Debt collection, mortgages and credit reporting are the top three most-complained-about products and services in 2015, according to the Consumer Financial Protection Bureau’s fourth annual report on servicemembers’ and veterans’ complaints. Such complaints comprised a significant share of complaints from members of the military and their families logged by the CFPB last year. In 2015, the CFPB received 13 percent more military complaints compared to 2014, noted Barbara Mishkin, consumer finance attorney at Ballard Spahr. Of the 19,200 complaints received from members of the military last year, 46 percent (8,900) involved debt collection. The report indicates that military consumers submitted debt-collection complaints at almost twice the rate of the general consumer population, said Mishkin. Of the 8,900 debt-collection complaints, 44 percent involved attempts to collect a debt that the ...

Reduced mortgage insurance rates for FHA multifamily housing programs took effect on April 1, 2016 to help preserve and increase the amount of affordable housing for low- and moderate-income families. The reductions range from 25 to 35 basis points – a significant rate change for FHA’s multifamily portfolio. The revised multifamily mortgage insurance premium applies to any firm commitments issued or reissued on or after April 1. It is designed to encourage capital financing of affordable and energy-efficient dwellings. Announced on Jan. 28, the new MIP rates will not apply to FHA multifamily loans closed or endorsed before March 31, as well as to other multifamily mortgages endorsed in conjunction with an interest-rate reduction or a loan modification. For “broadly affordable” housing, FHA is lowering annual rates to 25 basis points, down 20 or 25 bps from current rates Broadly affordable housing means that ...

FHA Total Delinquencies, Serious Delinquencies Show Remarkable Improvement Since Peak. The FHA total delinquency rate in 2015 was 13 percent, down 37 percent from 2012 when the rate peaked at 16.7 percent, according to the latest data from FHA Neighborhood Watch. Serious delinquencies (loans that are 90 days or more past due) have improved 19 percent in 2015, with rates down to 6.74 percent from 9.92 percent in 2012. As of February 2016, the total delinquency rate and serious delinquency rate improved further to 11.1 percent and 5.5 percent, respectively. VA Issues POC Guidance, Seeks Comments on Proposed Data Collections. The Department of Veterans Affairs has issued new guidance revising the point-of-contact for inquiries regarding paid-in-full notifications of loans guaranteed for repurchase under VA’s Regulation 4600 Loans. The ...

Although interest rates have been trending downward for much of the year, it hasn’t stopped mortgage firms from selling one of their most prized assets: mortgage servicing rights. According to a new tally from Inside Mortgage Finance, almost $27 billion in MSR auctions have been announced since March 1, with some bulk deals sized as high as $6.2 billion dollars. At least 16 offerings have been announced...

Ginnie Mae securitization of jumbo mortgage loans with a VA guaranty rose significantly in 2015 despite a volume drop-off in the fourth quarter, according to Inside FHA/VA Lending’s analysis of agency data. Year-over-year results saw an almost 60 percent increase in Ginnie Mae mortgage securitization backed by VA jumbo loans. This was slightly dampened by 17.1 percent drop in VA MBS production in the fourth quarter from the previous quarter. All top-five VA jumbo securitizers – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank, and Quicken Loans – reported significant drops quarter-over-quarter and year-over-year. Wells Fargo delivered a total of $5.0 billion in VA jumbo loans into Ginnie pools, making it the leading jumbo securitizer in that segment. This accounted for 17.7 percent of the market. Freedom Mortgage ended the year with $2.1 billion in ... [ Charts ]

Despite efforts by the Department of Housing and Urban Development to prevent or mitigate fraud, waste and abuse in FHA loan programs, concerns remain about HUD’s resolve to take the necessary actions going forward to protect the FHA insurance fund. Testifying recently during a House appropriations hearing, HUD Inspector General David Montoya said HUD is often hesitant to take strong enforcement actions against lenders. Montoya blames HUD’s tentativeness in carrying out competing mandates of continuing FHA’s role in restoring the housing market and ensuring availability of mortgage credit, and continuing lender participation in the FHA program. For example, he said FHA has been slow in starting claims reviews. “The OIG has repeatedly noted in past audits and other types of lender underwriting reviews HUD’s financial exposure when paying claims on ...

Although appraisals are mostly in line with contract prices, VA and FHA appraisals more often miss the contract price than appraisals for conventional home loans, according to real estate agents’ responses to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The difference gets no clearer than in California where many FHA and VA appraisals are coming in under the contract price. In contrast, appraisals for conventional mortgage loans are coming in as much as 10 percent higher, said a real estate agent in the Golden State. “FHA and VA appraisals are more conservative than conventional,” respondents observed. There are a number of reasons for FHA and VA appraisals coming in lower than conventionals, industry participants say. Although the appraisal process is the same for both government and conventional mortgage programs, FHA and VA appraisal rules require much closer scrutiny of the property to determine whether certain repairs must be made before it can be sold. In addition, no two appraisers are alike. Some appraisers will not give value to upgrades, such as granite countertops or hardwood floors, while others do.

The Mortgage Bankers Association called upon the FHA to update guidance regarding the assumption of FHA-insured loans and, separately, sought additional clarifications on many outstanding policies in the newly revised Single Family Policy Handbook. In a letter to FHA Commissioner Edward Golding, the MBA strongly urged the FHA to revisit and make changes to its loan-assumption policies and procedures, which have gone unchanged since the mid-1980s. With interest rates expected to rise over the next few years, the MBA anticipates the number of FHA loan-assumption requests to increase as well. Stale assumptions would make it virtually impossible for lenders to recover the actual costs incurred while processing them, warned Pete Mills, senior vice president for residential policy. Loan assumption enables a homebuyer to take on the obligations of the ...

The Department of Veterans Affairs has issued additional lender guidance for dealing with the public water contamination problem in Flint, MI. The guidance expands on the agency’s minimum requirements for properties backed by VA loans. The guidance refers to policy in the VA Lender’s Handbook which requires properties to have “a continuing supply of safe and potable water for drinking and other household uses,” before being approved for a VA-backed home loan. In the VA’s view, safe and potable water also refers to water used for bathing, showering and sanitary uses. Properties not in compliance with this requirement will not be eligible for the VA guaranty. Proper mitigation of lead-contaminated water must include a central filtering system that is acceptable to local health authorities and that can provide safe and potable water. Appraisers must comment and adjust for any ...

The Mortgage Bankers Association urged lenders to review the Department of Housing and Urban Development’s new loan-level and lender-level certifications to assess the legal and reputation risks to FHA lending. In a statement, MBA President/CEO David Stevens further urged lenders to analyze whether the new certification language provides sufficient protection from unwarranted false claim enforcement action. The MBA statement came as the Department of Justice, commenting on the new certifications, warned that it will continue to pursue lenders that submit false statements and false claims with the intent to defraud taxpayers. The new loan-level certification language reinforces FHA’s position that lenders should not be penalized for minor mistakes on FHA loans. It requires lenders to certify “to what they know to be true to the best of their knowledge.” Lender-level certification, carved out of the initial loan-level certification, would require lenders to certify they have not ...