Reporting on VA Loans Impacted by Natural Disaster. The Department of Veterans Affairs is cautioning servicers against reporting as delinquent VA loans that are impacted by a natural disaster. The electronic default notification (EDN) should only be reported prior to the 61st day of delinquency if the borrower intends to abandon the property or pursue an alternative to foreclosure, according to VA. Cite “property problems” as the reason for default, the agency added. On the 61st day of delinquency, servicers should use “casualty loss” as the reason for default when reporting the EDN. This will help VA identify loan defaults caused by a natural disaster. Texas USDA Guaranteed Housing Program See Increased Volume. The USDA guaranteed single-family guaranteed housing programs in the Lone Star State are experiencing significant volume increases, and consequently, ...

The Federal Housing Finance Agency, Fannie Mae and Freddie Mac are questioning the logic behind a recent federal court ruling that appears to give investors in the government-sponsored enterprises’ stock a glimmer of hope in their legal battles with the federal government.

Ginnie Mae has made considerable progress in dealing with rapid prepayments on VA loans but prepayment speeds on Ginnie mortgage-backed securities in general continue to annoy investors. Prepay speeds on Ginnie MBS are now at the lowest since 2014 but it is not enough for agency Executive Vice President Maren Kasper to feel confident as she addressed the annual convention of the Mortgage Bankers Association this week. “Our prepayment issue is not solved,” said Kasper, as she spoke on a panel with representatives of government-lending programs. The agency continues to hear from investors about the problem, she said. Kasper cited two instances where Ginnie officials were summoned to meetings in China and New York to explain the prepayments to irate investors. They threatened to stop purchasing Ginnie bonds, she said. Kasper declined to say how bad the ...

Community mortgage lenders are asking the U.S. Senate to consider with caution before voting on legislative language passed recently by the House of Representatives to address “orphan” VA streamline refinance loans. Specifically, the Community Mortgage Lenders of America asked the Senate to step back and allow some time for substitute language to be presented with input from the industry and the Department of Veterans Affairs. At issue is the wording in H.R. 6737, the Protect Affordable Mortgages for Veterans Act of 2018. The bill fixes a technical issue that prevented VA lenders from pooling certain VA Interest Rate Reduction Refinance Loans in Ginnie Mae mortgage-backed securities pools. Approximately 2,500 VA refi loans were affected by an inconsistency between the loan seasoning guidelines issued by Ginnie in late 2016 and provisions in the ...

The Department of Veterans Affairs will begin a new rulemaking on qualified mortgages to conform to Dodd-Frank reform act mandates. Observers say the move is simply housekeeping, since the previous QM interim final rule (IFR) requirements were rendered moot with the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act back in May. The new law, also known as the Dodd-Frank reform act, superseded the previous rule’s seasoning and recoupment requirements for VA Interest Rate Reduction Refinance Loans. Specifically, the act removed the category of rebuttable presumption for IRRRLs deemed as QM under the interim final rule. It also imposed new requirements that were not considered at the time the IFR was issued. The VA did not say whether changes were made ...

Outside counsel for nonbank lender Castle & Cooke Mortgage disputed several statements included in an Oct. 12 Inside Mortgage Finance article about the firm and one of its investors.

The CFPB recently settled with Bluestem, Eden Prairie, MN, over allegations that the group of firms unfairly delayed payment transfers to third-party debt buyers. The settlement will require the companies to pay a civil money penalty of $200,000. The CFPB alleged that the Bluestem companies, between 2013 and 2016, delayed forwarding payments for more than 31 days in 18,000 instances. In 3,500 of those instances, Bluestem allegedly delayed [Includes four briefs] ...

HSBC has agreed to pay $765 million in civil penalties under a settlement agreement with the Department of Justice to resolve allegations it misled investors on the quality of its residential MBS and the accuracy of its due diligence procedures.

A recent court ruling that affirmed the validity of claims that the GSE net worth sweep breached an implied covenant of good faith is a big deal for shareholders, according to the plaintiff’s attorney.David Thompson of Cooper and Kirk told Inside The GSEs this week that U.S. District Judge Royce Lamberth’s decision is a “significant victory” for the plaintiffs.

A federal judge in Washington last week dismissed a securities fraud lawsuit against Zillow, ruling its co-marketing program does not violate the Real Estate Settlement Procedures Act.