FHA officials, industry groups and consumer advocates appear to be leaning more towards a Senate FHA reform bill that is moderate and far less ambitious than legislation approved by the House Financial Services Committee this week. Introduced by Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, the FHA Solvency Act of 2013 “focuses on the right issues, not like the House bill, which tries to dramatically alter the program and affect borrower eligibility,” said an industry observer. Testifying as the sole witness at a Senate Banking Committee hearing on FHA solvency this week, FHA Commissioner Carol Galante said ...
A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...
The FHA is trailing Fannie Mae, Freddie Mac and the Department of Veterans Affairs in the disposition of real estate-owned properties, according to a new study from the Government Accountability Office. The study found that FHA’s net proceeds from REO sales from January 2007 through June 2012 were about 4 to 6 percentage points lower than Fannie’s and Freddie’s returns. The differences in combined returns between FHA and the government-sponsored enterprises persisted at an estimated 2 to 5 percent even after controlling for differences in value, location, market conditions and other relevant factors. In addition, the FHA took about ...
The Department of Housing and Urban Development has updated its lender requirements for preforeclosure sale (short sale) and deed-in-lieu of foreclosure for implementation on Oct. 1 this year. The short sale or deed-in-lieu of foreclosure are the last options available to a distressed borrower if home-retention options, such as special forbearance, loan modification, partial claim, and FHA’s Home Affordable Modification Program are not successful. A short sale allows the borrower to avoid foreclosure by selling the home for less than the loan balance. The lender recovers the remainder from ...
Ginnie Mae servicers continued to experience modest increases in servicing outstanding while FHA servicers reported a slight increase in 30-to-60 day delinquencies, according to Inside FHA Lending’s analysis of the agencies’ servicing portfolios as of midyear 2013. As of June 30, Ginnie Mae’s total servicing outstanding was $1.4 trillion, an increase of 6.6 percent from last year and up 1.8 percent from the first quarter, reflecting improvements in government-backed loan originations due to a slowly recovering economy. Ginnie Mae servicing volume has been ... [2 charts]
When it comes to guaranty fees, FHFA has taken "meaningful steps" to level the playing field for community lenders, one agency official testified this week.
Federal prosecutors and members of the Justice Department’s Residential MBS Working Group are reportedly considering a new strategy for criminally charging Wall Street bankers for alleged fraud in their packaging and sale of MBS backed by subprime mortgages at the peak of the housing frenzy. According to Reuters, the members of the working group are eye-balling a shift in strategy that would involve moving away from the more widely used securities fraud charges to the less common offense of bank fraud. “Perpetrators of bank fraud can be charged up to 10 years after their crimes, compared with the five-year statute of limitations on securities fraud, which has already run out on most events leading up to the 2008 financial crisis,” Reuters reported. “A bank fraud conviction carries up to $1 million in fines and a maximum prison sentence of 30 years.” Laurence Platt, financial services practice leader in the Washington, DC, office of the K&L Gates law firm, said...
Federal regulators will make their next move on risk retention and defining qualified residential mortgages in September, according to the Federal Reserve. Meanwhile, the Securities and Exchange Commission is working on a number of long-pending MBS rules, including the so-called Reg AB2. The Fed expects to take “further action” on risk retention in September, according to its latest regulatory agenda. The SEC, which is jointly working on the risk-retention rule with the Fed and other agencies, was vague, stating that the next action date was “undetermined.” Regulators have received...
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