Foreclosures

Browse articles from all of our Newsletters related to Foreclosures.

July 21, 2017 - Inside FHA/VA Lending

MRB Suspends Lender’s Authority To Originate, Service FHA Loans

The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...


July 21, 2017 - Inside FHA/VA Lending

HUD Note Sales Program Operating With No Formal Procedures, Says IG

An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...


July 14, 2017 - Inside The GSEs

FHFA Proposes New Federal Home Loan Bank Capital Requirements

The Federal Housing Finance Agency, although late to the game, is proposing new capital requirements for the Federal Home Loan Banks to comply with the Dodd-Frank Act. Other regulators have already implemented the Dodd-Frank Act provisions that shift capital requirements away from ratings. This proposed rule would carry over most of the existing regulation without any major change, but it would revise the credit risk component of the risk-based capital requirement, along with limitations on extensions of unsecured credit. Currently banks calculate credit risk capital charges and unsecured credit limits based on ratings issued by a nationally recognized statistical rating organization. But the proposed rule would require the banks to use their own internal rating methodology.


July 7, 2017 - Inside FHA/VA Lending

DOJ, HUD Expand FCA Scrutiny to FHA Servicing, Reverse Mortgages

Mortgage compliance experts are cautioning FHA servicers to tread carefully around loss mitigation, annual certifications and reverse mortgages, which could be a potential minefield for False Claims Act lawsuits. While FHA lenders’ exposure to FCA risk remains, the Department of Justice and the Department of Housing and Urban Development have increased their scrutiny of FHA servicing practices for potential violations, according to Phil Schulman and Kristie Kully, both partners in Mayer Brown’s Washington office. In a recent podcast, Schulman warned of increasing DOJ and HUD scrutiny of FHA servicing practices in the last 18 months, a worrisome shift from the origination side, which has seen an estimated $5 billion in settlements and penalties since 2011 for violations of the FCA and the Financial Institutions Reform, Recovery and Enforcement Act. Since 2008, mortgagees participating in ...


June 29, 2017 - Inside Mortgage Finance

Compliance Experts Warn of FCA Pitfalls for Servicers as DOJ Expands Statute’s Applicability

As much as the False Claims Act has been a formidable government enforcement tool against FHA loan originators, the statute is also being used increasingly against mortgage servicers, according to compliance experts. Within the last 18 months, the DOJ has expanded FCA use to reverse mortgages and loan servicing, according to Phil Schulman and Kristie Kully, both partners in Mayer Brown’s Washington office and members of the firm’s Consumer Financial Services group, during a recent podcast. While the Department of Justice has consistently used the FCA and its treble-damage provision to enforce FHA loan origination rules, the economic downturn and foreclosure crisis has put...


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