Complaints

Browse articles from all of our Newsletters related to Complaints.

November 22, 2017 - Inside FHA/VA Lending

Ginnie Spots Inconsistent Reports Regarding First Payment Date

Ginnie Mae called on issuers to ensure that the data they submit are accurate following the discovery of erroneous payment reports. The agency said it has noticed discrepancies in the reporting of the first payment date on loan modifications in violation of Ginnie guidelines. Specifically, the first payment date some issuers reported as part of the loan-delivery data did not match the date submitted for the same mortgage loan as part of issuers’ monthly report of pool and loan data. Ginnie blamed the errors either on loans set up incorrectly for servicing or faulty data issuers had reported to the Department of Housing and Urban Development. Guidance issued by Ginnie on Nov. 14 reminded issuers to report the first scheduled payment date of the re-amortized loan when reporting the first payment date for modified mortgages through either the GinnieNET or the Reporting and Feedback System. The date ...


November 22, 2017 - Inside FHA/VA Lending

Ex-FHA Chief Suggests Raising FHA Capital Ratio, Other Reforms

A former FHA commissioner has recommended raising the agency’s capital reserve ratio to 3 percent, to make FHA stronger and more resilient. Carol Galante, who served two years as FHA commissioner and assistant secretary for housing in the second term of the Obama administration, laid out her proposal along with other recommendations in a paper that she co-authored. Housing-finance reform without a retooled FHA could threaten families’ access to homeownership and increase risk to taxpayers, contrary to the goals of reform, said Galante, currently the faculty director of the Terner Center for Housing Innovation at University of California Berkeley. In her paper, Mission Critical: Retooling FHA to Meet America’s Housing Needs, Galante spelled out the changes necessary to help FHA perform its complementary and countercyclical role in the nation’s housing markets. Galante called for ...


November 22, 2017 - Inside FHA/VA Lending

Alert Out on Unwanted Refi Offers; CFPB, VA Warn of Misleading Ads

The Department of Veterans Affairs and the Consumer Financial Protection Bureau have issued a joint warning to servicemembers and veterans about VA refinancing offers that sound too good to be true. There is a good chance that borrowers with a VA loan have already received unsolicited offers to refinance their mortgages even just months after closing, the agencies said in their first “warning order” (WARNO). Many of these refi solicitations promise extremely low rates, thousands of dollars in cash back, skipped mortgage payments, no out-of-pocket costs and no waiting period, the agencies noted. The VA and the CFPB said lenders offering VA refinances may use aggressive and potentially misleading advertising and sales tactics. “Lenders may advertise a rate just to get you to respond or you may receive a VA mortgage refi offer that provides limited benefit to you while adding thousands of dollars to your loan balance,” the agencies warned. Even though the VA prohibits a lender from advertising skip payments on ...


November 10, 2017 - Inside FHA/VA Lending

MBA Calls for Changes to LRS, Remedies for Lender Complaints

FHA lenders think the new Loan Review System is a “modern and streamlined system” that is less user-friendly than Neighborhood Watch, according to the Mortgage Bankers Association. In a letter to the Department of Housing and Urban Development, the MBA called on the FHA to continue its ongoing discussion with lenders and other industry stakeholders on how the improve the LRS and its response timelines. Implemented last May, the LRS is an electronic platform for monitoring and reviewing the quality of single-family mortgages that FHA has insured. It replaced the post-endorsement technical review performed by the FHA Connection/Underwriting Review System (URS), review functions for post-closing test cases submitted by direct endorsement lenders, and lender self-reporting functions in Neighborhood Watch. The LRS also includes a defect taxonomy, which features a list of ...


October 27, 2017 - Inside FHA/VA Lending

FHA, VA Post Lower Denial Rates, Minorities More Likely Users of FHA

Overall denial rates for nonconventional loan applications (FHA, VA and Rural Housing Service) fell slightly in 2016 to 13.4 percent from 13.9 percent in 2015, Home Mortgage Disclosure Act data showed. In the nonconventional refinancing segment, denial rates rose to 32.9 percent last year from 30.3 percent in the previous year. Approximately 23.9 percent of FHA loan applicants were denied last year while VA turned down 20.0 percent of borrowers who sought a VA loan. An estimated 14.3 percent of FHA purchase-loan applicants were turned down. VA denied 11.4 percent of its purchase-mortgage applicants although its total purchase-loan applications are far fewer compared to FHA. According to the Federal Reserve’s overview of the 2016 HMDA data, as in past years, blacks, Hispanics and “other minority” borrowers had notably higher denial rates overall compared to white borrowers. Denial rates for ...


October 27, 2017 - Inside FHA/VA Lending

Ginnie/VA Anti-Churning Task Force Mulls Longer Seasoning

A Ginnie Mae/VA anti-churning task force is looking at a number of options to solve the rapid prepayment problem, which could include extending the seasoning requirement for all refinanced loans and prohibiting access to custom pools. A Ginnie representative declined to provide further details, adding that the task force is not ready to announce changes yet. “But we will take additional action soon, which we can do through program changes like we did last year,” he said. Ginnie issued guidance last year to curb aggressive refinancing of VA loans that underlie Ginnie mortgage-backed securities. The rapid refis have resulted in rapid prepayments to the detriment of investors with no clear benefits to VA borrowers. The guidance required six consecutive monthly payments before delivering a streamlined refi loan into a standard Ginnie MBS. The measure succeeded in stopping the ...


October 23, 2017 - Inside the CFPB

Mortgage Complaints Fall Broadly As the Market Continues to Heal

Complaints consumers made to the CFPB about their mortgages fell in every single category tracked during the third quarter of 2017, according to a new analysis and ranking by Inside the CFPB, further evidence of the recovery underway in the market. In fact, the sole category that saw an increase on a year-over-year basis was the loan application/ origination grouping, which was still at elevated levels after a surge in the first quarter, possibly due to issues associated with the implementation of the integrated disclosure rule. Total criticisms fell by 21.2 percent from the second quarter to the third, and by 27.7 percent from the third quarter of 2016 to the third quarter of 2017. [With exclusive data] ...


October 13, 2017 - Inside FHA/VA Lending

HUD Dumps Lender Insight for New Loan Review Summary Report

The Department of Housing and Urban Development is discontinuing its quarterly newsletter, Lender Insight, with the implementation of FHA’s Loan Review System. The change is aimed at improving both FHA’s and lenders’ quality-control and risk-management operations. HUD will be publishing a quarterly Loan Review Summary Report to provide a snapshot of the results of FHA’s quality-control review of mortgage originations over the preceding 12 months. According to HUD, the report will include only underwritten loans that were subject to a post-endorsement technical review. It does not include the results of lenders’ self-reports or any other loans that were reviewed as part of a lender examination, the agency said. The report will show the initial rating of all loans, the updated rating six months from the end of the review period, and a final rating. The “final” rating is subject to change as long as ...


October 13, 2017 - Inside FHA/VA Lending

Ginnie Mae, VA Announce Joint Task Force to Stop Improper Refis

Ginnie Mae and the VA this week officially announced a joint-agency task force to deal with the loan-churning problem that is triggering faster prepayments in Ginnie mortgage-backed securities pools. Specifically, the task force will scrutinize aggressive and misleading refinancing offers and address loan churning and repeated refinancings. It will also examine critical issues, data and lender behaviors related to refinancing loans, as well as determine the kind of policy and program changes agencies should make to ensure VA refi loans do not pose an undue risk or burden to vets and taxpayers. Both the VA and Ginnie Mae programs work best when market participants use them to provide a benefit to VA borrowers and, ultimately, lower vet’s costs, officials said. The task force has begun examining data and information to ensure refi loans provide net tangible benefits to veteran-borrowers. In addition, the ...


October 13, 2017 - Inside FHA/VA Lending

Carson Open to Excising HECM From Mortgage Insurance Fund

Department of Housing and Urban Development Secretary Ben Carson indicated he is open to the idea of moving the Home Equity Conversion Mortgage program out of the FHA Mutual Mortgage Insurance Fund to stem future losses. Testifying before the House Financial Services Committee this week, Carson said the changes the department has made recently, as well as those currently under consideration, will eliminate most of the program’s problems although residual issues may still linger. Carson acknowledged that the HECM program’s default rate has been a drain on the MMI Fund even though it is much smaller than the FHA’s forward loan portfolio. The recently revised HECM rules issued on Sept. 19 have “stopped the bleeding” in terms of new reverse mortgages, he added. However, separating the HECM portfolio from the FHA insurance fund and making it a stand-alone program is ...


Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.
No. It’s still difficult compliance/regulatory-wise.
Maybe. It’s under consideration.
Not now. But things could change as 2018 progresses.

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