Issuers delivered $8.1 billion of rural mortgage loans with a U.S. Department of Agriculture guarantee into Ginnie Mae pools during the first six months of 2016, according to an analysis of Ginnie data. Securitized USDA mortgages accounted for 1.3 percent percent of total MBS issued by Ginnie Mae during the period and comprised 2.5 percent of total loans originated during the six-month period. USDA-backed loan deliveries to Ginnie Mae in the second quarter rose 9.8 percent from the previous period. Year-over-year, issuance of MBS backed by rural loans fell 3.8 percent. USDA-backed mortgages require no downpayment. Over the first six months, the average credit score for rural borrowers was 688.1 and the average debt-to-income ratio was 34.9 percent. An estimated 93.2 percent of USDA loans originated during the period were purchase mortgages, 1.0 percent were refinances and the ... [ 2 charts ]
A California FHA lender could face monetary penalties totaling $242,828 for deficient mortgage underwriting and exposing the FHA insurance fund to increased risk of loss and fraud. A Department of Housing and Urban Development inspector general’s audit of Sun West Mortgage Co. of Cerritos, CA, also alleged unauthorized use of foreign staff in another country to “pre-underwrite” FHA loans. The audit was triggered by a complaint the IG Office received in November last year alleging that Sun West, an approved FHA lender since 1980, was not underwriting FHA loans properly. In addition, the complaint alleged that Sun West was having the loans pre-underwritten by a company in another country, in violation of HUD rules. Neither the company nor the country was identified in the audit report. The complaint further alleged that employees at Sun West shared user identification numbers for ...
An internal compliance audit has uncovered weaknesses in the FHA’s information systems that could expose the agency to hacking. The Department of Housing and Urban Development’s Inspector General recently issued an audit report indicating that FHA’s Single Family Insurance System (SFIS) and Single Family Insurance Claims Subsystem could be in danger of security breaches. However, the report withheld details of the audit, saying the findings were not for public disclosure. The report explained that the audit was part of the internal-control assessments required for the FY 2015 financial statement audit under the Chief Financial Officer’s Act of 1996. The audit’s objective was to provide an assessment of SFIS control compliance with HUD’s information-technology policies and federal IT system security and financial management requirements. The SFIS contains information on FHA borrowers, including ...
The FHA is seeking comment on proposals for revising the schedule of fees an agency-approved consultant may charge on a Section 203(k) property repair and rehabilitation mortgage. The agency wants public comment on whether fees charged by FHA 203(k) consultants should be based on the total cost of repairs, as they are currently, or on other metrics. Consultants charge varying fees on a standard 203(k) mortgage and a limited 203(k) mortgage. The standard FHA repair/rehab mortgage is designed for remodeling, rehabilitation and repairs that involve structural or more complex work that will cost more than $5,000. The limited 203(k) home loan is only for minor remodeling and non-structural repairs. An FHA-approved consultant is required for all standard 203(k) mortgages but not necessarily for a limited 203(k) home loan. FHA-approved 203(k) consultants who are placed on ...
The U.S. Department of Agriculture has issued guidance regarding voluntary short sales as well as the sale of real estate-owned properties in certain states. RD allows voluntary short sales by borrowers as well as the sale of REO properties at a discount, particularly to nonprofits and public entities providing transitional housing to reduce homelessness. For short sale acquisitions, the RD Customer Service Center (CSC) approves short sales for centralized states, according to the new guidance. Voluntary sales by borrowers to organizations may also qualify for non-program (NP) assumption financing. NP loan-assumption terms can be up to 30 years, the guidance stated. On the other hand, decentralized states are responsible for voluntary short sales and disposition of REO properties within their respective inventories, the guidance clarified. Qualified nonprofits and other entities that purchase REO properties for ...
Effective Oct. 1, 2016, the U.S. Department of Agriculture’s Rural Housing Service will reduce the one-time upfront funding fee for single-family housing guaranteed loans to spur rural home-loan financing. The RHS will cut the funding fee from the current rate of 2.75 percent of the loan amount to 1.0 percent. The agency notified lenders of the change last June. In addition, the fee for servicing USDA-guaranteed loans will decrease to 0.35 percent from 0.50 percent. That comes to about $30 per month per $100,000 in loan balance. The servicing fee is paid in 12 equal installments and rolled into the monthly mortgage payments. The RHS has raised both fees a number of times during the past several years to maintain the section 502 Single Family Housing program, which does not require borrowers to make any downpayment, and to avoid congressional appropriation. Last year, the RHS raised its upfront funding fee for a purchase loan, from 2.00 percent to 2.75 percent. Another reason the RHS cited for the fee reduction is that rural housing delinquencies and foreclosures are at historic lows.
Tennessee Lender Agrees to $70 million Settlement to Resolve Alleged FHA Violations. Franklin American Mortgage of Franklin, TN, has agreed to pay the federal government $70 million to resolve allegations of failing to comply with FHA requirements. Specifically, the direct endorsement lender allegedly engaged in improper underwriting of FHA loans between Jan. 1, 2006, and Dec. 31, 2012, which later resulted in submission of claims and substantial losses to the FHA insurance fund. Franklin entered into a settlement agreement with the Department of Justice and the Department of Housing and Urban Development’s Inspector General. As part of the settlement, Franklin acknowledged “it engaged in certain conduct in connection with its origination, underwriting, and quality control of certain single-family residential mortgage loans insured by FHA.” The settlement was neither an admission of ...
After a difficult year so far, sales of mortgage servicing rights are beginning to pick up a head of steam this fall with the hope that the fourth quarter could turn out be a barn-burner. According to interviews conducted by Inside Mortgage Finance this week, servicing advisors for the most part are feeling mildly optimistic about the final three months of the year, although they all admit the obvious: an unexpected drop in rates could spoil the party. But that may not...
A federal court in Texas has dismissed a disparate-impact lawsuit against the Texas Department of Housing and Community Affairs, finding, after years of litigation, that the plaintiff had failed to show sufficient reason for a charge of unlawful discrimination under the Fair Housing Act. The recent decision in The Inclusive Communities Project, Inc. v. The Texas Department of Housing and Community Affairs, et al., is the latest in a series of decisions applying the landmark U.S. Supreme Court decision that found disparate impact is a cognizable claim under the FHAct. The court’s Aug. 26 decision basically reaffirms...
RSS