The FHA has issued long-anticipated rules for approving condominium developments, including the reinstatement of spot approvals and mandatory recertification of condo approvals every three years rather than the current two-year requirement. The rules are designed to make it easier for condo projects to qualify for FHA financing and for borrowers to purchase affordable single-family units with a low 3.5 percent downpayment. The comment period ends on Nov. 28, 2016. The Department of Housing and Urban Development eliminated...

The Department of Housing and Urban Development is set to receive more than $140 million in settlements with three individual lenders in connection with defective loans they originated with FHA insurance. Freedom Mortgage Corp., M&T Bank, and Land Home Financial Services all reached separate agreements this year with the Department of Justice on behalf of the HUD Inspector General to resolve the allegations. On April 15, Freedom agreed to pay $113 million, in response to charges that “it engaged in certain conduct in connection with its origination, underwriting, property appraisal and quality of certain single-family mortgages insured by FHA.” The disputed forward loans were insured by FHA between Jan. 1, 2006, and Dec. 31, 2011, which resulted in claims submitted to HUD on or before June 15, 2015. HUD incurred substantial losses when it paid claims on the ...

New FHA guidance for dealing with mortgages with a Property Assessed Clean Energy (PACE) obligation went into effect last week but uncertainty lingers and its full impact remains to be seen, according to an industry attorney. The Department of Housing and Urban Development has issued guidance specifically allowing properties encumbered by a PACE lien to be eligible for FHA mortgage financing for both purchase and refinance loans. The department of Veterans Affairs has issued similar guidance. According to Erika Sonstroem, an attorney with the law firm Bradley Arant Boult Cummings, the PACE industry is touting the guidance in its pitches to lenders as posing no risk to mortgage investors. PACE is a program that lends money to homeowners for home-energy savings projects. It is treated much like a tax lien on a property and is included in the ...

HUD Issues Guidance on Fair Housing Act Protections for People with Limited English Skills. The Department of Housing and Urban Development has issued guidance on how the FHAct applies to claims of discrimination by people who either lack or have poor English communication skills. The guidance is significant because more than 25 million people in the United States do not speak, read or write in English very well, said HUD in a statement issued with the guidance. Nearly 9 percent of the U.S. population is limited in English proficiency. The majority of these people speak Spanish, while the rest are comprised of speakers of Chinese, Vietnamese, Korean, and Tagalog (the main dialect spoken by Filipinos). The FHAct prohibits any overt act of discrimination in the rental or ...

Ginnie Mae issued $46.5 billion of single-family mortgage-backed securities in August, up slightly from July, according to an analysis of Ginnie data. Single-family MBS monthly issuance in August was the highest monthly volume so far this year. Total issuance also was up 12.3 percent from the same month last year., Strong purchase and refinance originations in the second quarter helped push production in the third quarter. Although purchase loans with private mortgage insurance outpaced gains in FHA and VA loans in the second quarter, deliveries to Ginnie so far appear to indicate a strong third quarter. Meanwhile, VA volume has been fueled largely by refinance activity over the past few years and does not appear to be letting up. PennyMac and Freedom Mortgage battled for first place with $4.35 billion and $4.34 billion, respectively, in MBS issuance in August. Despite cutting back on its ... [1 chart]

Homebuyers in two housing markets encompassing 13 states relied more on FHA and VA than other types financing, according to a new industry study of new single-family homes started in 2015. A study by the National Association of Home Builders found, among other things, that government-backed purchase lending and other forms of non-conventional mortgage financing remained elevated in 2015. For example, homebuyers in the South Atlantic and West South Central regions favored FHA and VA loans over other types of home-purchase financing. States in the South Atlantic region include Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia. Washington, DC, is also in this region. West South Central states are comprised of Arkansas, Louisiana, Oklahoma and Texas. Together, the two regions accounted for more than 26 percent and 21 percent of the ...

A California FHA lender could face monetary penalties totaling $242,828 for deficient mortgage underwriting and exposing the FHA insurance fund to increased risk of loss and fraud. A Department of Housing and Urban Development inspector general’s audit of Sun West Mortgage Co. of Cerritos, CA, also alleged unauthorized use of foreign staff in another country to “pre-underwrite” FHA loans. The audit was triggered by a complaint the IG Office received in November last year alleging that Sun West, an approved FHA lender since 1980, was not underwriting FHA loans properly. In addition, the complaint alleged that Sun West was having the loans pre-underwritten by a company in another country, in violation of HUD rules. Neither the company nor the country was identified in the audit report. The complaint further alleged that employees at Sun West shared user identification numbers for ...

FHA saw a modest rise in originations midway through 2016 compared to the same period last year, but VA did a lot better with a double-digit increase in loan production, according to an analysis of Ginnie Mae data. Lenders delivered $123.0 billion of FHA-insured loans to Ginnie pools during the first half of 2016, up 8.4 percent from the previous year. FHA’s midyear production was driven by a surge in purchase-mortgage lending in the second quarter, which also pushed volume higher for VA as well as conventional-conforming mortgages. Government-backed lending rose 32.3 percent from the first quarter to approximately $131.0 billion in second-quarter originations, according to Inside Mortgage Finance, an affiliate publication of Inside FHA/VA Lending. It was the highest three-month total for government-insured lending on record, although private mortgage insurance did more business in the ... [2 charts]

A new audit report from the Department of Housing and Urban Development’s inspector general recommended that the agency continue its efforts to collect millions of dollars in partial claims that came due during fiscal year 2015. According to a HUD IG report, the department left uncollected approximately 1,361 partial claims, worth about $21.5 million. The IG discovered the oversight during an audit of HUD’s partial claim collections. The IG reviewed a statistical sample of 135 of 10,561 partial claims associated with FHA loans that terminated in FY 2015. “HUD had not collected 36 of the claims that should have been collected,” the report stated. “We used this result to project that a total of 1,361 partial claims were not collected.” The claims were never returned to the FHA mortgage insurance fund, as required by agency rules, to strengthen FHA solvency, the report said. A partial claim is a loss ...

The Federal Communications Commission has issued a baffling final rule restricting the way servicers can collect on or service student loans, mortgages and other debts owed to the federal government.Specifically, the rule implements a key provision in the Bipartisan Budget Act of 2015 amending the Telephone Consumer Protection Act to exclude robocalls from the TCPA consent requirement if they are made solely to collect a debt owed to or guaranteed by the federal government.The TCPA generally requires a caller to obtain “prior express consent” from the call recipient before making a telemarketing call or an auto-dial call to the recipient’s landline or cell phone.However, the mortgage industry raised concerns that TCPA’s consent requirement could create potential liability for important servicing calls that could help homeowners save their homes, which prompted Congress to pass the Budget Act amendment. Last month, the FCC specifically excluded the federal government from the TCPA’s consumer protections by ruling that the government is not a “person” subject to the TCPA. Here is where the FCC rule gets confusing. commission is authorized to adopt rules to “restrict or limit the number and duration” of any wireless calls to collect debt owed to the federal government.”