The Department of Housing and Urban Development has spelled out the conditions under which borrowers must successfully complete a trial payment plan before they can get a permanent standard loan modification under the FHA’s loss mitigation program. A HUD mortgagee letter (ML 2011-28) also specifies the time requirements for completing loan modification and partial claim documents for a servicer to receive an incentive fee. The FHA reported 13,368 loan modifications and 3,082 partial claims paid in June. A total of 119,703 FHA loan modifications were reported from October 2010 through June 2011, and 21,035 foreclosure claims were paid over the same period. Their workout ratios were ...

The Department of Housing and Urban Development’s Office of the Inspector General recommended that an approved FHA lender be ordered to indemnify HUD against any future losses on a number of loans with material underwriting deficiencies. An audit of Ameritrust Mortgage Bankers, based in Lake Success, NY, found that 11 of the 20 FHA-insured mortgages that the lender had originated failed to meet FHA underwriting guidelines and that a quality control plan did not meet agency requirements. Inadequate verification and documentation of borrowers’ income, assets, liabilities and credit histories resulted in actual losses of $183,327 on one loan and potential losses of more than $2.7 million on 10 loans, for total losses of more than $2.9 million, the audit found. In addition, Ameritrust officials allegedly charged ...

A group of House Democrats wants the Obama administration to extend the forbearance period up to a year for unemployed homeowners with mortgages owned by Fannie Mae or Freddie Mac.

A report issued late last week by the Federal Housing Finance Agency Office of Inspector General has concluded that the FHFA did nothing to subvert its role as Fannie Mae and Freddie Mac’s regulator when the agency negotiated the GSEs’ administrative responsibilities under the Treasury Department’s Home Affordable Modification Program.However, the FHFA-OIG noted there was ample room for improvement in the Finance Agency’s oversight of the GSEs’ financial agency agreement (FAA) with Treasury, which resulted in poor communication and differing expectations as to the payment and scope of the HAMP-related work that the GSEs performed.

A conservative, non-partisan public interest group is considering its options following a recent federal appeals court decision affirming the Federal Housing Finance Agency’s right to withhold documentation revealing the extent of political campaign donations made by Fannie Mae and Freddie Mac.On Aug. 5, the U.S. Court of Appeals for the District of Columbia upheld a lower court ruling against Judicial Watch.

AARP has filed a class action lawsuit against Wells Fargo Bank and Fannie Mae in the U.S. District Court for the Northern District of California in San Francisco on behalf of reverse mortgage borrowers and their survivors in what it says is an attempt to head off illegal Home Equity Conversion Mortgage foreclosures and evictions.

One of the most important issues for mortgage lenders and homebuyers alike in the whole qualified mortgage/risk-retention/ability-to-repay debate is how much legal liability lenders will have over the mortgages they originate in the Dodd-Frank era. For policymakers, one of the biggest decisions they will have to make to bring certainty to that question is which legal standard to impose, a “rebuttable presumption” or a “safe harbor.” …