Earlier this month, the Supreme Court of the United States agreed to accept Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the latest legal dispute over disparate impact to reach it corridors. However, a ruling by the SCOTUS could extend beyond the mortgage space. The TDHCA distributes the tax credits associated with the Low-Income Housing Tax Credit Program throughout Texas. The ICP is a 501(c)(3) non-profit that works to place low-income, mostly African-American Section 8 tenants in Dallas’s more affluent and largely white suburban neighborhoods. The ICP brought suit against TDHCA back in 2008, accusing the housing agency of disproportionately authorizing LIHTCs for affordable housing developments in largely minority ...

The Department of Housing and Urban Development’s Inspector General has recommended that HUD require an approved FHA lender to reimburse the FHA $1.6 million for improper claims on 11 preforeclosure sales, including lender and borrower incentives. An IG audit of EverBank of Jacksonville, FL, attributed FHA’s losses to the bank’s failure to determine whether or not defaulted borrowers qualified for the agency’s preforeclosure sale program. The IG looked into the bank’s short sale activities because it had the highest preforeclosure sale claims in Florida. More than 50 percent of EverBank’s FHA claims were from short sales, with more than $12.9 million paid from 2011 through 2013, the audit found. In response, EverBank questioned the accuracy of the IG report. The bank maintained that certain allegations do not constitute violations of ...

President Obama this week released his agenda for creating economic opportunity for millennials, including greater access to mortgage credit through FHA. While the economy has recovered and there has been some improvement in the housing market, millennials are on a much slower pace toward homeownership than previous generations, the president said. Many are in rental housing, ready to become homeowners but are locked out by the tough, restrictive lending environment, he added. Millennials – identified as those born between 1982 and 2004, also known as Generation Y – are finding it harder to purchase homes because of lender overlays, high mortgage insurance premiums and high downpayment requirements. It also has been difficult for anyone with a credit score below 680 to obtain a purchase-mortgage loan. In his agenda, Obama expressed concern over the ...

Ginnie Mae securitized a relatively higher volume of loans for African-American borrowers than did Fannie Mae or Freddie Mac, according to a new Inside FHA Lending analysis of recently released Home Mortgage Disclosure Act data covering 2013 mortgage originations. Nearly a quarter, 24.7 percent, of mortgages made to black borrowers last year had FHA, VA or rural housing loans financed through Ginnie Mae, loan-level HMDA data show. Fannie Mae (19.2 percent) and Freddie Mac (9.9 percent) also accounted for large shares of mortgages for black borrowers. However, blacks accounted for just 4.2 percent of mortgages with the race of the primary borrower identified in HMDA reports. Fannie actually had a bigger share of the Hispanic market (24.7 percent), but Ginnie accounted for a substantial 17.3 percent of mortgages made to Hispanic borrowers last year. All three agencies saw ... [1 chart]

CFPB, Other Feds, Issue Guidance on Unfair or Deceptive Credit Practices. In another changing of the regulatory guard, the Federal Reserve is repealing its Regulation AA (unfair or deceptive acts or practices), as per the mandate of the Dodd-Frank Act, reflecting the fact that the CFPB has inherited the Fed’s authority over such practices. At the same time, the Fed joined the CFPB, the Federal Deposit Insurance Corp., the National Credit Union Administration, and Office of the Comptroller of the Currency in issuing joint interagency guidance on the subject. The guidance notes that while the Federal Trade Commission’s credit practices rule remains in effect, the credit practices rules for banks, savings associations, and federal credit unions are being repealed as ...

Mortgage lenders are getting weary of the seemingly never-ending supply of new regulations and proposals coming from the CFPB – with the latest being last month’s issuance of the bureau’s proposed rulemaking to ratchet up lender reporting requirements under the Home Mortgage Disclosure Act. Lenders of all size are concerned that the proposal goes beyond what is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and means increased compliance costs that will be passed onto consumers. And representatives of smaller institutions fear they will once again be set at a competitive disadvantage vis-à-vis larger lenders. Additionally, consumer data privacy considerations have emerged as another concern. The bureau, for its part, pitched the proposal as a way to improve ...

The FHA’s widespread reduction in loan limits for 2014 has had a mixed impact on production levels so far this year, according to a new Inside FHA Lending analysis of FHA endorsement data. Through the first four months of 2014, FHA endorsements were down 55.6 percent from the same period last year. But in counties where loan limits were lowered, FHA production was down 57.5 percent from early 2013. In the relatively few counties where loan limits actually increased in 2014, FHA endorsements were also down from a year ago, but by a less severe 47.4 percent. The biggest decline in endorsements has been in refinances, especially FHA-to-FHA refinances. In areas with lowered loan limits, production of these loans has plummeted 87.0 percent, and even areas with raised loan limits saw an 81.1 percent drop in streamlined refis. Purchase-mortgage originations have taken less of a ...

The FHA is seeking comment on two new sections of a proposed single-family handbook for mortgage lenders. The handbook is in development. Once completed, it will serve as the centralized source of current and future FHA policies. Agency staff is collating policies from several handbooks, rules, mortgagee letters, notices and other sources to incorporate into the handbook. The FHA is publishing two new sections, “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and Compliance,” for comment. The “Doing Business” section lays out the requirements for FHA lender approval, including eligibility requirements, application processes, operating requirements and post-approval changes. The section also contains the recertification process as well as processes for applying for ...

Last week, the CFPB ordered GE Capital Retail Bank – a financial institution in New Jersey now known as Synchrony Bank – to provide approximately $225 million in relief to consumers harmed by alleged illegal and discriminatory credit card practices. Under the terms of a consent order brought by the bureau, GE Capital is required to refund $56 million to approximately 638,000 consumers who were subjected to allegedly deceptive marketing practices. As part of the joint enforcement action by the CFPB and Department of Justice, GE Capital must also provide an additional $169 million to about 108,000 borrowers excluded from debt relief offers because of their national origin. The consent order represents the federal government’s largest credit card discrimination settlement in history...

Barring any unpleasant news, Julian Castro, President Obama’s nominee for secretary of the Department of Housing and Urban Development, apparently has passed his job interview with the Senate Banking, Housing and Urban Affairs Committee. This week, Castro, a three-term mayor of San Antonio, TX, laid out his priorities as HUD secretary before committee members if he is confirmed for the job. Castro underscored the importance of “partnership and pragmatism” as the key drivers in running a city. As HUD secretary, Castro said he would enhance “cross-agency collaboration” and emphasize the value of “measuring results” by setting precise goals, consulting with the public on major issues, developing a public report card and annual updates – tools he employed in his municipal housing education and affordable housing initiatives in San Antonio. As mayor, Castro worked to ...