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)

Two Senate Democrats have made small but significant changes in their proposed legislation to expand the Home Affordable Refinance Program, and the White House is pushing for a vote before lawmakers leave Washington next week for the campaign trail. The key change in the revised Responsible Homeowner Refinancing Act, S. 3522, sponsored by Senate Democrats Robert Menendez (NJ) and Barbara Boxer (CA), would keep the existing requirement that only loans originated prior to June 2009 are eligible for HARP. In its original form, the bill would have extended eligibility for loans made prior to June 2010, effectively giving a number of borrowers a second crack at the program. Sen. Bob Corker, R-TN, and other GOP lawmakers raised...

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 ...

Liquidity requirements apply only to the required minimum net worth of FHA-approved lenders and mortgagees, not to their total net worth, according to a final rule issued recently by the Department of Housing and Urban Development. The rule clarifies language in FHA regulations, which has caused some confusion and anxiety among approved lenders, lawyers and other regulators, said HUD. HUD made clear that the rule simply requires FHA lenders to ...

The Department of Housing and Urban Development has issued new rules for qualifying borrowers who list Social Security income on their application for an FHA-insured mortgage loan.The number of FHA borrowers with verified Social Security income is unknown because HUD does not track borrowers’ source of income, according to a department spokesperson. But industry observers said the number may not be significant. Nonetheless, lenders would need to request several important documents from borrowers who would rely on SS income to qualify for an FHA home loan, the new rules state. These documents include ...

As some aggregators scale back or add overlays to their FHA Streamline Refinance mortgage loans, First Mortgage Corp. stands out because of its confident approach to the product. While other lenders impose overlays or charge more for the additional risk, FMC, an FHA-approved direct lender in Ontario, CA, imposes no restrictions on streamline refinancing other than those required by FHA guidelines. “First Mortgage prides itself in serving historically underserved borrowers and so we have a commitment to underwrite loans to FHA guidelines for the most part,” said FMC spokesperson Sharon Magnuson. The FHA streamline refi program allows certain borrowers ...