The Department of Housing and Urban Development this week announced a major expansion of bulk sales of distressed FHA loans. Some 9,000 loans are up for auction on Sept. 12, nearly double the amount HUD initially expected to offer and four times the amount of loans sold through the Distressed Asset Stabilization Program since 2010. In April, HUD completed an auction of 279 FHA mortgages with an unpaid principal balance of $59.0 million. If the loans for sale in September have a similar average balance ...

The Department of Agriculture issued a final rule last week to implement a new annual fee for the Rural Housing Service Section 502 Single Family Housing Guaranteed Loan Program. The fee applies to all RHS Section 502 loans with a conditional commitment dated on or after Oct. 1, 2011. The fee for fiscal year 2012 is 0.3 percent and the USDA noted that the fee for subsequent years is subject to change, with a fee of up to 0.5 percent allowed. The fee – along with the up-front guarantee fee already charged by the USDA ...

Ten previously optional fields on the FHA’s TOTAL Scorecard will be required with the release of TOTAL Scorecard Version 3.0. Some pending applications will be “grandfathered” under the previous TOTAL Scorecard requirements for 90 days. The new required fields are: borrower paid closing costs, current housing expenses, gift letter amount, gift letter source, required investment, total closing costs, total fixed payment, seller concessions, downpayment and condominium indicator. The new version of the scorecard ...

Record low interest rates and loosened underwriting guidelines have induced strong refinance activity during the first half of 2012. Industry participants agree that the refi boom will continue through the third quarter of 2012, but then predictions get hazy. During Wells Fargo’s earnings presentation for the second quarter last week, Timothy Sloan, a senior executive vice president and CFO at the bank, downplayed suggestions that refi activity has declined this month compared with June. “The business is good and we’re optimistic about it,” he said. “Very optimistic,” added...

Thousands of ineligible tax cheats received FHA-insured mortgage loans under the American Recovery and Reinvestment Act of 2009 even though federal tax regulations prohibited tax debtors from obtaining government-backed mortgages, the Government Accountability Office reported in a new study. The report found that 6,327 borrowers, who owed a total of $77.6 million in federal taxes, were able to obtain more than $1.44 billion in FHA-insured mortgages under the ARRA. Of these borrowers, 3,815 individuals claimed and received $27.4 million under the statute’s temporary First-Time Homebuyer Credit program. The GAO’s analysis included ...

Some FHA borrowers are still having difficulty obtaining lower-cost streamline refinancing even though the FHA has said it will accept streamline loans with “no credit check, income verification or appraisal.” Borrowers said they are still encountering credit checks, income verification and other obstacles, which indicate that lenders are disregarding FHA instructions regarding the enhanced streamline refi program. Even though FHA guidelines are in place, lenders are adding their credit overlays to the detriment of FHA borrowers seeking to ...

Given the features of the enhanced FHA streamline refinancing product, investors will be focusing on the FHA low mortgage-insurance premium (MIP) pools in the coming months, according to analysts with Barclays Research. Barclay’s analysts estimate that 27 percent of outstanding Ginnie Mae MBS pools are eligible for streamline refinancing, which could translate to $36 billion in new annual Ginnie Mae issuance. Approximately $293.0 billion of Ginnie Mae’s $1 trillion-plus 30-year loan pools were originated before May 2009, analysts said. About 79 percent of the collateral underlying the pools are ...

The Consumer Financial Protection Bureau expects to undertake a project to refine and integrate disclosure requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act for reverse mortgages to improve consumers’ understanding of the product. The In a recent 231-page study submitted to Congress, the CFPB said consumers are still confused about how reverse mortgages work, despite the required disclosures and industry efforts to educate the public on this type of equity-based lending. The rising-balance and falling-equity nature of reverse mortgages is particularly ....

The Department of Housing and Urban Development said it has received $1.2 billion in recent settlements with large mortgage lenders and servicers but HUD’s internal watchdog, which did much of the legwork in the investigations, reveals a much smaller amount. According to recent audit reports published by HUD’s Office of the Inspector General, only Bank of America and Flagstar Bank have made payments under settlement agreements with HUD and the Department of Justice to resolve government claims. In separate memos to HUD’s Office of General Counsel last month, Kim Randall, director of the HUD OIG Civil Fraud Division, sought clearance to ...

Two lenders lost their approval to underwrite and originate FHA loans under Credit Watch while two others may be ordered to indemnify the Department of Housing and Urban Development for potential losses on several ineligible FHA-insured loans. HUD recently stripped Community Central Mortgage Co. of Mount Clemens, MI, and Strategic Mortgage Co. of Columbus, OH, of their direct endorsement approval because of the exceedingly high default and claim rates of FHA-insured loans they originated in their business areas. The Credit Watch Termination Initiative allows HUD to terminate a direct endorsement agreement with any FHA lender if ...