The FHA has issued guidance on acceptable timetables in every state for completing the foreclosure process as well as for other procedural changes for forward and reverse mortgages. FHA regulations require that, when foreclosure of a defaulted loan becomes necessary, mortgage servicers “must exercise due diligence” in carrying out the foreclosure and in acquiring title to and possession of the property. The updated reasonable-diligence time frames will take effect for all cases in which foreclosure is initiated on or after Jan. 1, 2016. The reasonable diligence period begins with the first legal action required by the jurisdiction to start foreclosure and ends upon the acquisition of a good marketable title and possession of the property. The FHA expects servicers to comply with all federal, state and local laws when prosecuting foreclosures and possessing properties backing ...

The VA loan is a great option for veterans and servicemembers looking to purchase a new home. However, did you know it could also be paired with other home-financing programs to give the borrower a bigger bang for the buck? For instance, many real estate brokers and mortgage lenders are unaware that the VA loan can be used with certain products offered through state housing finance agencies to provide greater benefits to veterans and members of the military. The Colorado Housing and Finance Authority (CHFA) offers a tax credit program that allows VA borrowers to claim a percentage of the annual mortgage interest paid each year as a federal tax credit on their federal income tax returns. “It is not a tax deduction,” said Chad Patterson, a real estate agent with RE/MAX Traditions in Longmont, CO. “This can be a huge asset to the ...

The Department of Housing and Urban Development’s Inspector General has slammed Ginnie Mae for understating the severity of misstatements in prior year financials. In a memorandum, the HUD IG said Ginnie Mae’s inadequate disclosures in a restatement notification did not help users of financial statements understand the full impact of the material misstatements. The reporting errors were identified in an IG audit of Ginnie’s fiscal year 2014 financial statements. According to the IG, the misstatements in the 2014 audit were due to improper accounting for FHA’s reimbursable costs and the flawed accounting treatment and inadequate disclosure of borrowers’ mortgage escrow funds held in trust by Ginnie in its defaulted issuers’ portfolio. These errors may have affected Ginnie Mae’s prior year financial statements as far back as FY 2011, the IG concluded. In its audit report, the IG ...

Michaelson, Connor & Boul has reached the end of its term as mortgage compliance manager (MCM) of the Department of Housing and Urban Development. Sept. 30, 2015, was MCB’s last day as mortgage compliance manager, in charge of processing millions of pre- and post-conveyance transactions for HUD. MCB won the contract as HUD’s first national MCM in 2010, when the department reorganized its management and marketing(M&M) programs under a new M&M III. However, even before that, since 1999, MCB had been performing real estate acquisition and disposition services for HUD under the previous M&M programs. As mortgage compliance manager, MCB had a bird’s eye view of every lender’s (and their service provider’s) business practices when performing pre- and post-conveyance activities. As of Aug. 31, 2015, MCB had processed 4,162,550 pre- and post-conveyances. As MCB makes ...

Government Files False Claims Act Suit Against FHA Lenders, “Counseling Fund.” Three federal agencies filed a civil lawsuit against a purported charitable “counseling fund” and five FHA-approved mortgage lenders and their principals for running a mortgage scam that resulted in a huge loss for the FHA. The suit alleges that Rainy Day Foundation, a tax-exempt charitable institution in the District of Columbia, and five New York-based banks defrauded several federally insured banks resulting in millions of dollars of mortgage losses and costing the FHA $5.6 million in paid false claims. According to the complaint, the lenders originated FHA loans, which they later sold to the victimized banks. The loans went into early-payment default (EPD) at twice the average default rate of other lenders. The lenders allegedly conspired with the Rainy Day foundation to conceal their ...

Fannie Mae and Freddie Mac securitized $59.07 billion of single-family loans with private mortgage insurance coverage during the third quarter of 2015, reflecting the increase in purchase-mortgage production, according to a new analysis and ranking by Inside Mortgage Finance. The flow of PMI-insured loans to the government-sponsored enterprises’ mortgage-backed securities program was up 12.3 percent from the second quarter, and it was likely the biggest such volume since the housing market collapsed in 2008. The data come from loan-level MBS disclosures, which Fannie started providing in 2013. The increased volume of privately-insured mortgages came...[Includes two data tables]

The Consumer Financial Protection Bureau’s new guidance on mortgage services agreements has given the industry little confidence about such arrangements and likely helped push another major lender, Bank of America, to shutter its MSA ventures. BofA decided to the pull the plug on all marketing services agreements it has with realty firms, including RE/MAX. The bank told IMFnews, an affiliated daily service, that it will discontinue all “space rental agreement programs due to recent regulatory developments.” Its MSA agreements will end...

Ginnie Mae has expressed concern about the influx of nonbanks into its MBS program and their ability to remain as active participants.

“We are hopeful this lawsuit will be resolved quickly so the fee waiver is granted, the data we seek is produced by HUD and the public is granted access to this important information,” the CRC said.

The mortgage refinance business began losing steam in the third quarter, but purchase-mortgage lending helped sustain agency single-family MBS production during the period, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to issue $351.70 billion of single-family MBS during the third quarter of 2015, a slight 0.3 percent decline from the previous period. Even with the slowdown, year-to-date agency MBS volume of $976.40 billion had already topped the $929.49 billion in gross issuance for all of last year. The bright spot was...[Includes two data tables]