A significant increase in the volume of claims following the announcement of the $25 billion joint servicer settlement earlier this year has created a huge backlog that could potentially threaten the FHA Mutual Mortgage Insurance Fund, warned the Department of Housing and Urban Development’s Office of the Inspector General. Separate OIG audits of the five mortgage servicers that signed the groundbreaking settlement pact with federal agencies and state attorneys general in February found that if those servicers were to file all ...

The FHA Mutual Mortgage Insurance Fund appears poised for another potential settlement infusion following this week’s announcement of a federal lawsuit against Wells Fargo Bank for alleged reckless underwriting and fraudulent loan certifications on thousands of FHA-insured loans that ultimately defaulted. Filed by the U.S. Attorney’s Office in Manhattan, the lawsuit accuses Wells Fargo of engaging in “a long standing and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, while relying on the convenient backstop of government insurance.” Ten years of Wells Fargo’s alleged misconduct ...

The Department of Housing and Urban Development’s Office of the Inspector General is seeking indemnification from a sponsored third-party originator (TPO) for potential losses of more than $1.5 million due to poor loan documentation. The IG also ordered the TPO, Bankers Mortgage Group of Woodland Hills, CA, to reimburse the FHA insurance fund $58,704 for the actual loss on one FHA-insured mortgage loan. The IG also recommended that HUD impose fines on Bankers Mortgage for allegedly signing off on false loan information. IG auditors targeted BMG after internal investigators found significant ...

Endorsements of new loans under the Home Equity Conversion Mortgage program continued to slide as production fell significantly during first half of 2012. HECM production declined by 25.0 percent from the same period last year to $7.1 billion and fell 4.9 percent from the first to the second quarter. In-house originations accounted for almost all originations reported by top HECM lenders. Initial principal amount at loan origination totaled $4.7 billion. MetLife Bank led all lenders with $2.03 billion, an estimated 63 percent originated in house, and captured a 28.5 percent market share. Production rose 21.6 percent ... [One chart]

A California operator of an allegedly bogus foreclosure rescue firm has agreed to a $5 million settlement with the Department of Justice and the Department of Housing and Urban Development. Based on an investigation by HUD’s Office of the Inspector General, the DOJ filed a civil complaint against Terrill Meisinger, focusing on more than 100 properties that were financed through FHA and conventional loans. The complaint alleged that Meisinger contacted individuals facing foreclosure and offered ...

Historically low mortgage interest rates generated a huge supply of refinance business during the third quarter of 2012 that drove Fannie Mae and Freddie Mac securitization volumes higher, according to a new ranking and analysis by Inside MBS & ABS. A total of $437.7 billion of single-family MBS were issued during the third quarter, up 15.8 percent from the previous three-month period. It was the biggest production volume for the market since the fourth quarter of 2010, and it lifted year-to-date issuance for the first nine months of the year to $1.207 trillion – a 43.2 percent increase over the same period in 2011. MBS issuance gained...[Includes one data chart]

Single-family mortgage securitization by Fannie Mae and Freddie Mac increased sharply during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. New production of mortgage-backed securities by the two government-sponsored enterprises rose 22.4 percent from the second quarter, driven by a hefty 19.4 percent increase in refinance business. Refinance loans accounted for 76.9 percent of GSE securitization during the period, and the dollar volume of refi loan sales rose 19.4 percent from the second quarter. Fannie posted...[Includes three data charts]

The third and latest round of quantitative easing rolled out earlier this month by the Federal Reserve will sweeten MBS demand far above supply, but it will ultimately provide only a negligible boost to mortgage refinance activity, analysts say. The Federal Open Market Committee announced QE3 on Sept. 13, making a commitment to buy an additional $40 billion in agency MBS a month and saying that it would continue buying “if the outlook for the labor market does not improve substantially.” The New York Fed has been buying about $27.9 billion of agency MBS per month since October 2011 in an effort to reinvest principal payments from its MBS holdings back into the mortgage securities market. An analysis by Bank of America Merrill Lynch this week found...

Researchers with the Federal Reserve Bank of New York have found additional evidence to support New York Fed President William Dudley’s call for an increase in streamlined refinances for current borrowers with agency mortgages. They suggest that further changes to the Home Affordable Refinance Program to prompt refis and prepayments are not a “zero sum game” between borrowers and agency MBS investors. In January, Dudley said obstacles have prevented...

New temporary guidelines for approving FHA financing for condominium projects should boost sales of condo units across the country and improve current housing market conditions, according to industry stakeholders. The Department of Housing and Urban Development announced the guideline changes on Sept. 13 after extensive consultations with industry participants. Effective for all condo project approvals and recertifications, the revised guidelines will apply until Aug. 31, 2014, unless extended by the FHA. Stakeholders are confident that the changes, though temporary, will be ...