The FHA is reportedly considering reinstating “spot” loans in condominium projects that were not on its approved development list to boost FHA-insured condo lending. Spot loans are currently prohibited, but the FHA is said to be reevaluating the product because of reports of first-time homebuyers having difficulty in obtaining FHA financing for condo unit purchases and seniors seeking reverse mortgages to tap the equity in their units. The National Association of Realtors is trying to break the impasse between the FHA and reluctant board of directors of condo projects that do not have FHA certification to resolve the financing issue. FHA-insured condominium lending has dropped to $884.4 million in the first quarter of 2014, down 70 percent from the $2.98 billion in total originations reported in the first quarter of 2013, according to Inside FHA Lending’s analysis of agency data. Even as the NAR tries to ...

Ginnie Mae is now approving applications to issue agency mortgage-backed securities in as little time as six months, a far cry from two years ago when it took as long as 24 months, according to figures provided to Inside FHA Lending. In fiscal year 2013, which ended September 30, the agency approved 77 out of 122 new issuer applications. Since the beginning of the current fiscal year through April, the agency has processed 47 new applications resulting in 20 approvals. A spokesman for Ginnie noted that the number of applications processed in fiscal 2014 was impacted “by the government shutdown” but also by the development of a new online application tool that will be rolled out this year. “The time it takes to get a Ginnie Mae approval has been getting better – as in faster,” said David Lykken, managing partner of Mortgage Banking Solutions, a consulting and advisory firm. “It’s true that the number of ...

The Department of Housing and Urban Development has outlined steps FHA lenders must take following the successful deployment of a new system for requesting changes and notifications as well as completing their annual recertification.The changes became effective on May 27, 2014, as the new system, Lender Electronic Assessment Portal (LEAP), went live. All of FHA’s approximately 2,500 approved lenders will now use LEAP for their annual recertification and business updates and changes. Senior HUD officials, who requested anonymity, said the transition from the Lender Assessment Subsystem (LASS) and the Institution Master File (IMF) to LEAP is almost complete, except for a few kinks HUD staff is working out. “The change in the IMF is noteworthy because it was the repository for information about all FHA lenders and it had been operating on outdated technology for a long time,” said one agency executive. “All essential information about all FHA lenders is now consolidated in a ...

HUD Nominee Picks Up Support from Grassroot Activists, Home Builders. San Antonio Mayor Julian Castro, President Obama’s pick to replace Secretary Shaun Donovan at the Department of Housing and Urban Development, has won support from the National Community Reinvestment Coalition and the Center for Responsible Lending and the National Association of Home Builders. “Mayor Castro’s experience and strong commitment to neighborhood revitalization and community development will be critical to the recovery of communities still reeling from the housing crisis,” said NCRC President and CEO John Taylor. “We welcome his leadership and look forward to working in partnership with him to increase access to affordable housing and create vibrant, healthy communities.” CRL President Mike Calhoun noted Castro’s long record of ...

When it comes to the legal theory of disparate impact and the Supreme Court of the United States, perhaps the third time around will be the charm. Recently, the Texas Department of Housing and Community Affairs requested the nation’s highest court to agree once again to take on the issue of disparate impact under the Fair Housing Act. The questions presented to the high court in Texas Department of Housing and Community Affairs, et al., Petitioners v. The Inclusive Communities Project, Inc. are...

There has been a resurgence of city lawsuits lately against major banks seeking to recover lost property tax revenues, which city officials say were needed to pay for expensive foreclosure-related city services. The latest in these lawsuits was filed by the City of Los Angeles against JPMorgan Chase alleging discriminatory mortgage lending led to a wave of foreclosures that continues to diminish revenue for basic city services. The new litigation against Chase comes...

Aurora Loan Services, once a huge player in the non-agency subprime and Alt A market, has agreed to resolve a class-action lawsuit alleging it duped distressed borrowers into paying monthly fees on nonperforming loans that were already destined for foreclosure. The $5.3 million settlement will be split among 15,000 California borrowers who signed bogus loan-workout agreements with the false hope of curing their deficiencies and keeping their homes. Borrowers claimed that Aurora had misled them into thinking that their foreclosures were on hold while they were being considered for loan modification. In reality, however, Aurora’s policy was...

Expect it to take years for the courts to resolve lawsuits filed by private investors in Fannie Mae and Freddie Mac stock, with the odds heavily stacked in the government’s favor, note industry observers. Speaking during a recent Bloomberg Industries webinar on Fannie Mae and Freddie Mac litigation, Brooklyn Law School Professor David Reiss noted it could take the courts up to a year simply to resolve the introductory motions.

Look for the various lawsuits filed by private owners of Fannie Mae and Freddie Mac stock against the federal government to take a “very long time to be decided,” as the courts may take up to a year to resolve just the introductory motions, according to a legal expert. Beyond that, the litigation over shares in the two government-sponsored enterprises could stretch out to the U.S. Supreme Court. Brooklyn Law School Professor David Reiss, speaking during a Bloomberg Industries webinar last week, noted that lawsuits stemming from the savings and loan debacle of 20 years ago give a sense of the possible timeframe, but litigation brought by disenfranchised Fannie and Freddie investors against the government offers an entirely different and deeper set of legal complexities. “These are...

In a noteworthy reversal of partisan roles, Democrats on the House Financial Services Subcommittee on Oversight and Investigations last week found themselves uncomfortably backing away from an opportunity to take up the cause of female, minority and older employees at the CFPB, out of fear they might undermine what is arguably their favorite regulatory agency. Ranking Member Al Green, D-TX, succinctly summed up the anxiety felt by his side of the aisle when he said, “I am concerned that some people might use the information in this hearing that would weaken, emasculate or eviscerate the CFPB.” Meanwhile, the bureau-bashing Republicans, who have studiously tried to re-brand themselves as friends of “the little guy” ever since the CFPB opened for business...