement could create potential liability for important servicing calls that could help homeowners save their homes, which prompted Congress to pass the Budget Act amendment. Last month, the FCC specifically excluded the federal government from the TCPA’s consumer protections by ruling that the government is not a “person” subject to the TCPA. Here is where the FCC rule gets confusing. commission is authorized to adopt rules to “restrict or limit the number and duration” of any wireless calls to collect debt owed to the federal government.”
Major industry trade groups are asking FHA and VA to suspend proposed guidelines for energy-improvement loans and give stakeholders an opportunity to comment. In a joint letter, 11 trade groups warned that the proposed agency guidelines regarding Property Assessed Clean Energy (PACE) loans raises serious concerns that must be resolved before implementation of any PACE guidance. Prior to the issuance of the new guidelines, both FHA and VA prohibited the financing or refinancing if there was a lien other than the FHA-insured or VA-guaranteed mortgages. PACE programs are available in 19 states but most are in California. They provide financing for home improvements and clean-energy upgrades that would result in more efficient use of water and electricity, and ultimately savings for homeowners. The PACE obligation is repaid through a property-tax assessment, which takes a ...
An FHA Title II lender in Atlanta is in trouble with the Department of Housing and Urban Development’s inspector general for not implementing FHA’s Home Affordable Modification Program (HAMP) in accordance with HUD’s requirements. As a result, HUD paid more than $1.1 million for 138 loans that were not eligible for modification under the FHA-HAMP. The lender, Georgia Housing and Finance Authority, could be facing $1.42 million in indemnifications and reimbursements because of its actions. The state housing finance agency provides low- and moderate-income people safe and affordable rental housing, and acquires and maintains housing for homeownership. Proceeds from the sale of mortgage revenue bonds, as well as federal and state allocations, fund its housing programs. GHFA also uses bond proceeds to purchase mortgages, which are serviced by mortgage affiliate. The cash flow from the ..
The FHA has announced new streamlined procedures to help delinquent homeowners avoid foreclosure and stay in their homes. The agency is revising loss-mitigation procedures servicers use when evaluating and choosing the best home-retention options for delinquent borrowers by reducing waiting time for results. The new streamlined procedures are designed to enhance servicers’ ability to evaluate foreclosure-avoidance alternatives, especially for the FHA-Home Affordable Modification Program (FHA-HAMP). Specifically, FHA will require servicers to convert successful three-month trial modifications into permanent modifications within 60 days instead of the average four to six months. Borrowers who have three missed mortgage payments would be able to opt for a partial claim to bring their arrearages current versus the previous four-month minimum. In addition, the FHA will eliminate the ...
The Department of Housing and Urban Development has issued a final rule aimed at improving its single-family property disposition program and minimizing losses to the FHA Mutual Mortgage Insurance Fund. The rule consolidates and reorganizes agency regulations pertaining to asset disposition to better reflect industry standards and enable HUD to get the greatest value for its real estate-owned properties. The goal of the asset disposition program is to shrink HUD’s REO inventory and at the same time reduce MMIF losses. The final rule mostly mirrors the proposed rule HUD published for comment in October last year. The department said it has made no substantive changes to the proposed draft. The codified changes include limiting the provision of settlement-cost assistance to owner-occupants. The final rule eliminates HUD’s obligation to pay the broker’s sales commission and clarifies that settlement-cost assistance is only available to owner-occupant purchasers and not investor purchasers. In addition, the ...
African-American homeowners in New York City are seeking certification of a class action alleging that the government’s distressed-loan sale program discriminates against black homeowners. The suit alleges that black FHA homeowners in default are disproportionately affected by the Department of Housing and Urban Development’s note sale program and the subsequent “predatory” mortgage servicing. HUD Secretary Julian Castro, FHA Commissioner Ed Golding, Caliber Home Loans and U.S. Bank Trust were named defendants in the lawsuit filed in the U.S. District Court for the Eastern District of New York. The defendants’ business practices allegedly violated the plaintiffs’ due-process rights as well as the Fair Housing Act. Under the note sale program, delinquent FHA mortgages are pooled and auctioned off to the highest bidder. According to the plaintiffs, the bidders are usually private-equity firms or ...
Mortgage Company President Charged with Defrauding Ginnie Mae. Robert Pena, president and founder of the now-defunct Mortgage Security Inc., was charged in federal district court in Boston for allegedly bilking Ginnie Mae out of nearly $3 million. MSI was an approved participant in the Ginnie Mae mortgage-backed securities program, pooling eligible single-family mortgages and selling the securitized products to investors. The firm also serviced the underlying loans. In 2011, Pena allegedly began diverting borrower payments and huge loan-payoff amounts into secret accounts, which he used to fund personal and business activities. Likewise, he is said to have funneled borrowers’ escrow funds and mortgage-insurance premiums into other personal accounts. In total, Pena pocketed $3 million due Ginnie Mae, which had to pay investors whose investments it had guaranteed, according to the ...
The Federal Communications Commission has refused an industry request to exempt mortgage servicing calls from prohibitions against the use of “robocalls,” or automated dialing and calling systems, to contact delinquent borrowers on their cell phones. In a long-awaited final rule limiting the way servicers can collect on student loans, mortgages and other debts owed to the federal government, the FCC said it would not make a decision on whether the statutory exemption from the Telephone Consumer Protection Act’s “prior express consent” requirements applies to Fannie Mae and Freddie Mac loans or their servicers. The TCPA and FCC regulations require...
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