The mortgage industry is skeptical about President Obama’s proposal for low-cost, non-agency loan refinancing program, administered by the FHA for current, underwater borrowers. Some industry participants called the plan nothing but smoke and mirrors that would likely create unrealistic expectations. But deceptive or not, the proposal first announced by the president in his State of the Union address promises to be different from the earlier, huge unsuccessful FHA experiments in foreclosure prevention – Hope for Homeowners and FHA Short Refinance programs. The proposed refi plan is a combination of ...

With the recent issuance of streamlined regulations on lender indemnification, mortgagees participating in the FHA Lender Insurance program may increasingly find themselves the targets of HUD enforcement actions. Industry compliance experts anticipate an increase in agency audits and monitoring reviews because of the Department of Housing and Urban Development’s tightening of its indemnification rules. This could raise lenders’ compliance costs as well as legal costs if they find themselves the subject of an enforcement action, experts warned. “At an unprecedented time of change in the mortgage industry ...

The Department of Housing and Urban Development has announced a new regulation prohibiting lenders from using sexual orientation or gender identity as a basis for determining borrower eligibility for FHA-insured mortgage financing. The regulation specifically extends federal anti-discrimination protections to lesbians, gays, bisexuals, transgender persons and their families when applying for HUD-assisted or HUD-financed rental housing or an FHA-insured mortgage loan. The regulations will become effective 30 days after their publication in the Federal Register. HUD Secretary Shaun Donovan said the policy will ...

The National Association of Realtors recently asked the Department of Housing and Urban Development to allow investors to participate in the FHA’s property rehabilitation program. The FHA’s 203(k) Rehabilitation Mortgage Insurance Program allows homebuyers to take out a mortgage to purchase a house, including the cost of its rehabilitation. The program also allows the current owners to finance the rehabilitation of their own homes. Currently, investors and cooperative units are barred from using the 203(k) programs. Individual condominium units may be insured if ...

December was a productive month for FHA as the percentage of endorsements, fueled by strong refinance activity, rose 6.3 percent from the previous month, according to Inside FHA Lending’s analysis of agency data. However, 2011 overall was not as generous. Refinance transactions totaled 30,515 for the month, up 15.1 percent from November, with borrowers’ FICO scores averaging in the 703-706 range. Streamline refis were up 20.2 percent and conventional-to-FHA refis also increased 11.5 percent over the same period. Total cash-out refis, likewise, bumped up 7.7 percent on a monthly basis. In the advent of President Obama’s latest refinancing proposal ...

Veterans took advantage of their home loan benefit in record numbers, as loans originated under the Department of Veterans Affairs’ home loan guaranty program reached their highest total in eight years, according to the agency. The VA reported 357,594 mortgage loans with an agency guarantee in 2011, an increase of nearly 14.0 percent over last year. There are currently more than 1.5 million active VA home loans, the agency said. VA-backed home loans also showed the lowest serious delinquency and foreclosure rates in the mortgage industry, the agency noted. It cited the Mortgage Bankers Association’s National Delinquency Survey for 3Q11 showing ... [including one chart]

Consumer Financial Protection Bureau Director Richard Cordray this week confirmed to members of Congress that the agency’s top mortgage regulatory priority is its forthcoming rule on qualified mortgages – something it expects to finalize this summer. Separately, the agency last week quietly complied with a disclosure practice that all other federal entities involved in rulemaking follow: the release of a regulatory agenda. The CFPB filing, after officials bickered with House Republicans last week over the issue, does not include several key projects, such as devising rules on unfair and deceptive practices...

Originations of 1-4 family residential mortgages rose by a substantial 19.4 percent at the end of last year, but 2011 still ranked as the worst year for new production activity since year 2000. Mortgage lenders produced an estimated $1.35 trillion of home loans last year, down 17.2 percent from the total in 2010, according to Inside Mortgage Finance. Production hit a low spot during the second quarter, when just $280.0 billion in new mortgages were originated – the weakest quarter since financial markets seized up at the end of 2008. New record lows in mortgage interest...(Includes two data charts)

The newly empowered Consumer Financial Protection Bureau is wasting no time jumping into its oversight of mortgage origination practices and procedures at banks and nonbanks alike, issuing a set of M.O. examination procedures that will be used to put mortgage lenders and brokers under a compliance magnifying lens. But one industry attorney warns that in doing so, the CFPB has tilted the playing field against nonbank mortgage originators. CFPB Director Richard Cordray said the CFPB’s supervision of nonbank mortgage originators will “illuminate the entire marketplace by making nonbanks play by ...

The Supreme Court of the United States plans to hear oral arguments late next month in Freeman v. Quicken Loans, a case that could have wide-ranging implications for lenders subject to the Real Estate Settlement Procedures Act. The issue before the high court is whether RESPA Section 8(b) 12 USC 2607(b) prohibits a real estate settlement services provider from charging an unearned fee only if the fee is split between two or more parties.The language of that provision of the statute states that no person “shall give and no person shall accept any portion, split or ...