The Department of Veterans Affairs and the U.S. Department of Agriculture Rural Housing Service have issued 2016 guidelines for lending to borrowers who have gone through a bankruptcy, foreclosure or a short sale. Under VA guidelines, borrowers emerging from a previous Chapter 7 bankruptcy may apply for a VA loan two years after the bankruptcy discharge. Borrowers with a Chapter 13 bankruptcy may qualify for a new VA loan if they have made at least 12 months of payments and the lender concludes that they have reestablished satisfactory credit. Before the bankruptcy-tainted borrower applies for a VA loan, however, the trustee or the bankruptcy judge must approve the new loan. The lender may put in a good word on behalf of the borrower provided the latter has met all requirements for a new loan. Borrowers may apply for a VA loan two years after a foreclosure or a short sale. In the case of ...

The FHA has given lenders and servicers an additional extension through April 17, 2016, to submit due-and-payable notices when Home Equity Conversion Mortgage borrowers fall behind on their property tax or insurance payments. The extended deadline also provides FHA lenders and servicers an opportunity to pursue loss mitigation before initiating foreclosureThe latest deadline extension was the second such extension. In April 2015, the FHA announced a policy change providing HECM lenders and servicers an additional 60 days in which to initiate foreclosure proceedings against any troubled HECM borrower with a case number issued prior to Aug. 4, 2014, with a non-borrowing spouse. Lenders and servicers are required to comply with reasonable-diligence timeframes for such HECMs. Debenture interest will not be curtailed during this period. The April policy allows mortgagees full discretion as to when to use the extension.

On Jan. 21, 2016, the FHA issued a reminder to lenders to register for one of the three remaining phases of Electronic Appraisal Delivery (EAD) Onboarding, before the electronic appraisal submission requirements become mandatory on June 27, 2016. The remaining onboarding phases are the following: Feb. 15-April 15 (registration closes on Feb. 14); March 15-May 15 (registration closes March 14); and April 15-June 15 (registration closes on April 14). All appraisals for FHA case numbers assigned on or after June 27, 2016, must be submitted to FHA through the ...

With nonbanks fearing they could be stuck with error-laden mortgages that violate the integrated disclosure rule, a secondary market has developed for this new breed of “scratch and dent” loans, according to interviews conducted by Inside Mortgage Finance. One investor, requesting his firm’s name not be identified, said his shop bought such a mortgage for 90 cents on the dollar. Participants in the market – including investors and traders – concede...

Existing home sales increased by 14.7 percent in December compared with the previous month, according to data from the National Association of Realtors, suggesting that issues involving the Consumer Financial Protection Bureau’s disclosure rule were temporary. NAR said 5.46 million sales of existing homes were completed in December, on a seasonally adjusted basis, up from 4.76 million the previous month, marking the largest monthly increase ever recorded by the group, on a percentage basis. Existing home sales in November were down by 10.5 percent from the previous month as lenders grappled with the new TRID disclosure rule. “While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates...

The mortgage industry’s continued use of marketing services agreements and other affiliated business arrangements hangs in the balance in a long-running dispute between PHH Corp. and the Consumer Financial Protection Bureau, which will be the subject of oral arguments April 12, 2016, before the U.S. Court of Appeals for the District of Columbia. “The PHH appeal is one of the most important Real Estate Settlement Procedures Act opinions to be decided by the courts in decades,” legal expert Phillip Schulman told Inside Mortgage Finance this week. “It will determine whether Section 8(c)(2) of the act merely clarifies the Section 8(a) anti-kickback provisions of the statute, as CFPB Director Richard Cordray claims, or whether it creates a safe harbor that exempts payments from a RESPA violation if those payments are for goods provided or services rendered, as the plain language of the act and several previous circuit courts have held.” Further, “This appeal will have...

The turmoil in financial markets around the world is fueling a flight to safety on the part of investors into U.S. dollar-denominated assets, helping to keep mortgage rates in the U.S. housing market lower than they otherwise would be. But how long that will continue is anyone’s guess. “The recent volatility in worldwide financial markets caused Treasury rates to decline, so we’ve seen that being picked up in mortgage rates,” Danielle Hale, managing director of housing statistics for the National Association of Realtors, told Inside Mortgage Finance. Mike Fratantoni, chief economist at the Mortgage Bankers Association, said...

Although the CFPB recently issued a “clarifying” letter on errors tied to the TRID integrated disclosure rule, deep concerns remain among originators that fund non-agency product for sale into the secondary market. Moreover, according to interviews conducted by Inside Mortgage Finance, an affiliated publication, some nonbank lenders are seeing noticeable increases in origination costs because loans are taking longer to close and therefore remain on warehouse lines for an extended period of time. Because nonbanks fund almost all of their production using warehouse credit, the implication boils down to this: already squeezed profit margins are going to shrink. Industry efforts to comply with the new disclosures, which merge requirements of the Truth in Lending Act and the Real Estate Settlement ...

The recent letter from CFPB Director Richard Cordray to the Mortgage Bankers Association clarifying certain aspects of the bureau’s integrated disclosure rule has some important take-aways – and certain limitations – the industry should be mindful of, according to some top industry attorneys. In a recent online blog posting, attorneys Donald Lampe and Leonard Chanin of Morrison & Foerster LLP identified a handful of key take-aways for mortgage market participants related to the TRID rule. First, “If mortgage loan originators and others involved in the origination, financing and sales of mortgage loans are not familiar with the benefits of [specific] Know Before You Owe disclosure cure provisions, now is the time to assess them,” the attorneys began. They then noted that Cordray’s ...

The latest installment of the Campbell Surveys/Inside MortgageFinance HousingPulse Survey of real estate agents again found widespread, but generally minor, disruptions to mortgage closings throughout the United States due to the CFPB’s integrated disclosure rule known as TRID. TRID did affect December closings, manifesting as the second month of slight increases in closing times and in the percent of missed closings. “Most housing market metrics continue to be strong, despite the onset of TRID and the entry into the winter season,” said the report, which is sponsored by Inside Mortgage Finance, an affiliated newsletter. Further, “Closing times metrics are still showing a minor effect of TRID, and the predicted significant impact in December did not materialize.” The report also provided ...