In a potential legal coup for Fannie Mae and Freddie Mac shareholders, Federal Claims Court Judge Margaret Sweeney ordered the U.S. Treasury Department and Federal Housing Finance Agency to turn over another large batch of documents in relation to the Fairholme Funds Inc. v. United States, et al. net worth sweep case. Sweeney this week forced the government agencies to produce more documents, close to 60 this time, for the plaintiff’s attorneys. The agencies have attempted to keep the various memos, emails, presentations and other communications hidden under executive privilege. Shareholders say...

The Department of Veterans Affairs is working on a change to its existing streamline refinancing policy to address a problem that is giving VA and Ginnie Mae the fits. Under the VA’s qualified-mortgage rule, a VA borrower must wait six months and show six months’ worth of mortgage payments before they can refinance into an IRRRL (Interest Rate Reduction Refinance Loan) and take advantage of the lower rate. However, it seems not all VA lenders are adhering to the rule and that a good number are refinancing veterans into IRRRLs even before the mandatory seasoning period ends for fear interest rates might rise and the borrower might not benefit from the lower rate. “I’ve redone the numbers in 20 different directions on how much a borrower would save if they had to wait two more months and the rate went up a quarter of a point because they lost those two months ...

The Department of Housing and Urban Development is set to receive more than $140 million in settlements with three individual lenders in connection with defective loans they originated with FHA insurance. Freedom Mortgage Corp., M&T Bank, and Land Home Financial Services all reached separate agreements this year with the Department of Justice on behalf of the HUD Inspector General to resolve the allegations. On April 15, Freedom agreed to pay $113 million, in response to charges that “it engaged in certain conduct in connection with its origination, underwriting, property appraisal and quality of certain single-family mortgages insured by FHA.” The disputed forward loans were insured by FHA between Jan. 1, 2006, and Dec. 31, 2011, which resulted in claims submitted to HUD on or before June 15, 2015. HUD incurred substantial losses when it paid claims on the ...

VA Home Loan Guaranty has issued clarification regarding title requirements for manufactured or mobile homes conveyed to the Department of Veterans Affairs. Effective immediately, VA is requiring proof of noteholders’ compliance with the agency’s requirements for guaranteed mobile-home financing. Foreclosure title packages that do not include the required documents will be rejected, the agency warned. Under federal law, a manufactured home must be permanently affixed and classified as real property in the state where it is located. VA will not guarantee financing if the property does not meet the criteria. To ensure that a guaranty claim is fully payable and that the holder has the option to convey the manufactured home to VA, servicers must ensure that home loans with a VA guarantee meet federal requirements. Under the clarified VA guidelines, servicers may submit the ...

New FHA guidance for dealing with mortgages with a Property Assessed Clean Energy (PACE) obligation went into effect last week but uncertainty lingers and its full impact remains to be seen, according to an industry attorney. The Department of Housing and Urban Development has issued guidance specifically allowing properties encumbered by a PACE lien to be eligible for FHA mortgage financing for both purchase and refinance loans. The department of Veterans Affairs has issued similar guidance. According to Erika Sonstroem, an attorney with the law firm Bradley Arant Boult Cummings, the PACE industry is touting the guidance in its pitches to lenders as posing no risk to mortgage investors. PACE is a program that lends money to homeowners for home-energy savings projects. It is treated much like a tax lien on a property and is included in the ...

Industry trade groups have yet to weigh in on the CFPB’s TRID clarifying rulemaking, but the grassroots rank-and-file have, and many of them are raising more concerns and questions. For instance, Ross Miller, president of Miller Home Mortgage in Metairie, LA, complained that there are no exceptions for the three-day waiting period when there is an emergency. “I had a client whose father was quickly scheduled for open heart surgery,” he said in a comment letter. “The client was ...

It’s been almost a year now since the CFPB’s integrated disclosure rule went into effect, and industry participants across the credit spectrum appear increasingly comfortable with the new disclosure regime. But when it first came out, the rule took all the oxygen from the room and caused more fear and anxiety that, in retrospect, appears to be have been justified, according to a handful of experts in the non-prime mortgage origination space. Speaking during ...

Wells Fargo Chairman and CEO John Stumpf will be on what is expected to be a very hot seat before the Senate Banking, Housing and Urban Affairs Committee tomorrow when he is expected to explain what went wrong at his institution that enabled employees to open more than two million deposit and credit card accounts that may not have been authorized by consumers. CFPB Director Richard Cordray is also scheduled to testify, as is Comptroller of the Currency Tom Curry and ...

First it was Corinthian Colleges, then ITT Educational Services. Now, Bridgepoint Education Inc. has been taken to task by the CFPB over alleged misconduct. Last week, the bureau brought a $31.5 million enforcement action against the for-profit post-secondary education company based in San Diego, accusing it of deceiving students into taking out private student loans that cost more than advertised....

Even Under Trump, Would the CFPB Be Invincible? If businessman Donald Trump wins the White House in November, the CFPB would be in the Republican’s crosshairs for sure. But the bureau’s recent consumer fraud case against Wells Fargo for opening up roughly two million deposit and credit card accounts without authorization has caused such outrage nationwide that it may very well give the controversial regulator a “shield” of sorts. At least that’s what we’ve been…