Over the past few weeks, an unconfirmed rumor was making the rounds that Bank of America would once again begin securitizing newly originated mortgages through Fannie Mae. But a quick check with both parties indicates that the “cold war” between the two isn’t likely to thaw anytime soon. Terry Francisco, a spokesman for BofA said the bank is only selling Home Affordable Refinance Program loans to Fannie. The bank, he noted, discontinued securitizing newly originated non-HARP loans through the government-sponsored enterprise in 2012. According to figures compiled by Inside MBS & ABS, over the past three years almost all of the non-refinance activity between the two has centered...

The Securities and Exchange Commission recently loosened risk-retention requirements somewhat for collateralized loan obligations, giving in to requests from industry participants. Risk-retention requirements for non-residential securitized products, including CLOs, take effect Dec, 24, 2016. Federal regulators issued a final rule for risk-retention requirements in October 2014 and CLO industry participants have been working since then to try and get regulators to address issues created by the final rule. In mid-July, Crescent Capital Group wrote...

FHA/VA lender Castle & Cooke Mortgage is embarking on a major expansion that could boost their standing in the government-backed market if things work out as planned. The Salt Lake City-based retail lender is in the midst of an aggressive expansion plan to be in 48 states by the end of 2016, according to Adam Thorpe, who was named president and chief operating officer in late 2014. C&C’s government-backed lending activities are mostly in the West with licenses to operate in 18 states. Recently the company, which entered the mortgage market in 2005, opened a new branch office in Anaheim, CA, bringing to 36 the number of C&C branch offices across the country. Orange County and the Southern California housing market are among the priciest in the nation, and the high demand and lower inventory in those areas can be good for government and ...

Department of Housing and Urban Development program staff and the agency’s inspector general are reportedly at loggerheads over an IG recommendation to deny FHA insurance to loans that receive downpayment assistance from programs funded through premium-pricing mechanisms. Responding to critics, the HUD OIG is standing by its audit findings, which could force the HUD deputy secretary to intervene in order to resolve the issues raised by the audit report and restore lender confidence. The report’s recommendation has alarmed lenders that participate in downpayment assistance “gift” programs run by housing finance agencies (HFAs). This prompted Ed Golding, HUD’s principal deputy assistant secretary for housing and head of the FHA, to issue a clarification of the FHA’s position on the issue. Golding’s note reaffirmed FHA’s support for certain downpayment assistance programs (DAPs), “like those run by ...

The Department of Housing and Urban Development’s proposal to remove a key disclosure in a standard HUD/VA form that comes with a residential mortgage closing document is getting flak from the mortgage industry and from some members of Congress. Leading Democrats on the Senate Banking and House Financial Services committees are pushing HUD to reconsider the proposal. They fear the proposed change would make it easier for lenders that have engaged in criminal behavior to re-enter the FHA and VA markets and continue their illegal lending practices. Among other things, HUD’s proposal would eliminate the requirement that FHA lenders certify on each loan application that they are not, or have not recently been, subject to certain charges or penalties. In their letter, Senators Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, urged HUD to ...

A multi-million dollar false claim lawsuit filed by the Department of Justice against Wells Fargo in 2012 appears headed to trial unless both sides agree to renegotiate a settlement. Brought under the federal False Claims Act, the lawsuit has moved on to the discovery phase of the litigation following a failed attempt by the parties to reach a settlement. The DOJ has wielded the FCA effectively in the past couple of years in efforts to recover losses from lenders that allegedly committed loan fraud against the FHA. A string of FCA lawsuits against FHA lenders has resulted in approximately $4.5 billion in recoveries for the government. The 2012 lawsuit alleged that Wells Fargo misled the FHA as to the quality of underwriting on 6,320 FHA-insured loans, which later caused approximately $190 million in losses to the agency’s mortgage insurance fund. Wells Fargo has denied the allegations and maintains that, as a ...

The Federal Home Loan Bank Mortgage Partnership Finance program has announced its first security issuance with a Ginnie Mae guarantee. The $5 million security is backed by home loans originated by community banks and credit unions through the MPF Government MBS product. The Mortgage Bankers Association welcomed the new MBS, seeing it as another opportunity for all lenders to access the capital markets directly, reducing costs and increasing originations. “Many community banks use the FHLB MPF program to sell conventional mortgages into the secondary market,” observed Ron Haynie, senior vice president at the Independent Community Bankers of America. “This expansion in aggregating and securitizing government loans provides community banks with the opportunity to reach more borrowers, especially in rural and small-town markets, and to safely sell those loans to ...

Mortgagee registration for transitioning to the FHA’s Electronic Appraisal Delivery (EAD) portal will begin next month. The EAD portal is a web-based system that will enable mortgagees or their designated service providers to transmit appraisal data and reports to FHA prior to endorsement. By using this portal, mortgagees will find it easier to do business with the FHA and reduce post-endorsement corrections of appraisal data. Use of the EAD portal is free. In order to migrate to the portal before its use becomes mandatory on June 27, 2016, mortgagees must register for one of the available migration phases that the FHA will establish. These phases include the following: Start every 30 days, and be approximately 60 days in duration; Allow mortgagees to migrate to the portal any time at their own pace; Require a timeline for mortgagees that will be submitting appraisal directly to ...

The Federal Home Loan Bank’s Mortgage Partnership Finance (MPF) Program has removed certain barriers to streamline refinancing of government-backed mortgages. Effective on July 6, 2015, the MPF no longer requires minimum FICO score, maximum loan-to-value ratios or appraisals for FHA streamlined refis, VA Interest Rate Reduction Refinance loans and rural housing home loans with a U.S. Department of Agriculture guarantee. The MPF program’s participating financial institutions (PFIs) may now originate and underwrite streamline refis based solely on the requirements of the FHA, VA or the USDA’s Rural Housing Service. The program currently requires borrower and co-borrower income for government loan streamline refis for the purpose of loan presentment. “Presentment” refers to the right to require a lender to demand payment of amounts ...

The mortgage market cranked up new originations significantly during the second quarter of 2015, lifting production to its highest level in nearly two years, according to a new analysis and ranking by Inside Mortgage Finance. Lenders produced an estimated $445 billion of first-lien single-family mortgages during the second quarter, an increase of 23.6 percent over the first three months of 2015. It marked the strongest origination volume since the second quarter of 2013, when the industry was in the middle of a refinance boom that generated over $2 trillion in new production over a 12-month period. The party this time around doesn’t look...[Includes two data tables]