The Community Mortgage Lenders of America has asked the CFPB to exempt smaller independent mortgage bankers from examinations or audits. The CFPB currently has active examinations for IMBs.

The FHA’s Mutual Mortgage Insurance Fund is generally healthy but for its Home Equity Conversion Mortgage program, according to the latest FHA audit of the MMIF. In its 2018 report to Congress this week, the Department of Housing and Urban Development had good and bad news regarding the financial condition of the insurance fund. The good news is that the economic value of the MMIF, which backs the FHA’s single-family loan programs, increased to $34.7 billion in fiscal 2018 from $26.7 billion a year ago. Total capital resources rose to $49.2 billion from $40.9 billion during the same period. For the fourth consecutive year, the fund exceeded its statutory capital reserve ratio of 2.00 percent. The ratio rose to 2.76 percent in 2018 from 2.18 percent last year. Premium reductions, had they been in effect, would have reduced the fund’s economic net worth and dropped its capital ratio, industry ...

The FHA is recommending a statutory change to strengthen the Mortgagee Review Board’s authority in lender enforcement. The agency discussed the merits of enhancing MRB’s powers in a 2018 audit report on the health of the Mutual Mortgage Insurance Fund. While the goal of a stronger MRB is not new, it has taken on a new urgency in discussions between the Department of Housing and Urban Development and the Department of Justice regarding the use of the False Claims Act in FHA enforcement. The DOJ and HUD have used the statute to pursue lenders that have inflicted millions of dollars in losses on FHA due to misrepresentation, carelessness and generally sloppy underwriting. Lenders, on the other hand, have complained about the agencies’ indiscriminate use of the FCA against even the slightest technical error. The FCA and its treble-damages provisions have squeezed billions of dollars ...

Increasingly worried about the financial condition of its largest nonbank issuers amid declining market conditions, Ginnie Mae in late October shot off a liquidity letter to 14 companies, asking them to develop contingency plans. The identity of the firms was not revealed to Inside FHA/VA Lending, but it’s no secret which companies rank among the top echelon of issuer/servicers. The five largest nonbank Ginnie MBS servicers as of Sept. 30 are PennyMac Financial Services, Lakeview Loan Servicing, Freedom Mortgage, Quicken Loans and Mr. Cooper. According to the letter, a copy of which was obtained by this publication, Ginnie wants the companies to develop strategies to right-size their operations. One of the agency’s goals is to lay the groundwork for financial stress tests that all issuer/servicers eventually must meet. Ginnie expects to sit down with the executive management teams of the ...

Acting CFPB Director Mick Mulvaney is perceived as someone who’s taking a softer touch on enforcement matters than his predecessor, but nonbank mortgage originators are still being examined at a regular clip, according to industry attorneys As for how many lenders are being examined each year, that’s a different matter. The agency, as a practice, does not disclose those figures. “We’ve had a significant number of nonbank clients get examined by the CFPB ...

Lenders no longer need to start complying with the CFPB’s payday-lending rule on Aug. 19, 2019, a judge ruled. In an unexpected development, Judge Lee Yeakel of the U.S. District Court for the Western District of Texas Austin Division last week reversed his prior orders that denied the request to delay the compliance date of the payday rule. The case was filed by two industry groups – Community Financial Services Association of America and Consumer Service Alliance of Texas ...

Goldman Sachs has forgiven a total of $78.7 million in principal on 746 first-lien mortgages since Aug. 1, 2018, as it neared fulfillment of a $1.8 billion consumer-relief obligation under two mortgage-related settlement agreements, according to independent monitor Eric Green.

The Department of Housing and Urban Development’s inspector general recommended that HUD pursue the collection of $5.7 million in surplus proceeds it is entitled to reclaim from 2017 loan terminations. The IG found $6.8 million in uncollected surplus proceeds from non-conveyance foreclosures in the possession of custodians. The IG said it initiated a review when it discovered while doing an unrelated audit that a trustee attorney held surplus proceeds from two non-conveyance foreclosures and HUD had not claimed these funds to offset earlier partial claims it had paid for the properties. The latest audit found that HUD did not always do its job. Of the 81 foreclosures reviewed, 32 had nearly As a result, an estimated $6.8 million in surplus proceeds never made it into the FHA insurance fund. Various third parties benefited at HUD’s expense, and the unclaimed funds sat dormant with custodians. The IG recommended ...

FHA-approved servicers will now find it easier to file a Home Equity Conversion Mortgage claim under revised HECM rules announced by the Department of Housing and Urban Development last week. The new requirements apply to HECM loans that have reached 98 percent of their maximum claim amount, according to Mortgagee Letter 2018-08. The revised rules took effect on Oct. 22, but HUD will accept public comments for a period of 30 calendar days. Compliance experts say the change is good news for a program that has been experiencing substantial losses and lower volumes. Significant revisions were made last year to cut losses and make the product more efficient, but they have not been enough, said FHA Commissioner Brian Montgomery. Under the revised rules, HECM servicers can use alternative supporting documentation in lieu of previously required materials that ...

Certain potential changes could materially affect origination volume and determine the government-sponsored enterprises’ direction going forward, according to analysts. One of those changes could have a significant impact on the FHA market. Wells Fargo Securities analysts recently looked at three potential developments in the Fannie Mae/Freddie Mac sphere and evaluated their effects on the broader mortgage market. Two of those potential changes – loan limits and guarantee fees – are controlled directly by the Federal Housing Finance Agency, while the third relates to the temporary GSE qualified-mortgage exemption, or “QM patch,” which could affect the FHA market. All three factors loom over the mortgage landscape as the FHFA expects a new director in January 2019, who is likely to be more right leaning and could shift the focus back to shrinking the ...