Officials at the Consumer Financial Protection Bureau claim that lenders will originate home loans that don’t meet the new qualified mortgage standard, though industry participants have been skeptical due to the liability involved with such loans. Raj Date, the former deputy director of the CFPB, announced last week that his new firm will indeed originate non-QMs, with an initial focus on non-agency jumbo mortgages. “It’s an example of a great market opportunity where we can ...

The FHA and the Department of Justice have ramped up enforcement actions against more than a dozen mortgage lenders in recent weeks for alleged agency rule violations. At least two of the lenders have received notices from the DOJ that they are in violation of the False Claims Act. According to the Collingwood Group, a Washington-based business advisory firm, the agencies have sent notices of enforcement or “administrative” actions to as many as 15 FHA direct endorsement (DE) lenders, some of whom could lose their DE status if found to have engaged in improper lending practices that resulted in huge losses for the FHA. The latest enforcement actions have ...

The Department of Veterans Affairs is planning to raise the residual income limit requirement for home loan applicants by 15 percent – a move that could shut out many veterans who have limited income. The proposal is one of several measures under consideration for the VA’s Home Loan Program, said Carol Barnard, a loan production officer in the VA Regional Loan Center in Denver, during a recent webinar hosted by the Collingwood Group, a Washington-based advisory firm. Barnard is also a senior consultant with Collingwood. This change means that, for a family of four in the VA’s Northeast region, the required income residual could jump to ... [1 chart]

Rep. Darrell Issa, R-CA, chairman of the House Committee on Oversight and Government Reform, is planning to quiz top FHA officials about an apparently deliberate effort by the agency to withhold important information from Congress regarding the true financial health of the FHA insurance fund. In a recent letter to FHA Commissioner Carol Galante, Issa said that the stress test employed by Integrated Financial Engineering in its FY 2012 actuarial review of the FHA Mutual Mortgage Insurance Fund yielded a more troubling result than what HUD reported to Congress in November last year. In the actuarial review, IFE reported that ...

Wells Fargo has reached an agreement with the Department of Housing and Urban Development and fair housing advocacy groups to improve its handling of foreclosed and abandoned homes and resolve allegations of discrimination in the maintenance and marketing of real estate-owned properties. The National Fair Housing Alliance and several other fair housing groups filed a complaint with HUD in April last year after observing that Wells’ foreclosed homes in minority neighborhoods did not receive the same treatment and care as the bank’s REO properties in white neighborhoods. The NFHA, which conducted an ...

The Department of Housing and Urban Development and the reverse mortgage lending industry lauded the U.S. House of Representatives this week for passing bipartisan legislation that would allow the agency to make immediate, necessary changes to the Home Equity Conversion Mortgage Program while working simultaneously on implementing regulations. H.R. 2167, the Reverse Mortgage Stabilization Act of 2012, passed by voice vote after it was added to the House “suspension” calendar, which limits debate on noncontroversial bills for quick passage. Co-sponsored by Reps. Denny Heck, D-WA, and Mike Fitzpatrick, R-PA, the bill responds ...

The likelihood of new loans exceeding the statutory “high-priced mortgage loan” (HPML) threshold due to a recent policy change relating to FHA mortgage insurance premium payments is causing uneasiness among some lenders, said an industry trade group. This week, the Consumer Mortgage Coalition warned that lenders might not originate FHA-insured loans if they thought the new MIP policy would cause the mortgages to turn into HPMLs and subject them to increased liability. Specifically, the new MIP policy might prevent ...

HUD Takes Second Furlough. The Department of Housing and Urban Development this week announced the second of seven furlough days employees are scheduled to take due to mandatory, government-wide budget cuts: June 14. Sequestration went into effect March 1 because Congress failed to pass legislation on balanced deficit reduction. HUD employees took their first forced leave on May 24. Approximately $85 billion will be slashed from the federal budget for the remainder of the fiscal year. The next furlough date is July 5. HUD, however, may not need to ...

The Federal Housing Finance Agency is holding a two-day, closed-door working group Thursday and Friday with force-placed insurance stakeholders following the FHFA’s recent actions to shutter an insurance proposal by Fannie Mae and its policy proposal to develop a set of force-placed aligned standards.

Mortgage lenders are increasingly anxious that they may be blindsided by fair lending claims based on the disparate impact theory as they try to keep their business within the safe harbor for qualified mortgages under the new ability-to-repay rule. “My concern is about who’s going to do a QM and who’s going to do [non-QM] ability-to-repay, and how can we somehow get a disparate impact out of this?” said Charles Lewis, vice president of compliance services at the Missouri Bankers Association. Speaking at the American Bankers Association’s regulatory compliance conference in Chicago early this week, Lewis urged...