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 ...

$7.5 Million FHA Mortgage Fraud Scheme. The Department of Justice has filed charges against top executives of a real estate brokerage for their participation in a mortgage fraud scheme that may cost the FHA $7.5 million in losses. Indictments were unsealed earlier this month in Manhattan federal court charging Mitchell Cohen and Erin Davis, the owner and sales manager, respectively, of Buy-A-Home, a real estate brokerage business in Queens, NY. The criminal charges follow a civil fraud lawsuit filed by the U.S. Attorney’s Office for the Southern District of New York last December against ...

A lawsuit filed last week by Bank of New York Mellon against WMC Mortgage and GE Mortgage Holdings is the latest sign that repurchase issues on non-agency mortgage-backed securities are increasing. After years of resistance, trustees are starting to act on behalf of non-agency MBS investors seeking repurchases. Three of the four major banks reported increases in non-agency repurchase requests in the second quarter of 2012 compared with the previous quarter, according to an analysis by Inside Nonconforming Markets ...

The Securities and Exchange Commission is conducting an in-depth investigation of non-agency mortgage-backed securities issued by Ally Financial’s Residential Capital, according to court documents released this week. The documents revealed that due diligence provider R.R. Donnelley & Sons Company has delayed the investigation, which started in February. “The commission is investigating ResCap’s origination and underwriting practices used to make and approve loans in connection with offerings of ...

The Consumer Financial Protection Bureau’s recent proposed rule regarding loan originator compensation would expand and clarify anti-steering rules established by the Federal Reserve, in effect since April 2011. “Compensation structures frequently gave loan originators incentives to steer consumers into loans with higher rates or other unfavorable terms,” according to the CFPB. The regulator’s proposed rule cited a consent order issued by the Fed in 2011 regarding subprime steering by Wells Fargo ...

M&T Bank announced this week that it will acquire Hudson City Bancorp for $3.7 billion. The jumbo lender will merge into a subsidiary of M&T. Hudson City was the 10th-ranked non-agency jumbo lender in 2011, according to Inside Nonconforming Markets, with an estimated $3.15 billion in such originations. Officials at M&T said they acquired Hudson – which was having difficulties funding its jumbo originations – to expand M&T’s retail branch network. Officials at Hudson City said M&T will help expand ... [Includes five briefs]