An internal audit found as many as 136 borrowers not living in the properties for which they have obtained FHA-insured reverse mortgages because they were also receiving federal housing assistance under a different address. The Department of Housing and Urban Development’s Office of the Inspector General discovered the anomaly during a follow-up review of HUD’s oversight of the home-equity conversion mortgage program to ensure HECM borrowers comply with residency requirements. A previous audit had red-flagged potential residency violations. In the latest review, auditors analyzed HUD’s data warehouse for single-family mortgages and its public housing information system from April 2011 through March 2014 and identified 159 potential violators of the residency rule. Of those potential violators, 136 were found to be not occupying the properties associated with their HECM loans but, instead, ...
Like all new automated systems, FHA’s Lender Electronic Assessment Portal (LEAP 3.0) was not without technical glitches when the agency rolled it out back in May. Users immediately reported difficulties in certain functions, such as adding new branches, making changes to existing branches and changing cash flow accounts. The FHA ever since has been working to iron out the kinks to allow lenders to submit their annual recertification packages with ease. So far, certain fixes have been implemented allowing lenders to add, edit and delete branch and regional managers, delete attachments uploaded to LEAP and properly update cash flow accounts in the database. The FHA also changed the way lenders edit their principal affiliations in LEAP. In addition, newly approved lenders now have access to the new system. Furthermore, the FHA expanded to 250 the maximum allowable characters lenders may use when ...
Ginnie Mae issuance for the first nine months of 2014 totaled $207.5 billion as government-backed purchase-mortgage activity picked up in the third quarter, according to an analysis of agency data. New issuances rose 19.8 percent from the second quarter. FHA loans accounted for $116.9 billion of new Ginnie Mae issuances while VA and the Rural Housing Development funneled $75.9 billion and $14.2 billion, respectively, of new loans into Ginnie Mae pools. Mortgage securities backed by home-equity conversion mortgages are not included. Purchase mortgages totaling $140.6 billion comprised the bulk of new issuances over the nine-month period while the share of refinances totaled $49.8 billion. Modified loans accounted for $17.1 billion. Most of the FHA and VA loans originated during the first nine months came through the ... [ 2 charts ]
FHA to Extend Short Refi Program. The FHA has announced its intent to extend its Short Refinance Program for borrowers in negative equity positions. A mortgagee letter will be issued soon to announce the extension. Feedback Period extended for Draft Servicing Section of Proposed Single Family Handbook. The FHA is extending the comment period for the draft servicing section of the Single Family Housing Policy Handbook through Nov. 14, 2014 to allow stakeholders additional time to study and comment on the proposed section. The original deadline date was Oct. 17. CFPB Updates Reverse Mortgage Guide. The Consumer Financial Protection Bureau recently updated its reverse mortgage guide on its website to account for recent changes made by the Department of Housing and Urban Development to its Home Equity Conversion Mortgage program. The updated guide highlights new limits to ...
As Inside the CFPB was going to press, the bureau announced a $35 million enforcement action against Flagstar Bank for allegedly blocking borrowers’ attempts to save their homes, in violation of the CFPB’s mortgage servicing rules. This is the first enforcement action the bureau has initiated based on the new regulation. The regulator alleged that the bank closed borrower applications due to its own excessive delays. “Flagstar took excessive time to review loss mitigation applications, often causing application documents to expire,” said the agency. “To move its backlog, Flagstar would close applications due to expired documents, even though the documents had expired because of Flagstar’s delay.” The CFPB also accused the bank of delaying the approval or denial of borrower ...
Corinthian Colleges accused the CFPB earlier this month of wrongly disparaging the career services assistance the for-profit company offers and of mischaracterizing both the purpose and practices of its “Genesis” lending program. The CFPB filed a lawsuit against the company earlier this month. In a statement provided to Inside the CFPB, Corinthian Colleges said the bureau’s complaint ignores “clear, easily obtainable evidence” that thousands of its graduates are hired into permanent positions by large and small employers across the U.S. every year. Instead, the complaint cites isolated incidents at Corinthian’s 97 U.S. campuses that violated company policy regarding job placement policies, the firm added. “The CFPB is aware of these cases because Corinthian identified the issues, took strong action to ...
Ginnie Mae has unveiled new plans for issuer standards as well as steps to boost liquidity in the mortgage servicing rights (MSR) market. Agency officials at a summit hosted by Ginnie Mae this week in Washington, DC, said both actions are designed to avoid issuer failures and to preserve residential mortgage servicing as an economically viable activity and MSRs as an attractive asset class. The officials said changes will be made to Ginnie’s mortgage-backed securities program to support the agency’s transformation from a pre-crisis bank-driven government MBS program to a post-crisis program where non-depositories and smaller financial institutions play a much bigger role. By the middle of next year, approximately a third of Ginnie MSRs will have changed hands over the previous four years, agency officials said. Many of the new owners of the servicing rights are ...
Approved issuers must ensure that loans have the requisite federal insurance or guarantee before bundling them for securitization, cautioned Ginnie Mae. Loans that fail Ginnie’s “loan matching” review will be tagged as “uninsured” and will not be accepted for securitization, according to John Kozak, a Ginnie Mae account executive and a panelist at a conference sponsored by the agency this week. Ginnie Mae uses loan matching to screen for mortgages that may have been endorsed on paper but have not been actually insured or guaranteed by either the FHA, VA or the Department of Agriculture’s Rural Housing Development. Every month, Ginnie Mae takes a certain lender’s entire mortgage portfolio and throws it up against the agency’s insured/guaranteed database in search for loan mismatches. To do this, the agency uses “two-string match” criteria, which consist of a ...
An estimated $336 million out of a $614 million settlement that JPMorgan Chase agreed to pay for not complying with FHA requirements will go towards stabilizing the agency’s ailing Mutual Mortgage Insurance Fund. On Feb. 4, 2014, the U.S. Attorney’s Office for the Southern District of New York took over a whistleblower lawsuit and started an investigation of Chase on behalf of the government for alleged violations of the False Claims Act. The whistleblower or “relator” alleged that Chase, an approved FHA direct endorsement lender, had not followed FHA requirements when underwriting loans, causing the MMIF to incur significant losses when the borrowers defaulted on their loans. The U.S. Attorney filed suit against Chase based on the results of an audit conducted by HUD’s Inspector General that looked into the bank’s underwriting and refinancing of FHA loans. The lawsuit alleged that ...
CFPB Deputy Director Steve Antonakes told attendees at the North Carolina Bankers Association’s mortgage conference last week that lenders need to start prepping for the bureau’s impending TILA/RESPA Integrated Disclosure rule, known in bureau-speak these days as the “TRID.” While the use of the TRID’s new Loan Estimate and Closing Disclosure forms is not required until August 2015, “mortgage lenders should already be working on the new rule and getting ready now,” Antonakes urged. “Significant changes to business operations and technology platforms will require close collaboration with third-party service providers. “While many mortgage institutions are already deep into implementing these changes, we want to make sure that everyone understands the need to be focusing on August 2015 now,” Antonakes emphasized...