Lenders must consider debt disputes, collection accounts and judgments in analyzing a borrower’s credit worthiness because they are indicators of the borrower’s ability and willingness to meet his or her credit obligations, according to the FHA. In recently issued guidance, the FHA said lenders should analyze all collections and judgments, past and present, because they may indicate a borrower’s disregard for credit obligations. Such analysis helps decide whether a loan should be approved for FHA insurance, the agency said. The FHA amended its guidance on collections and disputed accounts in Mortgagee Letter 2013-24, and further clarified ...
The sale of residential mortgage servicing rights (MSRs) tied to Ginnie Mae mortgage securities is gathering steam with a handful of large deals currently in the market. Bank of America recently held an auction for $22 billion of legacy Ginnie MSRs, according to investment bankers familiar with the offering. Final bids were being taken this week. A winner has yet to be declared. A spokesman for BofA told Inside FHA Lending that in general the bank does not comment on MSR sales, though it has made exceptions when unloading very large packages. Earlier this year, for example, it sold just over ...
Fannie Mae is lowering its maximum loan-to-value ratio to 95 percent come November, and there is speculation that the decision could force some of that business over to FHA. The policy change was confirmed by the GSE when it sent out an update to users of its automated processing program, Desktop Underwriter. It also means that mortgage insurers could lose business at a time when many have shown a new willingness to take on more credit risk amid improving delinquencies and earnings. Mark Goldhaber, a former executive at Genworth Financial, which owns an MI company, told ...
Cancelled Furlough Days. The Department of Housing and Urban Development has reduced the number of furlough days from seven to five days due to progress made in achieving the $69.6 million spending cuts mandated by sequestration. In this regard, previously scheduled furlough days of Aug. 16 and Aug. 30 are cancelled. As the end of FY 2013 approaches, HUD is making significant progress towards reaching its sequestration target, without needing additional furlough days, said Deputy Press Secretary George Gonzalez of HUD’s Office of Public Affairs. Government-wide automatic spending cuts became effective ...
The Department of Housing and Urban Development, as expected, recently asked a federal district court in Washington, DC, to stay further proceedings in American Insurance Association vs. HUD, a disparate impact case, while the Supreme Court of the United States considers Township of Mount Holly v. Mt. Holly Gardens Citizens in Action. “In substance, Mount Holly presents the same issue of statutory interpretation that plaintiffs seek to litigate in the above-captioned action: namely, whether a disparate impact theory...
As feared by the residential finance industry, an increase in upfront mortgage insurance premiums is hurting participation in the FHA program by first-time buyers.
The CFPB, HUD and the Department of Justice have all gone on record asserting that disparate impact claims are viable under the Fair Housing Act and the Equal Credit Opportunity Act.
Currently, FHA requires a waiting period of two years in bankruptcy cases and three years after a foreclosure or short sale before a borrower can apply for an FHA loan.
Plans by officials of the city of Richmond, CA, to make a controversial use of eminent domain to seize underwater mortgages, rework their terms and stiff MBS investors for the resulting losses suffered two major blows in recent days as two federal regulatory agencies that play a critical role in the nation’s mortgage finance system intensified their opposition. This week, the Department of Housing and Urban Development, in response to a joint inquiry by three California Republicans on the House Financial Services Committee, said it cannot guarantee that any mortgage seized through eminent domain would be approved for an FHA-insured refinance – a central pillar in the eminent domain proposal developed by Mortgage Resolution Partners. “Pending legal developments and possible further execution of the plans in question, HUD does not know...
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