Deutsche Bank and its mortgage subsidiary MortgageIT this week agreed to pay $202 million to settle civil claims that they engaged in a decade of misconduct and deception to qualify risky mortgage loans for FHA insurance. The civil fraud lawsuit was brought against the two companies by the Department of Justice as a result of a referral from the Department of Housing and Urban Development. Filed in May last year, the government lawsuit sought damages and civil penalties under the False Claims Act. The suit alleges that MortgageIT, which Deutsche Bank acquired in 2007, used its authority as a direct endorsement lender (DEL) to ...

Genworth Mortgage Insurance has named Martin Klein as acting chief executive officer in the wake of former CEO Michael Frazier’s resignation last week. Klein is and remains the company’s chief financial officer. James Riepe was named nonexecutive chairman of the board. NMI Holdings, Inc., has raised $550 million in a private placement to provide mortgage insurance on loans to Fannie Mae and Freddie Mac. The company is in the process of obtaining approvals from state insurance regulators and the two government-sponsored enterprises. The MI unit will be called ...

Private mortgage insurers appear to be holding on to the gains in market share they began to accumulate in the middle of last year, according to a new Inside Mortgage Finance analysis. An estimated $108.61 billion of home mortgages originated in the first quarter of this year carried primary mortgage insurance, an increase of 9.4 percent from the previous quarter. That compared to a 3.8 percent drop in total single-family mortgage originations over that period. The apparent jump in primary MI market penetration to 28.2 percent is skewed somewhat by the process for...(Includes two data charts)

Private MI officials say FHA pricing changes have helped the industry regain some market share from the agency, but future gains may depend on how the federal government eventually changes its role in the mortgage market. After its most recent pricing adjustment in April of this year, the FHA does not expect to make further changes in its insurance premiums, said Charles Coulter, deputy assistant secretary at the FHA, during this week’s secondary market conference sponsored by the Mortgage Bankers Association. “We are an average pricer, and that alone creates opportunities” for private MIs, he said...

Genworth Financial this week announced some price and underwriting guideline adjustments aimed at reducing the cost of insurance for most mortgages and making the private mortgage insurer more competitive in the marketplace. Effective for applications received on or after May 14, Genworth is reducing monthly and single premium MI rates (borrower paid and lender paid), subject to state approvals. For monthly premium MI, rates are being lowered for all loans with loan-to-value ratios less than or equal to 95 percent. Rates for LTVs above 95 percent will remain the same, the company said, although new adjustments for...

NMI Holdings, Inc. has raised $550 million in initial capitalization to provide private mortgage insurance on loans sold to Fannie Mae and Freddie Mac. The money was raised through the sale of common stock in a private offering underwritten and placed by Arlington, VA-based investment bank FBR, which reportedly has a less than 5 percent stake in the new company. FBR declined to comment on the NMI transaction, citing restrictions on what it and NMI can disclose or say over the next couple of months. NMI is currently working on obtaining approvals from state insurance regulators across the country and approvals...

Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...

The Department of Housing and Urban Development said it would review and update as necessary its requirements for servicers of FHA-insured loans in conjunction with the establishment of new standards by the Consumer Financial Protection Bureau. HUD wants to ensure coordination between the FHA and CFPB standards and that each set of standards provides effective solutions for borrowers, said an FHA spokesman. On April 9, the CFPB previewed some of the mortgage servicing rules, which the agency plans to propose this summer and adopt in January 2013. It is unclear whether ...

A national consumer advocacy group, whose own investigation of FHA credit overlays in 2010 triggered a federal probe of 19 FHA lenders, said it plans further undercover testing to ensure the unfair practices cease. The National Community Reinvestment Coalition said it is still waiting to hear from the Department of Housing and Urban Development about the results of the multiple investigations the group helped launch over a year ago in response to complaints about credit overlays. A HUD spokesman said the investigation is continuing and “nearing completion.” He did not say, however, why it was taking ...

Implementing proposed legislation aimed at improving the safety and soundness of the FHA single-family program would cost taxpayers $11 million over a four-year period if the bill is enacted in late 2012 and the necessary amounts are appropriated each year, according to the Congressional Budget Office. In an analysis of H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, the CBO estimated that $9 million would be spent on mandatory actuarial studies on the health of the FHA Mutual Mortgage Insurance Fund and $2 million for other costs over the 2013-2017 period. The legislation would not affect direct spending or revenues and, therefore ...