No matter how cleverly hidden, the Securities and Exchange Commission can eventually ferret out bad business practices – a costly lesson learned by AlphaBridge Capital Management. The SEC ordered AlphaBridge, a registered hedge-fund adviser, and two of its principals to pay a $5 million penalty for allegedly inflating the prices of illiquid MBS held in hedge-fund portfolios managed by the firm. The SEC charged...

FUN FACT: PIMCO owns almost 12 percent of PHH Corp., the parent of the nation's ninth largest residential servicer.

The Treasury Department didn’t meet key elements of federal guidelines for cost-benefit analysis when considering changes to the non-agency Home Affordable Modification Program that were implemented in November, according to the Government Accountability Office. In a report released last week, the GAO conceded that the Treasury isn’t required to follow cost-benefit guidance from the Office of Management and Budget when making changes to HAMP ...

The Department of Veterans Affairs has issued guidance to servicers regarding the use of an auction service in lieu of a foreclosure sale to terminate a VA loan. The goal is to get more from foreclosure-sale proceeds to lower the veteran’s mortgage debt. Mortgage holders may find it better to pursue VA loan termination through an auction service, rather than having to waive a greater amount at foreclosure, the VA said. It also may raise awareness among potential bidders and increase marketability and competition, the agency said. While traditional foreclosure methods have long been a part of the loan termination process, they limit servicers’ chances of obtaining greater proceeds at sale, which are applied to lower the veteran’s debt. Consequently, VA ends up paying more for a claim and assuming the liability of managing and marketing a conveyed real estate-owned property. In addition, state and county ...

Lending to veterans and members of the U.S. military is expected to trend up in the second half of 2015 as the economy improves further, wages rise and unemployment declines, predicts the country’s top VA lender. “We’re seeing increased activity in housing while house values have gone up modestly, which I expect will continue in the next couple of years,” said Stan Middleman, president and chief executive of Freedom Mortgage. It is a great time for veterans to purchase a home, Middleman said, and he would he like to see more vets become homeowners. However, despite the low interest rates, crisp and clear underwriting and no downpayment required, many veterans are still not taking advantage of the VA program as they should, he noted. Middleman feels he should advertise and market the VA product more. In the past seven months, Freedom Mortgage has added ...

An FHA multifamily lender will face the Department of Housing and Urban Development’s Mortgagee Review Board for violations that caused more than $10 million in losses to the FHA Mutual Mortgage Insurance Fund. HUD’s inspector general recommended that Prudential Huntoon Paige Associates be brought before the board to explain how it underwrote a $19.9 million loan to develop a multifamily project for seniors in Lewisville, TX. Prudential is a Multifamily Accelerated Processing (MAP) approved lender authorized to prepare, process, review and submit loan applications for FHA multifamily mortgage insurance. The 151-unit “Amaranth at 544” project caught the IG’s eye because of early default, assignment and the significant dollar amount involved. The IG identified several underwriting deficiencies, including inadequate cash reserves at loan closing, unsupported ...

The Department of Veterans Affairs has announced measures lenders may employ to provide relief to VA borrowers whose lives and homes were upended by recent severe storms, tornados and flooding in Texas, Oklahoma and Guam. VA mortgage relief would be available to the families of borrowers who died during these natural catastrophes and to borrowers whose homes were badly damaged or destroyed. Relief is also available to those whose work environments were destroyed or severely damaged. Other people have been indirectly affected as well, and the impact may continue to ripple throughout the country, as evacuees travel nationwide to seek support and shelter from family members in unaffected areas, according to the VA. VA encourages holders of guaranteed loans to extend forbearance to distressed borrowers and to provide counseling to them. Lenders are also authorized under VA regulations to reapply prepayments to ...

“After the ‘taper tantrum’ you had a whole bunch of institutions that got annihilated when the 10-year Treasury rate moved," said analyst Christophe Whalen of KBRS.

We’re told a sale contract could be signed any day now, but as far as a public announcement is concerned, it may not happen right away…

The nation’s subservicers increased their contracts to a record high $1.350 trillion at March 31 as tougher regulations continued to play a key role in the shifting of processing chores away from depositories to nonbanks. On a sequential basis, contracts increased by 7.1 percent in the first quarter and 14.4 percent compared to March 31, 2014, according to a new Inside Mortgage Finance ranking. Only four banks – Flagstar, Cenlar, Wells Fargo and Bank of America – were among the top 20 subservicers. Overall, at March 31, subservicers were...[Includes one data table]