Twenty-five lenders either settled or lost their FHA approval for a full year because they failed to complete their annual recertification requirement, while 21 others were subjected to enforcement actions because their origination or servicing files did not meet FHA requirements. Results from cases heard by the Department of Housing and Urban Development’s Mortgagee Review Board in 2012 and 2013 showed that the board used all enforcement tools at its disposal. Specifically, the board took the following actions: Assessed money penalties of more than $1.5 million; imposed fees, refunds and principal buydowns totaling $1.2 million; required indemnification on 163 FHA-insured loans; withdrew FHA approval of four lenders; suspended the FHA approval of one lender; and placed one lender’s approval on probation. Violations were related to ...

The FHA’s widespread reduction in loan limits for 2014 has had a mixed impact on production levels so far this year, according to a new Inside FHA Lending analysis of FHA endorsement data. Through the first four months of 2014, FHA endorsements were down 55.6 percent from the same period last year. But in counties where loan limits were lowered, FHA production was down 57.5 percent from early 2013. In the relatively few counties where loan limits actually increased in 2014, FHA endorsements were also down from a year ago, but by a less severe 47.4 percent. The biggest decline in endorsements has been in refinances, especially FHA-to-FHA refinances. In areas with lowered loan limits, production of these loans has plummeted 87.0 percent, and even areas with raised loan limits saw an 81.1 percent drop in streamlined refis. Purchase-mortgage originations have taken less of a ...

The delinquency rate for residential FHA-insured mortgages fell at the halfway mark of 2014 from the end of the fourth quarter last year, a result of improved overall loan performance, strong credit standards and an improving, albeit slowly, economy, an Inside FHA Lending analysis of agency data suggests. Although the number of FHA lenders included in the analysis has doubled since year-end 2013, delinquency rates in the 30-60 days and 90-day plus buckets appear to be trending downward. As of June 30, FHA delinquencies across the board were down to 13.3 percent from 15.2 percent as of Dec. 30, 2013. The seriously delinquent rate – the percentage of loans that are 90 days or more past due – has dropped to 7.14 percent from 8.08 percent over the same period. The delinquency rate of FHA loans that are at least one payment past due also fell to ... [1 chart]

Ginnie Mae is taking its issuer approval process online effective Sept. 1, 2014. Entities seeking to become an approved issuer of Ginnie mortgage-backed securities must file their applications electronically through the new Application Connection (AC), which is on the agency’s website. Ginnie Mae will no longer accept paper applications after July 31 as it shifts from the old to the new system. The agency is strongly encouraging potential applicants to complete two required courses through the Ginnie Mae Online University before filling out an application to become a Ginnie Mae MBS issuer. The courses are “Ginnie Mae 101” and “Applying to Ginnie Mae.”The two mandatory courses and the Ginnie Mae Online University provide free training and how to apply for approval, as well as the role and responsibilities of a Ginnie Mae issuer in ...

Comment Period for Single Family Handbook Extended. The FHA has extended from July 29 to Aug. 15, 2014 the deadline for submitting feedback on certain sections within the draft Single Family Handbook. Comments are being sought on sections “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and compliance." Both sections’ contents, as well as supporting information, are posted for review and feedback on the SF Drafting Table in the FHA website. Each section’s web page also contains highlights of changes, frequently asked questions (FAQs) and a feedback response worksheet. Julian Castro as New HUD Secretary. Julian Castro was sworn in as the 16th Secretary of the Department of Housing and Urban Development on July 28. He replaces Shaun Donovan, who is now director of the ...

A Fannie Mae real estate-owned contractor engaged in a “clear pattern” of neglecting Fannie-owned vacant foreclosed homes in black and latino neighborhoods compared to white neighborhoods in four different cities, according to a discrimination complaint filed with the Department of Housing and Urban Development this week. The National Fair Housing Alliance and two partners allege that Brandon, FL-based Cyprexx Services violated the federal Fair Housing Act by neglecting minority-owned Fannie REOs.

A federal judge last week granted limited discovery to a hedge fund representing a group of Fannie Mae and Freddie Mac shareholders as they challenge the government’s “net worth sweep” of their profits. However, the court will keep a tight lid on public access to the documents in a nod to the government’s claim that a leak could have dire economic consequences on the mortgage market. Fairholme Capital Management has been pushing hard for discovery and access to internal government documents since the shareholder filed suit last summer demanding that the Treasury Department void its August 2012 Third Amendment to its preferred stock purchase agreement with Fannie and Freddie.

Mortgage lenders and other financial services providers are up in arms about a new Consumer Financial Protection Bureau proposal to allow consumers to post narrative complaints about companies in the agency’s online complaint database. The bureau wants to expand the current database to include “unstructured consumer complaint narrative data.” A consumer who submits a complaint will be given the opportunity to check a consent box giving the bureau permission to publish his or her narrative. Where the consumer provides consent to publish the narrative, the related company will be given...

The CFPB filed a lawsuit in a federal district court last week against Frederick J. Hanna & Associates, based in Marietta, GA, and its three principal partners – Frederick J. Hanna, Joseph Cooling, and Robert Winter – accusing them of operating a debt-collection lawsuit mill that used illegal tactics to intimidate consumers into paying debts they may not owe. “The CFPB alleges that the firm operates like a factory, producing hundreds of thousands of debt- collection lawsuits against consumers on behalf of its clients, which mainly include banks, debt buyers and major credit card issuers,” the bureau said. Between 2009 and 2013, the firm filed more than 350,000 debt-collection lawsuits in Georgia alone, according to the CFPB. The bureau further alleged the ...

The CFPB recently ordered ACE Cash Express of Irving, TX, one of the largest payday lenders in the United States, to pay a $10 million fine for allegedly using illegal debt-collection tactics – including harassment and false threats of lawsuits or criminal prosecution – to pressure consumers into debt traps they couldn’t afford and couldn’t get out of. The bureau said it found that ACE used these illegal debt-collection tactics to create a false sense of urgency to lure overdue borrowers into payday debt traps. “ACE would encourage overdue borrowers to temporarily pay off their loans and then quickly re- borrow from ACE,” the CFPB said. Even after consumers explained to ACE that they could not afford to repay the loan, the ...