The Department of Housing and Urban Development has updated guidance regarding its requirement for lenders to utilize loss mitigation options on a distressed loan or initiate foreclosure within six months of the default date. Specifically, guidance issued earlier this month reiterates the existing eight automatic extensions available to mortgagees when they are unable to initiate foreclosure within the allotted timeframe. In addition, the guidance introduces two new automatic extensions that would align with the Consumer Financial Protection Bureau’s Real Estate Settlement Procedures Act regulations. The guidance is effective for all FHA-insured mortgages in default on or after Oct. 1, 2015. The CFPB RESPA regulations require an appeals process for borrowers when their request for loan modification is denied. Through this guidance, HUD provides an automatic 90-day extension to the ...
Rep. Elijah Cummings, D-MD, ranking member of the House Committee on Oversight and Government Reform, and Sen. Sherrod Brown, D-OH, ranking member of the Senate Committee on Banking, Housing and Urban Affairs, earlier this month expressed concern about the sale of nonperforming loans to private investors without sufficient protections for homeowners and neighborhoods. Both lawmakers fear that FHA may not be providing enough incentives to servicers to modify ailing mortgages and that certain investors may be more interested in foreclosure than a cure. The influx of private investors has crowded out first-time homebuyers and raised concerns about the long-term effects of investor-owned homes in communities where foreclosures run high. In a joint letter, the two lawmakers sought information from the Department of Housing and Urban Development about ...
House Approves Legislation Streamlining FHA Condo Rules, Allowing DE Lenders for USDA. Housing reform legislation that would ease FHA restrictions on condominium financing and allow delegation of loan approval authority to qualified lenders under the U.S. Department of Agriculture’s rural housing programs passed the House last week by a vote of 427-0. Described as an FHA reform bill, H.R. 3700, the “Housing Opportunity Through Modernization Act,” would modify FHA requirements for condo mortgages by streamlining FHA’s project certification requirements to qualify condominiums for FHA financing as well as making recertification less burdensome. H.R. 3700 would also expand the USDA’s Section 502 Guaranteed Rural Housing Loan Program for single families by delegating loan-approval authority to certain participating lenders. FHA and VA loan programs already ...
Two Republican lawmakers in the House have raised questions about the diminishing capital held by Fannie Mae and Freddie Mac at a time when the two government-sponsored enterprises are expected to generate huge dividends for the government over the next decade. Reps. Stephen Lee (TN) and Mick Mulvaney (SC) recently asked the Federal Housing Finance Agency and the Treasury to consider the impact on the financial system and taxpayers of the GSEs holding no capital. They argue that Fannie and Freddie are already in violation of their statutory capital reserve requirements, and they will not be able to hold any capital after Jan. 1, 2018. “It is...
A recent amendment by Congress to the Telephone Consumer Protection Act was helpful for mortgage servicers but further action is necessary, according to industry participants. Servicers continue to raise concerns about the TCPA due to an order issued by the Federal Communications Commission in June. The order placed restrictions on auto-dialed calls to cell phones, subjecting servicers and others to penalties of $500 per call with no cap on statutory damages. The TCPA allows...
HSBC North America Holdings agreed to a $470.0 million settlement late last week with the Department of Justice, 49 state attorneys general and other regulators. The settlement is similar to the $25 billion settlement five big banks agreed to in 2012 and suggests that regulators aren’t finished focusing on servicing issues that occurred during the financial crisis. “The agreement is part of our ongoing effort to address root causes of the financial crisis,” said Benjamin Mizer, a principal deputy assistant attorney general and head of the Justice Department’s Civil Division. The HSBC settlement includes...
The mortgage banking and real estate industries this week called on the Department of Veterans Affairs to adopt policy changes to improve the VA Home Loan Guaranty program. In a hearing week before the House Committee on Veterans Affairs, Subcommittee on Economic Opportunity, the Mortgage Bankers Association and the National Association of Realtors offered several changes that could further enhance the program. Testifying on behalf of the MBA, James Danis II, president of the Residential Mortgage Corp., urged...
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