FHA insured approximately $1.9 billion of ineligible mortgage loans made to borrowers with delinquent federal debts or who are subject to federal administrative offset for past-due child support payments, according to the Department of Housing and Urban Development’s inspector general. Approximately 9,500 loans were ineligible because the sources used by lenders to identify ineligible borrowers lacked sufficient information to raise red flags. In addition, FHA failed to guide lenders adequately in reviewing child support payments, the IG said. Federal law prohibits loans, loan guarantees or insurance to delinquent federal debtors, including those with delinquent child support subject to administrative offset, until the delinquency is resolved. Auditors drew a statistical sample of 60 loans from 13,927 FHA-insured loans that closed in 2016 and analyzed data on their related borrowers in the ...
More Fannie Mae and Freddie Mac shareholders have initiated lawsuits against the government for the Treasury sweep of the mortgage giants’ profits. Each of the plaintiffs in the three new cases were owners of the GSEs’ junior preferred stock. The cases, Akanthos v. U.S., CSS v. U.S. and Appaloosa v. U.S., have been assigned to Judge Margaret Sweeney, who is also handling other similar complaints. They were filed in the U.S. Court of Federal Claims. According to court documents, Akanthos Opportunity Master Fund owned more than $137 million in junior preferred stock as of Aug. 16, 2016. Akanthos complained of suffering from “severe economic loss” to its holdings.
Fannie Announces Community Impact NPL Winners. Fannie Mae announced this week that the winning bidder for its 11th and 12th Community Impact pools of non-performing loans was VRMTG ACQ, LLC (VWH Capital Management, LP), a minority- and woman-owned business. The transaction is expected to close on May 22, 2018, and includes approximately 182 loans totaling $34.25 million in unpaid principal balance, divided between two pools focused in the Orlando and Tampa areas of Florida. GSE Foreclosure Preventions Surpass 4M. The Federal Housing Finance Agency reported this week that the GSEs completed 67,569 foreclosure prevention actions in the fourth quarter of 2017, bringing the total number of homeowners helped to 4.04 million since 2008. But, thanks to the fall...
Legislation that would protect veterans from predatory lending that was passed by the Senate recently could have lasting impacts on the VA home-loan guaranty program, according to legal experts. S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, passed on March 14 by a vote of 67-31. Sixteen Democrats and one Independent joined all 50 Republicans in passing the bill. Primarily, the bill would loosen stringent rules in the 2010 Dodd-Frank Act designed to prevent the bad business practices that led to the 2008 financial crisis. A stand-alone bipartisan bill introduced by Sens. Thom Tillis, R-NC, and Elizabeth Warren, D-MA, in January was added to S. 2155 shortly before the Senate vote. The Tillis-Warren bill, Protecting Veterans from Predatory Lending Act of 2018, addresses the issue of serial refinancing, or loan churning, in which the victims are veterans. Churning refers to the ...
The Department of Veterans Affairs recently clarified policy regarding lender use of credits or interest rates to pay veterans’ costs in VA home loans. Under VA regulations, lenders may charge and a veteran may pay a flat fee not exceeding 1 percent of the loan amount. The VA allows the charge provided it is in lieu of all other charges related to the costs of origination not expressly specified and allowed in the regulations. However, the agency has learned that some lenders are charging veterans interest-rate premiums in exchange for temporarily subsidizing the borrower’s monthly payments. “More precisely, an interest-rate premium is imposed as a charge for a cash advance on a loan principal,” the VA explained. While the agency allows lenders to charge borrowers for allowable costs, which may be made through an interest-rate adjustment, it clearly prohibits charges for impermissible costs, like ...
A Washington, DC, appellate court recently overturned a Federal Communications Commission ruling that restricted the use of “autodialers,” including cell phones, to communicate with consumers.
An appeals court ruling this month against Bank of America regarding compliance with a state law on escrow accounts has broad implications for banks that rely on federal preemption of state laws, according to industry attorneys.
A New York bankruptcy judge has ordered the bankruptcy estate of Lehman Brothers Holdings to pay $2.38 billion to cover legacy residential MBS claims filed by trustees in 2008.
The Department of Housing and Urban Development and the Federal Deposit Insurance Corp. have announced offerings of multiple residential reverse mortgage pools for sale to investors. The HUD pools are comprised of approximately 650 reverse mortgage notes with a total loan balance of about $136 million. The sale consists of due and payable first-lien reverse mortgages secured by single-family, vacant residential properties where all borrowers are deceased and none is survived by a non-borrowing spouse. The reverse-mortgage sale is the third offering of its type. As with past offerings, the sale will be by competitive bidding on April 11, 2018. The loans will be sold without FHA insurance and with servicing released. The loans are expected to be offered in regional pools. Meanwhile, the FDIC will unload in open auction 3,280 FHA-insured reverse-mortgage loans from the ...
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