The Department of Housing and Urban Development is in conciliation talks with 22 FHA-approved mortgage lenders about “credit overlay” practices that resulted in a denial of credit to FHA-qualified borrowers. Agreements between HUD and the lenders may be announced within the next few weeks, said a HUD spokesperson, who declined to comment further because the issue is still in mediation. Discussion between HUD and the lenders have been ongoing since the National Community Reinvestment Coalition, an association of more than 600 community-based organizations, filed individual complaints against the 22 lenders late last year for alleged ...

The Department of Housing and Urban Development has quietly announced preparations for the termination of FHA HOPE for Homeowners, a program that promised more than it could deliver. In a mortgagee letter, HUD laid out instructions on how to process cases during the program’s phase-out period. Launched in September 2008 to assist homeowners at risk of foreclosure, the H4H program will end on Sept. 30, 2011. July 29 is the last day to obtain a new H4H case number for lenders seeking to refinance borrowers into H4H loans after this date, while July 16 is the deadline ...

A proposed rule that would allow lenders in the federal Farm Credit System to participate in the FHA mortgage insurance programs is being closely scrutinized at the Department of Housing and Urban Development. The measure is one of several regulatory actions taken by HUD in response to President Obama’s directive in January calling for a government-wide review of rules and regulations. The review is aimed at weeding out rules that are outdated, unnecessary, excessively burdensome, and redundant or in conflict with other federal rules. Twenty rules, including the proposed FHA approval for FCS lenders, are now being streamlined or rewritten to ease the regulatory burdens of small businesses and spur economic growth. The proposed changes build ...

The Department of Housing and Urban Development is finalizing proposed guidelines streamlining reporting requirements for small FHA-approved lenders. Under the proposed guidelines, federally supervised, FHA-approved lenders with under $500 million in total assets would have alternative requirements for reporting their financial condition. FHA lenders are currently required to submit audited financial statements as a condition for FHA lender approval or renewal. In lieu of an audited financial statement, the proposed rule would require smaller supervised lenders to submit a copy of the unaudited regulatory report they provide ...

The Department of Housing and Urban Development is increasing its focus on tighter underwriting with actions against pregnancy discrimination in home mortgages. The department recently charged Mortgage Guaranty Insurance Corp., PNC Mortgage and others for allegedly refusing to provide mortgage insurance on a Pennsylvania loan unless the borrower returned to work from maternity leave. The FHA requires approved lenders to review a borrower’s income to determine his or her ability to repay the mortgage. However, lenders are prohibited from inquiring about future maternity leave. According to HUD’s complaint, MGIC notified ...

Mortgage compliance experts are bracing for up to 10,000 pages of new Dodd-Frank Act regulations that will make mortgage lending exponentially more difficult, according to industry officials at this week’s regulatory compliance conference sponsored by the American Bankers Association. “Dodd-Frank is going to increase the compliance burden, the risk of non-compliance and the cost of mortgage lending,” said David Kelly, executive vice president in charge of loan operations for FirstBank Data Corp. The new regulatory environment will feature...

Top servicers flagged for their faulty foreclosure practices will have an extra month to submit their mitigation plans, although federal regulators continue to bear down on the industry and are starting to withhold loss mitigation incentive payments from some companies. The Office of the Comptroller of the Currency and the Office of Thrift Supervision this week said they will give 12 servicers subject to consent orders extra time to submit “comprehensive action plans” that detail the financial resources the bank will commit to...

The Federal Housing Finance Agency has issued an interim final regulation with a request for comments on changes to its existing Freedom of Information Act regulations. In its notice, published in the May 23 Federal Register, the FHFA said it is updating its existing FOIA regulations to include the FHFA Office of Inspector General. The FHFA-OIG did not yet exist when the Finance Agency’s original FOIA regulations were issued in 2009.

In light of Fannie Mae and Freddie Mac’s federal conservatorship status and the resulting control by the Treasury Department, the two GSEs are “effectively part of the government” and their operations should be reflected in the federal budget, according to the Congressional Budget Office.CBO has concluded that using a fair-value approach to estimate Fannie and Freddie’s subsidy costs is the best way to give Congress and taxpayers the most accurate accounting information.

Although federal regulators this week gave the industry more time to comment on their controversial proposal on risk retention in non-agency MBS and ABS transactions, some industry experts have already suggested that the concept fails to address its fundamental purpose of strengthening deal quality by aligning the interests of securitizers and investors. Risk retention is an intellectually appealing idea, but it’s not clear that it provides...