The Department of Housing and Urban Development said it would review and update as necessary its requirements for servicers of FHA-insured loans in conjunction with the establishment of new standards by the Consumer Financial Protection Bureau. HUD wants to ensure coordination between the FHA and CFPB standards and that each set of standards provides effective solutions for borrowers, said an FHA spokesman. On April 9, the CFPB previewed some of the mortgage servicing rules, which the agency plans to propose this summer and adopt in January 2013. It is unclear whether ...

Implementing proposed legislation aimed at improving the safety and soundness of the FHA single-family program would cost taxpayers $11 million over a four-year period if the bill is enacted in late 2012 and the necessary amounts are appropriated each year, according to the Congressional Budget Office. In an analysis of H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, the CBO estimated that $9 million would be spent on mandatory actuarial studies on the health of the FHA Mutual Mortgage Insurance Fund and $2 million for other costs over the 2013-2017 period. The legislation would not affect direct spending or revenues and, therefore ...

There is nothing in the FHA guidelines that would make a loan ineligible for FHA insurance if the property were located near high-voltage power lines, according to an agency official. Testifying during a recent congressional field hearing, Bobbi Borland, acting branch chief of the Department of Housing and Urban Development’s Santa Ana Homeownership Center, said FHA-insured mortgages are based on the property’s appraised value at the time of origination, as determined by an FHA-approved appraiser. “There is simply no easy way to identify whether ...

Ally Financial has announced a plan to reduce its purchases of government-backed loans from brokers and correspondents and shift its government financing activity to retail and direct channels. The lender informed its partners of its plan to reduce its FHA and VA operations in the correspondent and wholesale broker channels effective April 16. However, Ally will continue its correspondent relationships with key customers. In 2011, like most lenders, Ally focused on the agency market, with conventional conforming mortgage loans comprising ...

Mortgage industry participants have mixed views about the FHA’s revised policy on disputed debt despite a general concern over its impact on borrower eligibility and lenders’ bottom lines. This week, the FHA delayed implementation of the policy until July 1 to get more feedback from lenders and industry participants and to work on clarifying guidance. The policy’s initial effective date was April 1. Lenders felt the FHA had bypassed them when the agency decided to announce the policy revision in a Feb. 28 mortgagee letter, along with other FHA underwriting changes. Affected parties should have been able to ...

A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...

The focus on foreclosure documentation on forward mortgages has set the stage for similar scrutiny on reverse mortgages, and the extra documentation required in a reverse mortgage adds to this challenge, according to compliance experts. In a recent legal analysis, Christopher Willis and Mercedes Kelly Tunstall, litigation attorney and of counsel at the Washington law firm Ballard Spahr, respectively, said reverse mortgage lenders and servicers could avoid many of the problems encountered by forward mortgages by examining their foreclosure process carefully and learning from ...

The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUD’s new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...

Certain watchdog agencies of the federal government have expressed concern to Congress about whether additional steps already taken by the FHA and Ginnie Mae to improve their risk management are sufficient to avert potential government intervention. A recent study by the General Accountability Office and testimony by Department of Housing and Urban Development Inspector General David Montoya before a House panel have raised questions about the financial stability of the FHA and Ginnie Mae and their ability to respond to a major financial crisis. Both the GAO and Montoya concluded that the two agencies...

The FHA’s total capital resources dipped slightly by $400 million in the last three months of 2011, but things could have been much worse had it not been for lower claims activity, according to the FHA’s quarterly report to Congress on Mutual Mortgage Insurance Fund programs. On balance, the report shows little change and nothing unexpected during the quarter, said industry participants. The much-anticipated changes will come after two FHA premium adjustments become effective on April 1 – an annual mortgage insurance premium increase of 10 basis points and a 75 bps hike in upfront premiums, they said. The upfront premium increase is expected to ...