The FHA's model mortgage form clearly makes the federally required flood-insurance amount the minimum, not the maximum, the borrower must have, according to a recent federal appeals court ruling. In Faire Feaz v. Wells Fargo Bank, et al. No. 13-10230, the U.S. Court of Appeals for the 11th Circuit determined that the language in the FHA's model form requiring borrowers to purchase the FHA's minimum required amount of flood insurance does not prevent lenders from demanding more insurance than the agency requires. With its ruling, the court upheld the dismissal of the claim for breach of contract, related claims for breach of the duty of good faith and fair dealing, and breach of fiduciary duty. The 11th Circuit ruling also agreed with the First Circuit's recent en banc ruling in Kolbe v. BAC Home Loans Servicing LP, F.3d -- 2013 WL 5394192 (1st Cir. Sept. 27, 2013). Noting a split among the district courts, the First Circuit recognized that ...
Several industry trade associations have asked the FHA to confirm whether the 203(k) property rehabilitation program can be used to mitigate future flood threats, particularly for undamaged homes in flood zones. Because of their properties' location in a designated floodplain, homeowners could be hit by rising flood insurance rates. The Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders, National Association of Local Housing Finance Agencies and the Association of State Floodplain Managers said they believe the federal 203(k) program can be used to reduce or minimize the effect of future floodings on undamaged floodplain properties. Flood insurance rates can be reduced significantly by raising a home to a level at or above the 100-year flood elevation, or by ...
Walter Investment, the parent of Green Tree, said it anticipates meeting with the regulator in the near future to get a better understanding of its concerns and to see if the matter can be resolved.
Increased regulation of mortgage brokers has prompted some to switch their business models to become so-called mini-correspondents. Industry lawyers suggest that being a mini-correspondent can offer benefits to those previously working as brokers, but the switch also comes with significant changes to business practices. "If you're a broker, think about what this is going to mean: higher net-worth requirements, warehouse lending, new compliance systems, new software systems to develop and generate the disclosures, and more importantly, significantly higher liability," Jonathan Jaffe, a partner at K&L Gates, said this week during a webinar hosted by the law firm. 'So there's a trade-off there if you're a broker thinking about converting," he said. Some brokers see...
Fannie Mae and Freddie Mac reported significant profits during the fourth quarter of 2013, capping a year in which rising guaranty fees had little impact on the market share of the two government-sponsored enterprises. Fannie reported net income for 2013 of $84.0 billion, compared to $17.2 billion in 2012, but over half of last year's earnings (roughly $45 billion) came from recaptured deferred tax assets. The company reported fourth-quarter earnings of $6.5 billion, its eighth consecutive quarterly profit. After it makes its next dividend payment to the Treasury Department in March, Fannie will have paid...
The House of Representatives this week is expected to vote on the amended version of H.R. 3370, the Homeowner Flood Insurance Affordability Act, which would provide comprehensive reform and longer-term relief from skyrocketing premiums in the National Flood Insurance Program. But there is a possibility that the vote could take place next week as Republicans and Democrats continued to negotiate on proposed changes and further protection for homeowners who face hefty rate increases caused by the Biggert-Waters Flood Insurance Reform Act of 2012, sources said. Congress passed the act to address the NFIP's solvency problems. Authored by Reps. Michael Grimm, R-NY, and Bill Cassidy, R-LA, H.R. 3370 builds...
The SEC’s Division of Corporation Finance this week suggested a change to proposed Reg AB2 disclosure requirements in an effort to protect the privacy of borrowers whose loans are included in MBS and ABS.
In a heavily redacted draft memo released to the public, the Inspector General of FHFA found that while the agency had reviewed and examined the GSEs’ executive compensation, it did not keep close tabs on "non-executive senior professional compensation practices."
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