Three federal agencies have announced a joint settlement agreement and consent order with a New York FHA lender and several of its top executives to resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act and the False Claims Act. The U.S. Attorney for the Eastern District of New York, the Office of the Inspector General for the Department of Housing and Urban Development, and the Inspector General of the Federal Deposit Insurance Corp. announced the $1.25 million settlement with Franklin First Financial, Ltd., its Chief Executive Officer Frederick Assini, Chief Operating Officer Christopher Berman, and Andrew Dauro, a manager of the company. The lawsuit alleged that the defendants made illegal payments on behalf of borrowers from February 2009 through March 2010 to keep default rates low so that Franklin First could keep its ...
The Department of Veterans Affairs has issued guidance regarding various aspects of the VA Home Loan program. On Valentine’s Day, the VA sent out a reminder to VA lenders regarding the continued use of the current National Pest Management Association (NPMA) Department of Housing and Urban Development Forms NPMA-99-A and NPMA-99-B. Circular 26-17-07 has instructions for filling out both forms. HUD NPMA-99-A, Subterranean Termite Protection Builder’s Guaranty, is completed and certified by the builder. The licensed pest control company completes the HUD-NPMA-99-B. Also on the same day, the VA announced a new requirement for staff appraisal reviewers (SARs). In 2015, VA released guidance, that established a low-risk and a high-risk appraisal review process. This requires SARs to review the LoanSafe Appraisal Manager product during the issuance of the ...
A key Republican leader in the House of Representatives is looking to push legislation that would effectively neuter critical aspects of the Consumer Financial Protection Bureau that could lead to major changes in the agency’s oversight functions and capabilities, including mortgage rulemaking, supervision and enforcement. The congressman also indicated he might use a procedural technique related to the budget to ram his legislation past Democrat opponents in the Senate. The legislative vehicle of choice is...
The secondary market for bulk agency mortgage servicing rights is beginning to pick up a decent head of steam, but one factor is holding it back from a full-throttle: worries about prepayment speeds. “We’ve had one month of low prepayment numbers,” said Mark Garland, president of MountainView Servicing Group, Denver. “A couple of more months would be better.” According to investment bankers who work the market, although rates have been on a steady climb since the November election – the yield on the benchmark 10-year Treasury is...
Whether President Trump is serious about replacing the head of the Consumer Financial Protection Bureau remains to be seen. But his enthusiasm over the prospect may have gotten the better of his legal judgement and in fact perhaps laid the foundation for such a replacement to be reversed, one noted legal scholar suggested recently. “If Trump is planning on attempting to remove CFPB Director Richard Cordray ‘for cause,’ he’s hardly going about it in a smart way,” Adam Levitin, a law professor at Georgetown University, said in a recent online blog posting. “The Trump administration keeps generating more and more evidence that any for-cause removal would be purely pretextual, which strengthens Cordray’s hand were he to litigate the removal order (as he surely would).” To begin with, the reasons that are offered as justification for sacking Cordray – such as claims of employee discrimination at the bureau or the agency’s settlements with auto finance companies – refer...
Despite some reports of credit access loosening, it’s harder to get a mortgage today than it was during the housing bubble, according to the Urban Institute. With borrowers being denied at a much higher rate than in the past, lower-credit mortgage applicants are dropping out of the housing market. As access to credit tightened after the financial crisis, many lower-credit applicants were discouraged from applying, the UI study noted. That led to a higher-credit applicant pool, which in turn led to a lower rejection rate. This caused...
Fed Chairman Janet Yellen on the future of Fannie and Freddie: “…I would hope that Congress would decide explicitly on what the government’s role is and if there are guarantees, that they would be recognized and priced appropriately.”
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