The Department of Housing and Urban Development is seeking additional authority from Congress to transfer FHA mortgage servicing in order to facilitate loss mitigation. The change would allow the FHA to require specific actions when a servicer is underperforming or has a low score on HUD’s Tiered Ranking System, including the transfer of servicing to an FHA-designated special servicer or requiring a servicer to enter into a sub-servicing agreement. With expanded powers, the FHA also may require a servicer to engage a third-party to assist in loss mitigation services. Such authority would enable the FHA to better avoid losses due to poor servicing and, thus, protect the MMI Fund, HUD said. Testifying before a Senate appropriations subcommittee, FHA Commissioner Carol Galante noted...
“Confusion and uncertainty around representations and warranties standards continue to cause lenders to add their own overlays to the existing GSE credit standards,” said MBA vice chairman Bill Cosgrove.
The expanded system would include a more comprehensive method for measuring lenders’ loss mitigation activities as well as their compliance with FHA’s default servicing requirements.
Fed Chairman Ben Bernanke indicated that the central bank is leaning toward scaling down its MBS purchases later this year, and that rapidly rising mortgage interest rates don’t pose a major threat to the fledgling housing recovery.
The Supreme Court of the United States announced this week that it will hear a legal dispute that would determine whether the Fair Housing Act – and perhaps, by extension, the Equal Credit Opportunity Act – permit claims under the “disparate impact” theory of discrimination. “The threshold issue on appeal is whether plaintiffs may use disparate impact to allege a violation under the Fair Housing Act rather than proving liability by demonstrating an actual intent to discriminate,” explained attorneys with the Dykema Gossett law firm. In Township of Mount Holly, New Jersey v. Mt. Holly Gardens Citizens in Action, the plaintiff citizen group is challenging...
The chief enforcer of a massive settlement involving five top servicers portrayed the results of the most recent round of compliance testing as confirmation of issues that need to be “rectified” and the need for holding servicers accountable. Shaun Donovan, secretary of the Department of Housing and Urban Development, said the failure of the five servicers on eight compliance tests shows that “abuses shamefully endure.” He put the companies on notice that they would face monetary penalties if they don’t comply. The report from the Office of Mortgage Settlement Oversight did show...
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