A Miami FHA lender and two of his associates plead guilty to a mortgage fraud scheme that cost the FHA approximately $64 million in losses. Hector Hernandez, owner of Great Country Mortgage Bankers and a real estate developer, and his business partner Aleida Fontao each pleaded guilty to conspiracy to commit wire fraud. Olga Hernandez, an underwriter for Great Country, confessed to falsifying information in borrowers’ loan applications to make them appear qualified. According to the DOJ, Great Country was a direct endorsement lender that made loans to first-time homebuyers and borrowers with imperfect credit and low credit cores. Hernandez and Fontao admitted to pressuring their loan officers to approve and close loans based on fraudulent income and employment information. Borrower credit histories were altered to make them look good. The senior underwriter admitted to providing false information to her co-workers and endorsing borrowers’ applications despite knowing that they did not qualify for the loans.
HUD Proposes to Clarify Participation of Religious Organizations in Agency Programs. The Department of Housing and Urban Development has proposed a rule that would amend current rules regarding equal participation of faith-based organizations in HUD programs. The amendments implement a 2010 presidential directive, which clarified that religious providers may compete for federal funding without losing their religious identity. The directive also provided protections for program beneficiaries, including a referral process for those opposed to religious groups that operate federally funded programs. The public has 60 days from the date of publication in the Federal Register to comment on the proposed changes. NMI Holdings Turn Profitable. NMI Holdings, parent company of National Mortgage Insurance, appears to be turning the corner toward profitability as the changes implemented by ...
The fastest-growing sectors of the mortgage market during the second quarter of 2015 were jumbo loans and government-insured production, according to a new Inside Mortgage Finance ranking and analysis. The conventional-conforming segment remains the biggest piece of the mortgage market, accounting for 52.8 percent of originations during the second quarter. Back in early 2013, when refinance activity accounted for three of every four new home loans, the conventional-conforming share was 68.1 percent. Lenders generated...[Includes two data charts]
The Consumer Financial Protection Bureau appears to have declared war on several decades’ worth of business practices as it encourages lenders and real estate service providers to end their “marketing service agreements” with each other. Moreover, according to industry officials, the CFPB is just getting started on its crackdown as it tries to eliminate both legal and under-the-table business arrangements where a lender – in theory – provides something of value to vendors that it’s conducting business with. The first sign that the mortgage industry is concerned...
A highway funding bill signed by President Obama late last week included a provision aimed at collecting more taxes related to interest payments on mortgages. The mortgage industry noted that it won concessions on the provision, delaying the implementation date and limiting the amount of data to be collected. The brunt of the new revenue also looks as though it will be collected from borrowers. H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, included a seemingly simple provision regarding the reporting of mortgage interest on IRS Form 1098. Servicers use the form to report mortgage interest of $600 or more received during a year. The highway funding bill will require...
The Blackstone Group this week finally completed its purchase of all or parts of PMAC Lending, a California-based lender that will help the investment banking firm establish itself in the red-hot West Coast mortgage market. Although the publicly traded Blackstone has maintained a cone of silence regarding its talks with PMAC, employees of the Chino Hills lender began reporting the news themselves through various social media outlets, including Facebook. At least two other nonbank lenders are in talks with Blackstone, one in California and one in Pennsylvania. A spokeswoman for Blackstone declined...
The House Financial Services Committee has passed a number of mortgage-related bills designed to ease lenders’ liabilities by simplifying rules, reducing complexity and compliance costs, while a streamlined regulatory relief package gained new momentum in the Senate. Late last week, the committee reported out the following bills: H.R. 1210, (Portfolio Lending and Mortgage Access Act); H.R. 1941 (Financial Institutions Examination Fairness and Reform Act); and H.R. 3192 (Homebuyers Assistance Act). H.R. 1210 would modify...
Among the findings of the eClosing pilot project run by the Consumer Financial Protection Bureau is the need for greater coordination and cooperation between lenders, technology vendors and settlement agents, pilot participants revealed this week. Speaking at a CFPB forum to announce the results of the bureau’s recently concluded eClosing initiative, Jim Connell, chief information officer for Sierra Pacific Mortgage, said one of the biggest lessons his company learned was the importance of coordinating with the settlement agents. “We had already passed...
The case caught the attention of many loan officers and managers because it centered around the basic issue of what type of client information an LO can take with them when they depart one organization for another.
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