Approximately 11.5 percent of FHA single-family mortgages were in some stages of delinquency in July, 26 basis points down from the previous month, according to an Inside FHA/VA Lending analysis of FHA delinquency rates. At the end of July, FHA servicers were servicing 7,901,090 FHA loans, with top servicer Wells Fargo accounting for 19.2 percent. The share of FHA mortgages that were 30-59 days past due, which is considered early-stage delinquency, was 4.8 percent at the end of July. The share of FHA loans 60-89 days delinquent was 1.6 percent while the share of seriously delinquent loans in July was 4.02 percent. ... [Chart]

An undetermined defect is causing the Department of Veterans Affairs’ loan servicing reporting system to spit out duplicate bill-of-collection transaction numbers. The VA Home Loan Guaranty staff is collaborating with the Administrative Loan and Accounting Center (ALAC) to work around the issue. The resolution to correct the defect in the VA Loan Electronic Reporting Interface (VALERI) application is scheduled to be included in the 18.4 VALERI release on Dec. 8, 2018. VALERI is in the first phase of a three-year project to convert from a system for reporting and storing servicing data to an end-to-end mortgage-processing platform. The VA also has issued a number of servicing alerts and reminders. Liquidation appraisal fees in Colorado will increase in certain counties effective Sept. 1, 2018, so that all counties will have the same fee per property type. The fee changes will be updated and reflected on the ...

A Treasury Department report called on the Department of Housing and Urban Development to establish clear standards for determining which mortgage-related violations and loan defects the Department of Justice should pursue under the False Claims Act. The report also recommended that DOJ ensure that materiality, for purposes of the FCA, is linked to the standards of the agency administering the program to which the claim has been filed. Furthermore, it urged both HUD and the DOJ to work together to clarify the process by which they can jointly resolve claims. The report was issued pursuant to President Trump’s February 2017 executive order establishing his administration’s policy to regulate the U.S. financial system according to a set of core principles. Both HUD and the DOJ have been successful in using the statute to prosecute FHA lenders who knowingly commit fraud or make ...

Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

The U.S. District Court for the Southern District of Iowa earlier this month granted preliminary approval of an $11.2 million settlement in a proposed class-action against national bank JPMorgan Chase. According to the complaint filed in 2016, Chase charged and collected interest on FHA-insured loans that paid off early. Chase was either the lender or the servicer of the loans. The lawsuit, Audino et al. v. JPMorgan Chase Bank, alleges that the bank breached the promissory notes underlying the class’s FHA-insured home loans when it collected post-payment interest without providing disclosures to borrowers who made a prepayment inquiry, request for payoff figures, or tender of prepayment. Plaintiffs allege that the bank did not use the proper FHA form to provide the disclosures to consumers. Chase denies any wrongdoing and neither admits nor concedes any actual or potential fault or liability. The bank also denies it was ...

Industry trade groups called on the CFPB to encourage consumers to contact financial services firms directly about their complaints, rather than going through the bureau. In response to the CFPB’s request for information on the process of handling consumer complaints and consumer inquiries, a number of industry groups said the bureau should direct consumers to first seek redress directly from financial institutions before filing complaints to the CFPB ...

Mortgage-related consumer complaints filed with the CFPB have shown double-digit declines in every major category at the midway point in the year, according to a new Inside the CFPB analysis. At the six-month mark, consumer complaints about loan applications have seen the most significant decline, down 35.0 percent for the first half from the comparable period in 2017. On a quarterly basis, this type of complaint dropped 10.8 percent from 1Q18 to [Includes an exclusive chart] ...

Consumer complaints regarding student loans and mortgages fell sharply in the first half of 2018 compared to the same period a year earlier, according to a new analysis by Inside the CFPB. At the six-month mark, student loan complaints were down a stunning 62.5 percent from a year ago. Criticisms about home mortgages also experienced a double-digit decline – 24.9 percent – for the first half. On the other hand, total gripes filed by the general public [includes exclusive data chart] ...

The credit risk profile of incoming FHA business has shifted significantly since the beginning of last year, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. The biggest development has been the growth of loans with high debt-to-income ratios. There has also been a significant increase in the share of refinance loans that are cash-out transactions. FHA officials are well aware of these developments, having publicly mentioned them in testimony on Capitol Hill and at industry conferences. Officials have also raised concerns about FHA loans with downpayment assistance, although the MBS data don’t seem to indicate that there has been much change on that score. Among FHA loans endorsed in April and May, only 41.9 percent were at or below the benchmark DTI test for qualified mortgages, which is 43 percent. Through 2015 and 2016, well over half of new ... [Chart]

The mortgage banking industry is backing a legislative proposal that would limit the government’s use of the False Claims Act to pursue hefty damages against FHA lenders. In a recent letter to the bill’s co-sponsors, the Mortgage Bankers Association expressed its strong support for H.R. 5993, the Fixing Housing Access Act of 2018. The MBA noted that originating FHA-insured loans has become very risky in recent years largely due to the civil actions brought by the Department of Justice under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Fifty-four FCA and FIRREA cases against financial institutions have settled for billions of dollars between July 2011 and January 2018, according to data compiled by the Buckley Sandler law firm. Four cases are pending and one civil penalty award was reversed on appeal. Those lenders who were on the ...