Quicken Loan’s lawsuit against the government could help provide some certainty to lenders as to the proper legal standard for evaluating compliance with FHA rules and whether loan sampling is a permissible post-endorsement review strategy, according to legal experts. The adjudication of Quicken’s case against the Department of Justice in a public forum should clarify FHA policies, procedures, and the degree of future liability risks, experts said. Quicken Loans, the top FHA lender in 2014, sued the Department of Justice in federal court in Detroit April 17, accusing it of high-pressure tactics to admit wrongdoing and of using a small sample of flawed loans as a basis for claims under the False Claims Act. Up to that time, Quicken Loans had been the subject of an ongoing DOJ probe, which began three years earlier, in relation to its FHA lending practices. Quicken also asserted that, before filing its lawsuit ...

A high percentage of VA loans are not closing on time, potentially creating a disincentive for borrowers to use the product and opt for the competition instead, according to the latest Campbell/Inside Mortgage Finance’s HousingPulse Tracking Survey. Data showed that the share of VA loans closing on time declined to 55 percent in March 2015 from 70 percent in April 2014. This suggests that 45 percent of VA loans are experiencing serious delays in closing. “For VA, this is a significant change for the worse,” said Tom Popik, designer of the survey. The VA’s average closing time is 41 days as of March this year, up from around 39 percent a year ago. Comparatively, 75 percent of Fannie Mae and Freddie Mac loans with private mortgage insurance are closing on time as of March 2015, up from 68 percent a year ago. When delayed, VA closing takes a lot longer, 29 additional days, up from ...

Sen. Chuck Grassley, R-IA, chairman of the Senate Committee on the Judiciary, has asked the Department of Housing and Urban Development to explain the duties and functions of two officials who were appointed as “principal deputy assistant secretary.” The appointments make it appear that HUD is deliberately circumventing the nomination process by creating new official titles for appointees without obtaining Senate confirmation, said Grassley. If that is the case, HUD Secretary Julian Castro may be in violation of the Vacancies Reform Act of 1998, the lawmaker warned. The statute provides several mechanisms to fill job positions that require candidates to be nominated by the President with the advice and consent of the Senate. “The Vacancies Act also declares that those mechanisms are the exclusive means of filling vacancies,” Grassley said. “Creating new job titles is not ...

Mortgage-related complaints to the CFPB are falling through the floor on just about every key metric, according to the latest analysis of bureau data by Inside the CFPB, fueled mostly by a plunging in gripes about loan modifications. The data reflect the depressed levels of mortgage originations in recent years as well as a continued rebound in home price appreciation. The plunge is most notable when comparing first-quarter 2015 numbers with the same period last year. For instance, total consumer gripes about their home loans fell 33.5 percent in 1Q15 versus 1Q14. The fall in belly-aching about loan mods was even more dramatic, down 38.6 percent, the data show.Consumer criticisms about mortgage servicing also declined markedly but not quite ...

Consumer complaints to the CFPB fell in most financial service product segments during the first quarter, not only from the previous quarter but also from one year ago, according to the latest analysis of bureau data by Inside the CFPB. Total gripes in the first quarter of 2015 declined 8.2 percent from the fourth quarter of 2014, and slid 17.0 percent compared to the first quarter of 2014. Once again, consumer criticisms about residential mortgages led the decline in both timeframes, dropping 20.3 percent quarter over quarter and plunging 33.5 percent year over year. The fall-off is likely due to the shrinkage in overall mortgage originations as well as the continued recovery in the overall housing and mortgage markets.The [with exclusive data chart] ...

The Department of Housing and Urban Development’s Office of the Inspector General has finalized settlements with two direct endorsement lenders to resolve allegations of violating FHA underwriting requirements. Golden First Mortgage Corp. and Group One Mortgage agreed to pay a total of $36.41 million to the federal government in reparation for losses incurred by the FHA on the defaulted loans. Based in Great Neck, NY, Golden First, a privately held company, and its owner/president, David Movtady, allegedly falsely certified to FHA and HUD that the loans the company endorsed for insurance met all FHA requirements. This went on from 2002 through 2010, the OIG alleged. The OIG accused the company and Movtady of violating the False Claims Act, which prohibits acts to defraud the federal government and which has been instrumental in ...

Six of the top 10 firms that are the targets of consumer complaints about money transfers saw such submissions drop by double digits from the third quarter of 2014 to the fourth quarter, according to the latest analysis by Inside the CFPB.Overall gripes for all 1,700 companies tracked are down 16.1 percent during that period. However, consumer criticisms are up 52.5 percent when measuring the last nine months of 2014 against the last nine months of 2013. The CFPB started to collect complaints about money transfers in 2Q13.The worst performance in that period was Citibank, which saw complaints jump 133.3 percent.Overall concerns about fraud are head-and-shoulders above any [with one exclusive data chart] ...

The CFPB announced last week it is now giving consumers the chance to “opt in” and share their complaint narratives in the CFPB’s public-facing consumer complaint database. Under the new final policy statement – after a summer 2014 request for information – consumers must opt in to share their story and they may opt out at any time. Also, personal information will be removed from narratives. Further, complaint narratives have to meet certain criteria to qualify for publication. For instance, the complaint must be submitted through the CFPB website, and the complaint must not be a duplicate submission.The one substantive criterion is that the consumer must have a confirmed relationship with the financial institution. Elsewhere under the new policy, companies can ...

Loan Modification Trial Payment Plans for Forward Mortgages. The Department of Housing and Urban Development has announced requirements for trial plan duration, required signatures, and reporting for trial payment-plan agreements, and the conditions under which FHA deems a TPP to have failed.Lenders must implement the requirements in Mortgagee Letter 2015-07 for all TPPs offered to borrowers on or after June 1, 2015. FHA Publishes Additional Sections of HUD Single-Family Policy Handbook. The FHA has published additional sections for the SF Handbook, including the following: Doing Business with FHA – Lenders and Mortgagees Doing Business with FHA – Other participants in FHA Transactions – Appraisers; Quality Control, Oversight and Compliance – Lenders and Mortgagees; Quality Control Oversight, and Compliance – Other Participants in FHA Transactions – Appraisers ...

Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...