The Department of Housing and Urban Development has charged Fifth Third Bank and a mortgage broker with discrimination for allegedly requiring medical proof from a couple with disabilities who were seeking FHA refinancing. Fifth Third Bank, Fifth Third Mortgage Co. and Cranbrook Mortgage Corp. were accused of violating the Fair Housing Act, which makes it illegal for creditors to deny or discriminate against borrowers based on disability, race, color, religion, national origin, gender or family status, including imposing different application or criteria on protected classes. The married couple, whose names HUD withheld, receive ...

VA Loan Guaranty: New Percentage to Determine Net Value of Collateral. The Department of Veterans Affairs has revised the percentage lenders and mortgage holders in the VA loan guaranty program use in calculating the purchase price of a property that secured a terminated loan. Effective Oct. 8, 2013, the new percentage is 14.95 percent, up from 11.87 percent, which has been in place for the past 12 years. North Carolina Amends Anti-Predatory Lending Law. The Tar Heel State enacted HB 692 on Aug. 23 to strengthen current consumer protections against ...

Look for the Senate leadership from both sides of the aisle to ramp up efforts to craft new legislation on comprehensive mortgage finance reform when Congress returns from its summer recess next week, although industry observers predict lawmakers will make only marginal progress this fall. Last month, at the behest of Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, senior committee staff met with various industry “stakeholders” – including trade associations, consumers groups and academics – to hear their thoughts on housing finance reform and the fate of Fannie Mae and Freddie Mac, according to meeting participants. The meeting takeaway among the stakeholders who spoke with Inside Mortgage Finance is...

With the most significant collection of regulations to hit the mortgage industry in decades just a few months away from implementation, mortgage lenders are feeling tremendous pressure and continue to clamor for relief from regulators. Last week, the Mortgage Bankers Association asked the Consumer Financial Protection Bureau for a grace period of six to 12 months before it takes enforcement actions under any of the new mortgage rules implementing the Dodd-Frank Act. “Since the rules were issued...

The reverse mortgage lending industry is working with the Department of Housing and Urban Development to implement two policy changes that would strengthen the FHA’s Home Equity Conversion Mortgage program. One policy change involves the development of a new HECM option that combines features of the fixed-rate, full-draw HECM Standard and the HECM Saver, according to Peter Bell, president and chief executive officer of the National Reverse Mortgage Lenders Association. HUD eliminated the standard 30-year, fixed-rate HECM in April because ...

Recent public comments by President Obama and Congressional leaders have seemingly re-energized the debate over housing finance reform even though some are questioning the cashiering of the now profitable GSEs. But as lawmakers draft and/or refine dueling bills, it remains to be seen whether summer recess chatter will translate into an actionable legislative result this fall, say industry observers. In a highly anticipated speech last week, the president didn’t break much new ground in calling for Fannie Mae and Freddie Mac to be wound down through a “responsible transition.” However, Obama listed among his key reform principles that private capital should be in a first-loss position and the government should provide an appropriately priced, explicit government guaranty to ensure continued access to the 30-year fixed-rate mortgage.

The Federal Deposit Insurance Corp. would be prohibited from repudiating covered bonds when resolving a failed banking institution under the provisions of a controversial housing reform bill put together by the Republican leadership of the House Financial Services Committee and passed out of committee last week. That prohibition would go a long way toward resolving the long-standing hurdles that have thwarted development of a covered bond market in the United States. But it also amps up the level of controversy associated with H.R. 2767, the Protecting American Taxpayers and Homeowners Act of 2013, introduced by Committee Chairman Jeb Hensarling, R-TX, and Rep. Scott Garrett, R-NJ, the architect of a covered bonds bill introduced in the 112th Congress. The relevant provisions in the PATH Act are...

The mortgage banking industry has commended the Senate Committee on Banking, Housing and Urban Affairs on passing the FHA Solvency Act earlier this month but raised concerns about the bill’s indemnification provision. In a letter to Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, David Stevens, president of the Mortgage Bankers Association, said some deserving borrowers are being shut out of FHA because of strict credit overlays that lenders add to avoid indemnification risks. Stevens said when the Department of Housing and Urban Development is able to require ...

President Obama this week affirmed his view that Fannie Mae and Freddie Mac should be wound down through a “responsible transition” to a new mortgage finance system that preserves the 30-year fixed-rate mortgage while emphasizing private capital. In a highly anticipated speech in Phoenix this week, Obama listed among his key reform principles that private capital should be in a first-loss position and the government should provide an appropriately priced, explicit guaranty to ensure continued access to the 30-year FRM. Those are the major components of the bipartisan reform legislation drafted by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, although the president did not mention the bill by name. Obama also said...

The wrath of Wall Street has descended upon Richmond, CA, after the city council adopted a plan using eminent domain to seize underwater mortgages, as a last resort, and resell them to beleaguered homeowners at a lower price. The American Securitization Forum, the Securities Industry and Financial Markets Association and the Association of Mortgage Investors condemned Richmond’s decision to implement an April 2 agreement with Mortgage Resolution Partners (MRP) to use eminent domain to address the city’s severe foreclosure problem. The city became the first municipality in the country to adopt such an approach, though not the first to consider the idea. Richmond, like many California cities and municipalities, was hit...