A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...

Increased efforts by mortgage companies to educate loan officers about VA loans have helped push VA originations to new heights. Production of loans guaranteed by the Department of Veterans Affairs continued its upward trend in the first quarter of 2012, up 10.3 percent from the previous quarter, according to Inside FHA Lending’s analysis of VA data. On a quarterly basis, volume rose to $28.3 billion in the first quarter from $25.6 billion in the fourth quarter and from $20.7 billion (36.7 percent) in the third quarter. The top 25 lenders combined for ... [with 1 chart]

The focus on foreclosure documentation on forward mortgages has set the stage for similar scrutiny on reverse mortgages, and the extra documentation required in a reverse mortgage adds to this challenge, according to compliance experts. In a recent legal analysis, Christopher Willis and Mercedes Kelly Tunstall, litigation attorney and of counsel at the Washington law firm Ballard Spahr, respectively, said reverse mortgage lenders and servicers could avoid many of the problems encountered by forward mortgages by examining their foreclosure process carefully and learning from ...

The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUD’s new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...

The FHA and Ginnie Mae continue to face risk-management challenges despite steps they have taken to better assess, manage and minimize risk, according to an updated report from the Government Accountability Office. The report said recommendations the GAO made in a previous assessment to improve risk management have not been fully implemented at either of the agencies. Both agencies, however, said efforts are underway to implement GAO recommendations. The FHA is getting more scrutiny from Congress because of the weak condition of the Mutual Mortgage Insurance Fund, whose capital reserve ratio has ...

The Department of Housing and Urban Development has announced discrimination settlements with two mortgage lenders accused of denying FHA mortgage loans to expectant mothers. Two women filed separate complaints against Magna Bank in Nashville, TN, and Home Loan Center in Irvine, CA, alleging a violation of the Fair Housing Act. According to the complaints, the women’s loan applications were rejected because they were pregnant and temporarily on leave. The settlement agreement with Magna Bank requires the bank to pay the complainant $14,085 for allegedly ...

The Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac mortgages has accelerated sharply in the first quarter of 2012, according to a new analysis and ranking by Inside Mortgage Finance. Based on loan-level data on mortgage-backed securities issued by the two government-sponsored enterprises during the first quarter, HARP activity surged to a record 180,572 loans in the first three months of the year. That was up 93.8 percent from the fourth quarter of 2011, and it featured a huge 56.3 percent jump in activity from February to March. Total HARP activity...(Includes one data chart)

Certain watchdog agencies of the federal government have expressed concern to Congress about whether additional steps already taken by the FHA and Ginnie Mae to improve their risk management are sufficient to avert potential government intervention. A recent study by the General Accountability Office and testimony by Department of Housing and Urban Development Inspector General David Montoya before a House panel have raised questions about the financial stability of the FHA and Ginnie Mae and their ability to respond to a major financial crisis. Both the GAO and Montoya concluded that the two agencies...

Department of Housing and Urban Development.Federal Deposit Insurance Corp.Federal Reserve.Office of the Comptroller of the Currency.Treasury Department/SIG-TARP.Some Nominees Pass; Two Don’t. The full Senate has unanimously confirmed Martin Gruenberg, Thomas Hoenig, and Jeremiah Norton to be members of the FDIC Board of Directors, and Thomas Curry to be the Comptroller of the Currency, after all four had ...

Ginnie Mae has seen a huge increase in business volume and appears to have adequate reserves, but the agency is still hamstrung by the federal budget process and has work to do to improve its risk management, according to a new Government Accounting Office report. With $1.186 trillion in single-family MBS outstanding and $301.7 billion in new issuance just last year, Ginnie is nearly as big as Freddie Mac – minus the retained portfolio. But the agency has a relatively small staff of full-time employees and has to get around the federal budget process by using business revenues to hire...