The five banks that are parties to the $25 billion national mortgage settlement have extended more than $26.11 billion in gross relief to more than 300,000 borrowers, or roughly $84,385 per homeowner, according to a new report from the Office of Mortgage Settlement Oversight. At that pace, the five participating servicers will satisfy their obligations under the settlement two years ahead of the 2015 deadline. “The report discloses that the banks have completed $21.92 billion in consumer relief to borrowers...

Adverse impact violations are the hardest to defend against and the ones causing the biggest settlements, according to Tammy Butler, the director of fair lending and compliance for Optimal Blue, a leading pricing engine. “In a nutshell, this means that your institution has a policy or criterion that has a disproportionate impact on the protected class population of the areas you serve,” she said in a recent blog. This can occur in the way that a lender prices loans or underwriting overlays. “So far, every lender that has been...

Portfolio lending by community banks could be treated differently than other types of lending under pending Basel III capital requirements, according to recent indications from federal regulators. The potential exceptions for community banks follow strong lobbying from lenders as well as bipartisan support in Congress. “While we strongly believe that finalizing the regulations is critically important for certainty and planning, we also believe there are merits to considering alternative, simpler approaches to ...

Wholesale mortgage production channels – and correspondent originations programs in particular – were key factors in the surge in loan originations during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. Wholesale lending increased by 11.4 percent from the second quarter to the third, outgaining a 7.7 percent increase in retail production. And with most of the gain coming in correspondent production, it’s clear that the influx of new lenders in that segment, combined with Wells Fargo’s growing presence, has more than made up for the withdrawal of a handful of major lenders of the past. Correspondent originations rose...[Includes four data charts]

Lenders face increased regulation under policy changes designed to bring the FHA Mutual Mortgage Insurance Fund back to positive within the fiscal year and reduce the likelihood of a Treasury bailout to shore up the FHA’s claims-paying ability. The Department of Housing and Urban Development late last week announced a hike in FHA premiums and other changes designed to restore the FHA’s insurance fund, which had a negative 1.44 percent capital ratio at the end of September 2012, according to a new actuarial review. Department of Housing and Urban Development Secretary Shaun Donovan blamed...

The Federal Housing Finance Agency should go back and make additional tweaks to the revised representation and warranty framework for Fannie Mae and Freddie Mac to address significant industry concerns while also enabling greater industry input for future government-sponsored enterprise guidelines prior to issuance, according to the Mortgage Bankers Association. In a letter dispatched to the agency earlier this month, the MBA lauded the FHFA for its efforts through the framework to create clarity but said further changes need to be made to avoid adding to lenders’ confusion rather than alleviating it. “MBA is concerned...

Many top mortgage servicers reported increases in mortgage delinquency rates during the third quarter of 2012, although data from the Mortgage Bankers Association suggest that seasonally adjusted rates improved in most categories. The Inside Mortgage Finance Large Servicer Delinquency Index rose 7 basis points, to 10.17 percent, during the third quarter. The index was still significantly below the 10.70 percent level recorded at the same point in 2011, but it was up 29 bps from March 2012, when it dipped to 9.88 percent. The increase was driven...[Includes one data chart]

Servicers are on their way to completing required loss mitigation as part of the national servicing settlement well before the 2015 deadline, according to a report this week from Joseph Smith, monitor of the settlement. State attorneys general and federal regulators that helped reach the settlement said they are largely satisfied with servicers’ initial efforts. “With servicers on track to fulfill much of their consumer relief commitments in the first year of this agreement, homeowners are finally beginning to see the light at the end of the tunnel,” said Shaun Donovan, secretary of the Department of Housing and Urban Development. The settlement requires...

The Making Home Affordable program might not tap even half of the $29.9 billion in Troubled Asset Relief Program funds allocated for it, according to new estimates from the Treasury Department. Recently loosened requirements for the Home Affordable Modification Program Tier 2 could increase activity, though initial signals suggest that the increase will not be significant. Some 1.30 million MHA actions had been implemented as of the end of the third quarter of 2012, up from 1.22 million at the end of the second quarter, according to an Inside Mortgage Finance analysis. First-lien mods as part of HAMP Tier 1 dominated MHA activity, which also included second-lien mods, short sales and unemployment forbearance plans and other programs. There were...

The Department of Housing and Urban Development will raise the annual insurance premium on new FHA originations, reverse the agency’s current policy on mortgage insurance premium cancellation and institute other policy changes to improve the health of the FHA insurance fund. The new measures aim to offset significant losses from FHA’s legacy loans, which have caused significant stress to the agency’s Mutual Mortgage Insurance Fund. Results of a new FHA actuarial audit showed that the stress has plunged the MMI Fund into a deep hole, revealing negative capital of $16.3 billion (negative $13.5 billion excluding Home Equity Conversion Mortgages) on a $1.13 trillion FHA portfolio. The capital reserve ratio fell ...