A new California law requiring condominium homeowner associations to disclose to their members whether the VA or the FHA has certified their buildings will soon take effect.Starting July 1, 2016, California HOAs will have to disclose in their annual budget report whether or not their condominium projects have been approved for VA or FHA financing. Gov. Jerry Brown, D, signed Assembly Bill 596 into law in August last year to encourage more veterans and first-time homebuyers to purchase condominiums and take advantage of the benefits of government-backed home financing. In signing the measure into law, Brown expressed hopes that condominium HOAs will step up their certification or recertification process. Assemblyman Tom Daly, D-Anaheim, author of the bill, estimates there are 28,000 condo projects in the Golden State, and only a third are FHA-certified. There are far fewer projects that are ...
The Department of Veterans Affairs Home Loan Guaranty staff is reminding VA servicers of new title requirements taking effect this week for conveying properties to the VA. Under VA regulations, a conveyance or transfer of real property to the department is acceptable if the holders of the VA-guaranteed loan provide covenants or warranties against the acts of the holder and/or their agents. In addition, conveyances would be acceptable to the VA if it vests or entitles the agency to such title as is. In addition, the VA would take possession of collateral as long as it is acceptable to prudent lenders, informed buyers, title companies and attorneys in the community in which the property is located. However, the VA’s determination of clear and marketable title rests on state statutory requirements, the agency noted in its guidance. The VA is providing servicers a revised state-by-state list of ...
A federal district court in Illinois recently dismissed a putative class action against a foreclosure firm, holding that an allegation in a foreclosure complaint that the borrower is personally liable for any deficiency on an FHA-insured mortgage is not a violation of the Fair Debt Collection Practices Act. In Justin Gierke v. Codilis and Associates, the plaintiff obtained an FHA loan in 2013 and subsequently defaulted due to financial hardship. The defendant, a law firm, filed a foreclosure action in state court against the plaintiff in February 2015. The complaint identified the plaintiff, the borrower, as personally liable for any deficiency. The plaintiff responded by filing a counter-complaint against the defendant alleging violation of the Fair Debt Collection Practices Act. He alleged that the FHA “narrowly limits the circumstances under which a deficiency will be sought to cases where the borrower committed fraud or engaged in ...
The California Association of Realtors renewed its push for rules addressing the proliferation of FHA-insured mortgages that have Property Assessed Clean Energy super liens. In a recent letter to Office of Management and Budget Director Shaun Donovan, the CAR requested that both FHA and the Department of Housing and Urban Development adopt policy that is consistent with the Federal Housing Finance Agency’s existing policy on PACE liens. Specifically, such a policy would prohibit the use of PACE encumbrances with a “super lien” priority over mortgage financing. The group also urged HUD to issue guidelines directing FHA lenders and servicers not to place PACE liens above any mortgage insured by FHA. The CAR expressed concern about how PACE liens might affect the FHA Mutual Mortgage Insurance Fund, which is currently recovering from years of losses. “If the ..
Radian Guaranty has voiced its support for Fannie Mae’s updated Desktop Underwriter 10.0 and reiterated its ability to underwrite borrowers with non-traditional credit, one of the changes made in the latest version of DU. The Philadelphia-based private mortgage insurer said it is working on supporting MI applications for borrowers with nontraditional credit through other submission methods, including delegated submissions. Initially, applications will be accepted through MI Online’s “Quick Submit” option, or borrowers may fax or email their application and documents to intake@Radian.biz. Teresa Bryce Bazemore, president of Radian, said nontraditional underwriting is nothing new to Radian, which has maintained a small share of such loans. “We always had the ability to look at those loans and underwrite them manually,” she said. Besides nontraditional credit underwriting, the updated DU 10.0 includes ...
FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...
Mortgage lenders soon will be facing higher civil monetary penalties that may be imposed by federal agencies for violations of various lending, servicing and consumer financial protection laws and regulations, warned industry attorneys. As part of the budget bill signed into law last year, the Federal Civil Penalties Inflation Adjustment Act (FCPIAA) requires federal agencies to adjust the civil penalty amounts they charge for inflation by July 1, 2016. This will be followed be regular adjustments by January 15 of every year. The adjustments must be...
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