The Federal Housing Finance Agency and the National Credit Union Administration recently filed separate lawsuits seeking repurchases of mortgages in non-agency mortgage-backed securities. The FHFA lawsuit filed in August against DB Structured Products relates to ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM1, which Freddie Mac purchased in August 2006. The FHFA did not disclose the size of Freddie’s investment. And last week the NCUA filed a lawsuit against UBS Securities ... [Includes three briefs]

The reverse mortgage industry is at odds with consumer advocates and the Consumer Finance Protection Bureau over a recent CFPB study, which claimed that consumers find reverse mortgages too complex and difficult to understand and that the risk of fraud and other scams persist. The latest dispute flared as reverse mortgage lenders and consumer groups responded to the CFPB’s request for information on abusive financial practices that affect elderly Americans. The comment period ended on Aug. 31. To assist its ongoing study of reverse mortgage transactions, the CFPB in July sought ...

Fannie Mae and Freddie Mac both saw substantial declines in deliveries of home mortgages with balances exceeding $417,000 during the second quarter, offsetting a significant increase in FHA originations of conforming jumbo loans. Combined, the three agencies did $24.1 billion in conforming jumbo mortgage business – loans on single-unit properties in the lower 48 states that exceed the old $417,000 loan limit. That was down 16.3 percent from the first three months of 2012 at a time when overall mortgage origination volume fell 5.2 percent. Meanwhile, originations of non-agency jumbo loans rose...[Includes two data charts]

The Federal Housing Finance Agency’s streamlined short sale guidelines set to kick in Nov. 1 could increase losses on certain home-equity loans and second liens held in bank portfolios, according to a recent analysis by Fitch Ratings. Under the new guidelines, which were announced last month, servicers will be able to accelerate their processing of a short sale for borrowers with eligible hardships without any additional approval from either of the government-sponsored enterprises. This will ...

Despite increased activity in the Fannie Mae and Freddie Mac refinance programs for underwater borrowers during the second quarter of 2012, total refi originations declined by 4.8 percent from the first three months of the year, according to a new Inside Mortgage Finance analysis and ranking. Refinance activity still accounted for 68.1 percent of originations during the most recent quarter, but that was down from 75.3 percent in the first three months of the year. Partly offsetting the drop in refi business was a 35.8 percent increase in purchase-mortgage originations, which rose to an estimated $129.0 billion in the second quarter. But compared to the first half of 2011, purchase-mortgage lending was down 1.3 percent as of the midway point this year. Refinance originations appear to be climbing in the third quarter. Data on Fannie and Freddie securitization activity in July and August suggest that total refi business at the government-sponsored enterprises is...[Includes four data charts]

The blowback over yield-spread premiums and subprime mortgages continued in Lee v. Countrywide Home Loans, Inc., in which the U.S. Court of Appeals for the Sixth Circuit has determined that a lender – in this case, Countrywide Home Loans, and by extension, parent Bank of America – may be liable under state common law claims of civil conspiracy for failing to disclose fees paid to a mortgage broker. This subprime mortgage case was brought by the borrowers (the Lees) against the lender (Countrywide), its parent company (Bank of...

The Department of Housing and Urban Development said it will step up its oversight of the department’s loan quality review to ensure that weaknesses, such as those uncovered in a recent internal audit, will not happen again. An audit performed by the agency’s Office of the Inspector General concluded that HUD’s Quality Assurance Division had adequate oversight of lenders’ compliance with FHA underwriting standards but for two loans that apparently eluded reviewers. QAD reviewers are required to ...

FHA jumbo activity kicked into high gear in the second quarter of 2012 as originations jumped more than 30 percent from the first quarter, Inside FHA Lending’s analysis of FHA data showed. The volume of FHA loans exceeding $417,000 totaled $6.33 billion in the second quarter, up from $4.78 billion during the first quarter. FHA jumbo production was robust during the first half of the year as the top lenders reported $11.1 billion in total originations, which was 9.1 percent more compared to the same period a year ago. Purchase jumbo loans accounted for ...

The Treasury Department’s recent announcement on the next steps to “wind down” the government-sponsored enterprises will have little immediate impact on the non-agency market, according to industry analysts. The Treasury will require Fannie Mae and Freddie Mac to contribute all future profits to the government, reduce their investment portfolios at a quicker pace and submit annual plans to reduce mortgage credit risk. “[The changes] will help expedite the wind down of Fannie ... [Includes one chart]

$7.5 Million FHA Mortgage Fraud Scheme. The Department of Justice has filed charges against top executives of a real estate brokerage for their participation in a mortgage fraud scheme that may cost the FHA $7.5 million in losses. Indictments were unsealed earlier this month in Manhattan federal court charging Mitchell Cohen and Erin Davis, the owner and sales manager, respectively, of Buy-A-Home, a real estate brokerage business in Queens, NY. The criminal charges follow a civil fraud lawsuit filed by the U.S. Attorney’s Office for the Southern District of New York last December against ...