A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...

The FHA is trailing Fannie Mae, Freddie Mac and the Department of Veterans Affairs in the disposition of real estate-owned properties, according to a new study from the Government Accountability Office. The study found that FHA’s net proceeds from REO sales from January 2007 through June 2012 were about 4 to 6 percentage points lower than Fannie’s and Freddie’s returns. The differences in combined returns between FHA and the government-sponsored enterprises persisted at an estimated 2 to 5 percent even after controlling for differences in value, location, market conditions and other relevant factors. In addition, the FHA took about ...

The Department of Housing and Urban Development has updated its lender requirements for preforeclosure sale (short sale) and deed-in-lieu of foreclosure for implementation on Oct. 1 this year. The short sale or deed-in-lieu of foreclosure are the last options available to a distressed borrower if home-retention options, such as special forbearance, loan modification, partial claim, and FHA’s Home Affordable Modification Program are not successful. A short sale allows the borrower to avoid foreclosure by selling the home for less than the loan balance. The lender recovers the remainder from ...

Ginnie Mae servicers continued to experience modest increases in servicing outstanding while FHA servicers reported a slight increase in 30-to-60 day delinquencies, according to Inside FHA Lending’s analysis of the agencies’ servicing portfolios as of midyear 2013. As of June 30, Ginnie Mae’s total servicing outstanding was $1.4 trillion, an increase of 6.6 percent from last year and up 1.8 percent from the first quarter, reflecting improvements in government-backed loan originations due to a slowly recovering economy. Ginnie Mae servicing volume has been ... [2 charts]

Some of the nation’s largest banks – including Bank of America, JPMorgan Chase and Wells Fargo – have begun cutting mortgage production workers as refi applications decline. But it remains to be seen just how many of the 215,000 full-time mortgage-related positions – excluding loan brokers – will see pink slips over the rest of the year. “What we’re seeing is a natural outcome of contraction as the market slips and changes to a purchase business,” said Dave Stevens, president of the Mortgage Bankers Association. He declined to give any job cut estimates, but predicted that residential lenders of all different charters and types will move to “right-size their organizations.” Some bearish industry officials believe...

Flagstar Bank is reportedly working on a deal to sell a large chunk of its mortgage servicing rights while retaining a subservicing contract to continue administering the loans. The bank declined to talk about its plans, but during an earnings call this week officials gave more clues that it’s contemplating such a maneuver. They told analysts that Flagstar has taken a close look at how it services mortgages, discovering that it’s quite good at servicing performing loans, but not so good with high-touch product. Sondro DiNello, president and chief executive of the bank, also declared...

Most banks that have reported second-quarter earnings said their mortgage banking income declined from the first three months of 2013, but profitability remained strong, according to a new Inside Mortgage Trends analysis of corporate disclosures. A group of 15 banks that includes most of the top depository institutions in the mortgage business reported a combined $6.72 billion in mortgage banking income during the second quarter of 2013. That was up 5.0 percent from the earnings ... [Includes one data chart]

Consumer complaints filed with the Consumer Financial Protection Bureau about their residential mortgages fell to 12,531 during the second quarter, down 9.2 percent from the first three months of the year, according to an analysis of the bureau’s complaint database by Inside the CFPB, an affiliated publication. That rate of decline is better than the overall 8.2 percent drop in complaints seen across all financial services product lines in aggregate, but not as good as the declines related to ...

Many mortgage lenders make a stab at getting consumer feedback, but more often than not seem to end up with limited success, at best. The StratMor Group, a mortgage banking consultancy, and CFI Group, an analytics and technology firm, are helping lender clients find success in obtaining direct borrower feedback 24 hours, seven days a week, with their MortgageSAT service where others have been finding failure. MortgageSAT is a turnkey solution to providing real-time borrower feedback to mortgage companies ...

You would think that a bank with a small presence in mortgages would jump at the opportunity to keep the fast-growing residential arm of a merger partner. But that’s not the case with MF Financial, a mid-sized bank that earlier in the week announced that it would buy Taylor Capital, parent of Cole Taylor Bank, in a stock deal valued at $680 million. Although MF Financial took a close look at the subsidiary, Cole Taylor Mortgage, it decided that the unit is not essential to the deal. In fact, it’s so non-essential ...