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Inside FHA/VA Lending

December 18, 2009

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Lender Rules Changes May Change FHA

The Department of Housing and Urban Development contends that major changes to FHA lender liability and accountability requirements will not have a significant economic impact, but industry experts say the moves will shift risk from the government to lenders and will alter how FHA mortgagees do business. HUD’s proposed changes to how correspondents participate in the program and higher net worth... Read More

Audit Finds Holes in FHA Assumptions, Technology

Independent auditors hired by the Department of Housing and Urban Development Inspector General say the FHA’s financial statements for 2009 and outlook for the future may be overly optimistic, and the program’s information technology still needs upgrades and poses additional risk. HUD officials strongly disagreed with claims that assumptions in FHA’s financial audit were off-base. FHA’s process for... Read More

FHA Gets Anti-Fraud, Tech Upgrade Funds

The FHA program and its anti-fraud initiatives got significant boosts from the appropriations package approved by Congress for the Department of Housing and Urban Development last week. FHA’s single-family mortgage insurance program got a boost as lawmakers authorized up to $400 billion in new loan commitments in fiscal 2010, up from $315 billion in FY2009. Ginnie Mae’s commitment ceiling was bumped... Read More

HUD Proposes SAFE Act Rules for All Originators

HUD proposed a final rule this week that would set the minimum standards that states must meet to comply with the Secure and Fair Enforcement Mortgage Licensing Act of 2008 in licensing loan originators. The rule builds on work the agency has already done in implementing SAFE Act provisions. The SAFE Act was enacted last summer to enhance consumer protection and reduce fraud by encouraging... Read More

Troubled States See Highest FHA Purchase Share

The state-by-state breakdown of FHA originations didn’t see much movement in the third quarter of 2009, but states that have the highest share of FHA lending used to purchase a home in 2009 were the hardest hit by the housing market collapse, according to a new analysis by Inside FHA Lending. California, the top state in terms of FHA originations through nine months of this year with $32.85 billion... Read More

FHA Lender Settles For Overcharging Borrowers

Yet another lender – this time Baltimore-based Equitable Trust Mortgage Corp. – was disciplined by the Department of Housing and Urban Development’s Mortgagee Review Board and reached a settlement with the agency late last week. HUD said the lender improperly overcharged 37 borrowers for broker and loan origination fees. Only a few days after HUD suspended the lender from making FHA-insured... loans, ETM agreed, without admitting fault or li Read More

FFIEC Proposes Reverse Mortgage Guidance

Federal banking regulators are urging lenders to be careful in originating reverse mortgages, 90 percent of which are FHA home equity conversion mortgages, because of the unique compliance and regulatory risks posed by the product. The six members of the Federal Financial Institutions Examination Council, the Office of the Comptroller of the Currency, the Board of Governors of the Federal... Read More

FHA Briefs

FHA appraisers must start using an appraisal form recently revised by the government sponsored-enterprises, the Appraisal Update or Completion Report, starting Jan. 1. The form, form 1004D at Fannie Mae and form 442 at Freddie Mac, is used for updates of existing appraisals when the appraiser agrees with the original appraisal as well as repair and completion inspections. Part A of the form can be... Read More

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