The Department of Justice is investigating PNC Financial Services Group and Bank of America in connection with their FHA-related mortgage lending practices, the two financial institutions disclosed in filings with the Securities and Exchange Commission. PNC said it has received subpoenas from the U.S. Attorney’s Office for the Southern District of New York seeking information relating to National City Bank’s lending practices in connection with FHA-insured loans as well as the origination of non-FHA loans and their sale and securitization. Another subpoena was issued...

The Obama administration is asking Congress for authority to charge FHA lenders an “administrative fee” to help pay for improvements to the FHA quality assurance program. FHA wants to build a new quality assurance framework that will provide lenders more clarity about the agency’s expectations regarding the loan production process, said FHA Commissioner Carol Galante during a media briefing on provisions in the administration’s fiscal 2015 budget proposal that affect the Department of Housing and Urban Development. The idea is...

Slowing refinance activity and higher mortgage insurance premiums took a toll on FHA loan production in the fourth quarter of 2013, according to Inside FHA Lending's analysis of FHA data. Overall FHA endorsements fell 24.3 percent from the third quarter as the year ended with $210.0 billion. This was down 9.6 percent from total FHA loans originated in 2012. The year-s top five FHA lenders -- Wells Fargo, Quicken Loans, JPMorgan Chase, Freedom Mortgage and Bank of America -- combined for21.9 percent, or $46.0 billion, of total originations, down ... [includes one chart]

The Civil Division of the U.S. Attorney's Office for the Eastern District of New York is investigating Bank of America's compliance with the requirements of the FHA's Lender Direct Endorsement program. BofA disclosed the investigation in its recent filing with the Securities and Exchange Commission but withheld details. Department of Justice investigations of FHA-related fraud are based typically upon an alleged violation of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and/or the False Claims Act (FCA). Civil monetary penalties under FIRREA could go as high as $1.1 million per violation while treble damages are potentially available for FCA claims. Both laws have a 10-year statute of limitation. As a direct endorsement lender, BofA is authorized to originate, underwrite and certify loans for mortgage insurance without further reviews by the FHA or the Department of Housing and Urban Development. If the loan defaults, the holder of the loan may ...

Ginnie Mae has expressed concern about a new FHA policy accepting electronic signatures on most mortgage documents and will seek input and feedback from issuers. In a memo to participants this week, the agency said electronic documents "present unique challenges to implementation." In a Jan. 30 mortgagee letter, the FHA announced that it would begin accepting electronic signatures on most loan docs, including loan disclosures and loan servicing/loss mitigation documents. The FHA said it will accept electronic signatures only on "authorized" docs but delayed their use on notes until Dec. 31, 2014. This delay reflects considerations that are necessary in connection with electronic notes (eNote) and electronic mortgages (eMortgages), said Ginnie Mae. An electronic signature is a signature that is applied or affixed to a document by electronic means. Scanned images of paper docs that bear a physical or "wet" signature are not ...

Community-based mortgage lenders have asked the Obama administration to include a provision in the FY 2015 budget lowering FHA annual premiums to allow the agency to fully meet its mission of providing affordable mortgage credit while shoring up the FHA Mutual Mortgage Insurance Fund. In a recent letter to the Office of Management and the Budget, the Community Home Lenders Association called for a reduction in the annual FHA premium on purchase loans from the current 1.35 percent to 0.75 percent. The CHLA further recommended a 0.5 percent reduction of the annual premium for all borrowers when the FHA reaches its 2.0 percent net worth standard. At the same time, the CHLA also recommended lowering down to 0.5 percent the premium paid by homeowners who have completed HUD-sanctioned pre-purchase homeownership counseling. The group also called for an increase in the upfront FHA premium to as high as ...

Mortgage-delinquency rates continued to improve as 2013 came to a close, ending the year at the lowest level in over five years. The overall delinquency rate was 7.73 percent as of the end of December, according to the Inside Mortgage Finance Large Servicer Delinquency Index, the lowest reading since the third quarter of 2008, when it was 7.42 percent and rocketing higher....

Private mortgage insurers provided primary coverage on $41.59 billion of mortgages originated during the fourth quarter of 2013, according to a new Inside Mortgage Finance ranking and analysis. While that was down 29.6 percent from the third quarter, it also represented the deepest private MI penetration of new originations in five years. Private MI coverage – including existing insurance transferred to new loans originated under the Home Affordable Refinance Program – accounted for 13.6 percent of new mortgages produced in the fourth quarter. That was the highest private MI share of new originations since the first quarter of 2008, when it was 14.7 percent. HARP continued...[Includes three data charts]

The mortgages that most frequently experience delays in closing are those with private mortgage insurance and FHA loans, according to new findings from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. According to responses from real estate agents involved in 1,401 transactions in January, some 45 percent of purchase mortgages with private MI experienced a delayed closing. And 42 percent of FHA purchase mortgages experienced a delay in closing. Tom Popik, research director of Campbell Surveys, said...

So much has been said in recent days about a possible yet cautious return to subprime mortgage lending as lenders lowered their credit-score requirements for FHA mortgages and other agency loans with certain limitations. Industry participants, however, say today’s “subprime” is a misnomer and certainly not the same toxic subprime mortgage product that pushed the U.S. financial system to the brink of collapse. Lenders are more cautious in the post-subprime era and they no longer practice risk layering on loans to borrowers with less-than-stellar credit histories as they did in the past, industry observers say. “In the past, lenders combined risk layering with low credit scores,” said Brian Chappelle, a mortgage industry consultant. “Today, I would be shocked if any lender used Fannie Mae, Freddie Mac or the FHA as a vehicle for traditional subprime because they would be ignoring the possibility of repurchase or indemnification.” Lenders today are...