The Department of Housing and Urban Development sold 62,062 distressed loans in 2013 through its expanded Distressed Asset Stabilization Program (DASP) to increase recoveries to FHA’s Mutual Mortgage Insurance Fund. HUD made 10 offerings of nonperforming FHA-insured loans in a series of quarterly competitive auctions last year, participated in by pre-qualified bidders, including nonprofit organizations. The defaulted single-family mortgages were provided by FHA-approved loan servicers and sold through large national pools and “neighborhood stabilization outcome” pools. The NSO pools consist of loans in ...

Program eligibility is one of the top five reasons a loan can get an “unacceptable” rating in a post-endorsement technical review of a targeted sample of FHA loans. In a sample review conducted by FHA between July 1, 2013, and Sept. 30, 2013, 10 percent of the 6,692 targeted loans were defective due to program eligibility. Of that 10 percent, 76 percent were rated unacceptable by FHA. The results reflect the initial rating of each file reviewed during the quarter, which include conforming, deficient and unacceptable. An unacceptable rating may change if the lender submits mitigating documentation to FHA. But even if subsequently mitigated, the fact ...

Lenders whose fiscal years ended on Oct. 31 or Nov. 30, 2013, must complete their annual recertification by their respective deadlines, Jan. 31 and Feb. 28, 2014, or face dire consequences, the FHA warned. These lenders must complete their recertification through the current system, the Lender Assessment Sub-System (LASS), which will soon be retired and replaced with the Lender Electronic Assessment Portal (LEAP). The LASS enables lenders to submit their information, including net worth, liquidity and audited financial data, electronically. LEAP will go live in April and ...

Ginnie Mae, Japan Sign Joint MOU; Russia Gets Help In Launching First MI. Ginnie Mae is helping Japan and Russia transition from their current secondary mortgage market structures to the U.S. company’s model. On Jan. 9, Ginnie Mae and Japan Housing Finance Agency signed a joint memorandum of understanding to exchange information and help Japan create a securities program tailored after Ginnie Mae’s successful mortgage-backed securities program. Japanese Prime Minister Shinzo Abe has directed the JHFA to make the transition within three to five years. Under the MOU, the two countries will hold ...

A lot of prospective homebuyers may be shut out of the market if their mortgage financing can’t pass muster with the Consumer Financial Protection Bureau’s qualified-mortgage standard, congressional testimony this week suggested. Witnesses from The Peoples Bank Company, of Coldwater, OH, and Quicken Loans said during a House Financial Services Financial Institutions Subcommittee hearing this week that their firms plan to stay away from making mortgages that don’t fit into either the safe harbor or the rebuttable-presumption QM boxes. “There is...

It is not a matter of “if” or even “when” but rather “how” the remaining defendants settle lawsuits filed by the Federal Housing Finance Agency over billions in non-agency MBS sold to Fannie Mae and Freddie Mac in the years leading up to the housing crisis. Last week, the FHFA announced it recovered $7.88 billion in civil settlements in 2013 from seven of the 18 defendants the agency took to court in 2011. Eleven firms have yet to settle, with Bank of America facing the largest exposure because of its ownership of Countrywide Financial Corp. and Merrill Lynch, two of the largest issuers in the now-defunct subprime MBS market. In its original claim, the conservator of Fannie and Freddie accused...[Includes one data chart]

The Federal Housing Finance Agency said it recovered $7.88 billion in civil settlements in 2013 from less than half of the 18 defendants it is suing over billions of dollars in losses from toxic non-agency mortgage-backed securities sold to the GSEs before the housing crisis. Seven of the big banks made deals with Fannie Mae’s and Freddie Mac’s conservator to get out from under the massive MBS litigation effort launched by the FHFA in 2011.

State attorneys general and officials at the Consumer Financial Protection Bureau suggest that their settlement in December with Ocwen Financial doesn’t end their quest to reform the industry. “We are not out of the woods yet, and we will not be until all mortgage servicers understand that they must step up and toe the line,” said Richard Cordray, the director of the CFPB. The top five servicers have now agreed...

Consumer complaints submitted to the CFPB continued moving somewhat erratically on a quarterly basis, generally dropping in the aggregate by 15.0 percent during the fourth quarter, led by a 33.3 percent fall in mortgage gripes, according to a new analysis of bureau data by Inside the CFPB. Also, grievances with consumers’ credit card experiences fell 17.6 percent for the period, followed by credit reports, off 17.5 percent; consumer loans, down 13.1 percent; and bank accounts, which declined by 12.5 percent. (INCLUDES TWO CHARTS)...

The CFPB and authorities in 49 states and the District of Columbia filed a proposed court order requiring the country’s largest nonbank mortgage loan servicer, Ocwen Financial Corp., and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in principal reduction to underwater borrowers. The bureau said the consent order “addresses Ocwen’s systemic misconduct at every stage of the mortgage servicing process.” Ocwen also is required to refund $125 million to the nearly 185,000 borrowers who have already been foreclosed upon, the CFPB...