New York financial regulators have barred VA lender New Day Financial from doing any more business in the state for allegedly cheating on state-required continuing-education courses and examinations. The New York Department of Financial Services slapped the Fulton, MD-based lender (also doing business as New Day USA) with a $1 million fine and ordered it to surrender its mortgage banker’s license. The department accused top New Day executives as well as current and former employees of perpetrating an elaborate cheating scheme whereby compliance staffers took the required education courses and exams on behalf of senior managers and loan officers. According to state regulators, the cheating happened on numerous occasions and involved at least 20 New Day loan originators. The MLOs shared screen-shots of questions included in the National Multistate Licensing System and Registry (NMLSR) exams and ...

The Department of Veterans Affairs has issued new guidance for submitting title documents to the VA when conveying a property in Florida. The servicing guidance addresses potential lien problems in relation to past due and unpaid homeowners association obligations. As part of conveying a property in the Sunshine State, documentation must be complete and in order so that VA can validate a clean title that will be acceptable to lenders, buyers, title companies and attorneys in the community where the property is located. Thus, property conveyance usually involves providing an owner’s title-insurance policy with no exclusions, other than for taxes that have not yet been billed but may be accrued against the property. Under Florida law, if an HOA is properly named in the foreclosure, a borrower or its assignees or successor-in-interest is only required to pay the lesser of either the ...

Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

The VA loan is a great option for veterans and servicemembers looking to purchase a new home. However, did you know it could also be paired with other home-financing programs to give the borrower a bigger bang for the buck? For instance, many real estate brokers and mortgage lenders are unaware that the VA loan can be used with certain products offered through state housing finance agencies to provide greater benefits to veterans and members of the military. The Colorado Housing and Finance Authority (CHFA) offers a tax credit program that allows VA borrowers to claim a percentage of the annual mortgage interest paid each year as a federal tax credit on their federal income tax returns. “It is not a tax deduction,” said Chad Patterson, a real estate agent with RE/MAX Traditions in Longmont, CO. “This can be a huge asset to the ...

Community banks continue to raise concerns about how regulations are hampering mortgage originations, according to the results of a survey by state regulators. While some community banks have ceased originations, lending data and forward-looking projections suggest that community banks have adapted to the post-crisis regulatory environment. The Federal Reserve and Conference of State Bank Supervisors released a report late last week detailing a survey of 868 banks with $10 billion or less in total assets. Single-family mortgages were named as a primary line of businesses by 69 percent of the surveyed banks in 2015, down from a 75 percent share last year. “Considerable variation in mortgage market conditions was reported...

The recent dismissal of class-action shareholder lawsuits against Ocwen Financial suggests that it takes more than a sharp decline in a company’s stock for investors to prevail in court. In early September, a federal judge dismissed class-action lawsuits that were filed against Ocwen Financial, Altisource Portfolio Solutions and certain officials at the firms. United Union of Roofers v. Ocwen and West Palm Beach Firefighters Pension Fund v. Altisource were filed on behalf of investors that purchased stock in the companies between early 2013 and December 2014. In that span, the companies’ stock prices declined...

Ginnie Mae this week revised its requirements for participating MBS issuers seeking approval of changes in their business status as a result of mergers, change of ownership or control, transfer of assets or a negative turn in their dealings with regulatory agencies. The agency decided to update the guidance because of the increasing number of requests from issuers, according to Ginnie Mae President Ted Tozer. The requests are getting more complex as well, he said. The agency’s Mortgage-Backed Securities Guide has been updated...

Securitization industry participants raised concerns after an appeals court last week refused to hear an appeal of an earlier ruling that reversed the long-held federal preemption that nonbanks have relied on to keep securitized loans exempt from state usury laws. The U.S. Court of Appeals for the Second Circuit denied the appeal of Madden v. Midland Funding last week. No explanation was provided with the denial. The appeal was supported by the Structured Finance Industry Group and the Securities Industry and Financial Markets Association, among others. SFIG said...

The FHA will not issue a new case number for any FHA-to-FHA refinance if the current mortgage has a repair or rehabilitation escrow account in FHA Connection. The change, which is one of several updates to FHA Single Family Policy Handbook 4000.1, applies only to FHA streamline refis. It aims to ensure that escrow funds of the mortgage being refinanced are properly applied as well as conform to system requirements. The updated sections become effective on Sept. 14, 2015. Another change clarifies that the payoff statement for the mortgage being refinanced is the only document required when calculating the maximum mortgage amount for simple refi transactions. In addition, guidance for loan-to-value limits for cash-out refis has been updated to clarify that the 85 percent LTV restriction applies only to cash-out refis. HUD also noted that appraisers have flexibility in regards to when inspections should ...

FHA Begins Registration of Lenders to Prepare their Transition to the EAD Portal. Lender registration for the transition phase of the new Electronic Appraisal Delivery portal began on Aug. 18. Lenders may select any of the seven onboarding phases, which FHA has established to ensure that lenders have more time to work within the EAD portal to ensure that their systems, data flow and operational process meet portal requirements before the June 27, 2016, mandatory-use date. Although lenders may enter at any phase they choose, the FHA strongly encourages lenders to register for the earliest onboarding phase, and to do it as soon as possible. That would give them more time to get ready for the full transition, the agency said. The first phase begins on Oct. 15, 2015, with additional phases beginning each month and running through the first half of 2016. Information on the onboarding phases as well as ...