The reverse mortgage industry is at odds with consumer advocates and the Consumer Finance Protection Bureau over a recent CFPB study, which claimed that consumers find reverse mortgages too complex and difficult to understand and that the risk of fraud and other scams persist. The latest dispute flared as reverse mortgage lenders and consumer groups responded to the CFPB’s request for information on abusive financial practices that affect elderly Americans. The comment period ended on Aug. 31. To assist its ongoing study of reverse mortgage transactions, the CFPB in July sought ...

The Department of Housing and Urban Development’s disciplinary arm hit 14 FHA-approved lenders with civil money penalties totaling $2.31 million for various violations of FHA regulations. HUD’s Mortgagee Review Board imposed the fines as a result of separate administrative actions against the lenders from Aug. 1, 2011, to Dec. 31, 2011. The MRB report, which was published in the Sept. 10 Federal Register, cited various offenses, including improper lending practices, failure to follow FHA origination guidelines, fraudulent reporting, failure to remit mortgage insurance premiums, failure to report ...

SunTrust Banks, Inc. is planning to shift $3 billion of loans, including an undetermined number of delinquent Ginnie Mae loans and other nonperforming loans, to its held-for-sale portfolio and record a $375 million provision for mortgage repurchases in the third quarter of 2012. The moves are expected to strengthen SunTrust’s mortgage portfolio and put the company in a better position by improving its risk profile and balance sheet and stabilizing its capital ratios. The $3 billion transfer of loans to the held-for-sale (HFS) category will include ... (1 chart)

An approved FHA lender in Brentwood, TN, is reporting a mini boom in its FHA refinance business, thanks to the FHA Streamline Refinance program. Churchill Mortgage, a provider of conventional and government-backed loans in 26 states, has reported a 540 percent increase in its FHA refi business through the agency’s streamline program. According to Matt Clarke, chief operating officer, Churchill Mortgage is expecting this year to top last year’s FHA refi production as well as its FHA streamline originations. In 2011, the company reported an estimated ...

Legislation was introduced this week in the House of Representatives that would effectively neutralize a proposal for local governments to use “eminent domain” powers to seize underwater mortgage loans and perform controversial modifications. Rep. John Campbell, R-CA, has introduced The Defending American Taxpayers from Abusive Government Takings Act, which would prohibit the FHA and VA from originating, insuring or guaranteeing a mortgage loan in jurisdictions that have invoked the power of eminent domain to seize a loan within the last 10 years. Fannie Mae and Freddie would be subjected to ...

The first six months of 2012 saw heightened activity in FHA’s Streamline Refinancing as borrowers scrambled to take advantage of the program’s lower insurance premiums. Streamline refi originations jumped 90.5 percent during the last two quarters compared to volume reported over the same period last year. Production rose 13.5 percent from the first to the second quarter. Volume increases have been amazing since the third quarter of last year, when lenders reported $4.7 billion in total streamline refi originations. Since that period, production leapfrogged to ... (1 chart)

The Department of Housing and Urban Development appears to have lost a round in its fight to bring an alleged FHA defrauder to justice. HUD suffered a setback recently after U.S. District Judge Gray Miller in Houston granted declaratory relief to Allied Home Mortgage Corp. (AHMC) to challenge HUD’s suspension of the lender’s authority to originate and underwrite FHA-insured loans. The Houston-based lender contends that HUD acted capriciously and arbitrarily without due process of law. It based these claims on ...

The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

The Department of Housing and Urban Development said it will step up its oversight of the department’s loan quality review to ensure that weaknesses, such as those uncovered in a recent internal audit, will not happen again. An audit performed by the agency’s Office of the Inspector General concluded that HUD’s Quality Assurance Division had adequate oversight of lenders’ compliance with FHA underwriting standards but for two loans that apparently eluded reviewers. QAD reviewers are required to ...

Industry trade groups last week gave the Department of Housing and Urban Development another nudge to lift the moratorium on investor participation in the FHA 203(k) property rehabilitation program. Following up on an industry request in June, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders in a joint letter to HUD reiterated the importance of the 203(k) program in reducing the current real estate-owned (REO) inventory and addressing the oversupply of housing. The groups said the program ...