Wells Fargo was fined $85 million by the Federal Reserve late last month over allegations that Wells did not adequately detect and prevent instances of fraudulent loan applications and the steering of prime borrowers into higher-cost nonprime loans.The Federal Trade Commission said it is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by Countrywide Home Loans, Inc. ...

The number of lending institutions whose performance under the Community Reinvestment Act “needs to improve” has skyrocketed over the last two years, according to an analysis by Inside Regulatory Strategies of CRA ratings provided by the federal banking regulatory agencies from 2003 through mid-year 2011. In 2003, 0.64 percent of institutions received such a grade. And by 2009, a year after the market’s collapse, that percentage increased to 1.67 percent. ...

Analysts and legislative history suggest that Congress could still act to keep the “temporary” high-cost conforming loan limit at elevated levels. Advocates of the non-agency market have long-anticipated the drop in the loan limit, currently set to occur in October without further action from Congress. An extension of the $729,750 loan limit this year seems unlikely with the Obama administration supporting a decline to at least $625,500. Many Republicans also support a decrease in the role ...

Most state-licensed mortgage companies in the Nationwide Mortgage Licensing System and Registry are mortgage brokers, of which a significant portion does FHA loan correspondent business, according to a recent report issued by the Conference of State Bank Supervisors. As of the end of the first quarter, 14,980 companies possessed 28,415 licenses – an average of two state licenses per company, according to the report, “A Nationwide View on State-Licensed Mortgage Entities, Quarter I, 2011.” The licensee/registrant reports ...

As FHA tightens its underwriting further to give more room for private capital in the mortgage market, the federal single-family mortgage insurance program may no longer provide mortgage alternatives for as many “non-qualified residential mortgage” borrowers as it would have in the past, according to a new report issued by the Government Accountability Office. Analyzing the impact of the Dodd-Frank Act on homeowners and the mortgage market, the GAO report concludes that potential changes in the FHA’s role could influence ...

A California mortgage lender that recently reached a settlement agreement with the Department of Housing and Urban Development over branch issues could land before HUD’s Mortgagee Review Board for branch-related loan quality issues. HUD’s Office of the Inspector General said an audit of Prospect Mortgage’s branches uncovered high default rates due to numerous violations of HUD underwriting and quality control requirements. The OIG recommended requiring Prospect to reimburse HUD $344,326 for ...

Some federally supervised depository institutions with FHA businesses are in danger of missing the July 29 deadline for registering with the Nationwide Mortgage Licensing System and Registry and could be sanctioned. The delay in registration is apparently due to confusion and uncertainty as to whether certain employees meet the definition of a “mortgage loan originator” (MLO) and should be registered as required by the Secure and Fair Enforcement for Mortgage Licensing Act, said compliance experts. The mortgage-related activities of such employees do not clearly meet the MLO definition and they include ...

The Federal Reserve fined Wells Fargo $85 million last week over high-pressure compensation policies in the firm’s finance company that allegedly led to steering of prime borrowers to more lucrative non-prime mortgages. The $85 million fine is the largest ever levied by the Federal Reserve in a consumer enforcement case. Wells has since shut down Wells Fargo Financial, its subprime subsidiary that was the focus of the Fed’s charges. CEO John Stump said in a statement the “alleged actions” were “committed by a relatively small group of team members.” The Fed said Wells Fargo Financial’s incentive compensation and sales quota programs fostered ... [includes one data chart]

The Consumer Financial Protection Bureau may have taken the field before its franchise quarterback has suited up, but that’s unlikely to slow agency examiners in making their appointed supervisory rounds. They’ve already introduced themselves to their largest bank charges and are fine-tuning their internal examination guidelines so that when they get the final authority to supervise non-banks, they will come calling without delay, according to industry presenters at the latest webinar sponsored by In-side Mortgage Finance. When the CFPB officially ...

Consumers could be setting themselves up for problems in the credit market if they are getting credit information about themselves that differs from what lenders are looking at, according to a new report released by the Consumer Financial Protection Bureau. In a report to Congress, the agency said it plans to study the variations between credit scores sold to lenders and those sold to consumers to shed light on potential harm to the consumer. “The most substantial harm would likely result if, after purchasing a score, a consumer has a different impression of his or her ...