Goldman Sachs last week announced it has agreed to a $5.1 billion settlement, the largest regulatory penalty in the firm’s history, concluding an investigation brought by the Residential MBS Working Group of the U.S. Financial Fraud Enforcement Task Force. The agreement in principle is poised to resolve actual and potential civil claims by the U.S. Department of Justice, the New York and Illinois attorneys general, the National Credit Union Administration (as conservator for several failed credit unions) and the Federal Home Loan Banks of Chicago and Seattle. At issue are...

The number of foreclosed properties and length of time it takes to foreclose is trending downward, but average time to foreclose is taking nearly three years or more in some states. RealtyTrac recently released its 2015 foreclosure report and noted that it took more than 1,000 days to foreclose in six states in the fourth quarter, with New Jersey leading the way at 1,180 days. That number is...

The Mortgage Bankers Association and flood insurance providers expressed support for legislation that would ensure the continued availability of federal flood insurance and, at the same time, facilitate the development of a private market for flood insurance. Industry representatives called for appropriate and timely long-term reforms to improve the National Flood Insurance Program, which provides mandatory flood insurance through private “write-your-own” flood insurance providers. Having gone through several extensions by Congress, the NFIP is scheduled to expire on Sept. 30, 2017, hence the call for private capital to provide flood coverage outside the NFIP. Testifying on behalf of the MBA during a recent House Financial Services Committee hearing, Steven Bradshaw, executive vice president of Standard Mortgage, said...

The Department of Veterans Affairs has posted a chart on its web site showing the revised maximum allowable foreclosure timeframes for each state in 2016. State foreclosure timeframes are used in calculating the maximum interest payable on a foreclosure of a VA loan. They are subject to annual reviews and revised as needed. The chart reflects maximum allowable foreclosure periods that include the 210 calendar days for unpaid interest as well as foreclosure periods without the 210 days. Specifically, the chart shows timeframes the VA has determined to be “reasonable and customary” for all states, following an annual review of amounts allowed by other government-related home loan programs, such as FHA, Fannie Mae and Freddie Mac. The chart also lists the maximum amounts that will be paid on a claim processed in the ...

Radian Guaranty became the first among seven private mortgage insurers to declare compliance with the regulatory capital standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs). Radian met its PMIERs goals after receiving $325 million in cash and marketable securities from its parent Radian Group in exchange for a surplus note. In addition, the parent firm contributed $50 million to an exclusive affiliated reinsurer of Radian Guaranty. Radian Group expects the capital cushion to increase based in part on expected future financial performance at its MI subsidiary. Monies from other sources, including a profit commission of about $8 million based on performance to date, and $8.5 million in prepaid supplemental ceding commission also contributed to the MI’s capital. Hence, Radian Guaranty is not expected to require any additional capital contributions in order to ...

The national loan limit for FHA-insured single-family mortgages will remain unchanged throughout 2016, but 188 counties will see their high-cost limits rise due to house-price changes. The FHA national loan limit “ceiling” for forward mortgages will remain at $625,500, while the FHA “floor” will stay at $271,050 for next year. For example, San Francisco, Los Angeles, Marin, and Silicon Valley, where the loan limits are currently at $625,500, will see no change in 2016. The same will be true for many counties whose FHA loan limits fall between the national floor and ceiling, like Sacramento and Fresno, for instance. On the other hand, 188 counties like Napa, Riverside, San Bernardino and San Diego will see their forward loan limits increase by at least $1,150 to as much as $30,240. Each year, FHA readjusts its loan limits based on 115 percent of the median house price in the area. The loan-limit floor is set at ...

Approximately $191.8 billion in FHA-insured mortgage loans were securitized during the first nine months of 2015, surpassing the $158.1 billion of FHA loans that were placed in Ginnie Mae pools last year, agency loan-level data show. Securitized FHA purchase loans accounted for $111.7 billion of Ginnie Mae mortgage-backed securities issued over the same period. FHA refinance securitization totaled $66.8 billion. Modified FHA loans were also included in Ginnie MBS totals. The FHA loans in Ginnie MBS had an average loan-to-value ratio of 92.9 percent and an average FICO score of 677.5 percent, reflecting the single-family program’s traditional borrower base. The loans had an average debt-to-income ratio of 39.8 percent. FHA loans accounted for 19.8 percent of loans that underlie Fannie Mae, Freddie Mac and Ginnie Mae MBS. On the other hand, the same loans accounted for 41.2 percent of insured loans in ... [ 1 chart ]

New foreclosure timeframes will become effective for all VA loan terminations completed on or after Jan. 4, 2016, according to a recent notice issued by the Department of Veterans Affairs. The notice provides a table of foreclosure timeframes – the number of calendar days required to complete a foreclosure – which the VA has determined to be reasonable and customary for all states. The timeframes are important in the calculation of the maximum interest payable on a foreclosure of a VA-guaranteed loan. The VA Home Loan Guaranty program offers a partial guaranty against loss to lenders who make home loans to veterans and active-duty military personnel. Agency regulations spell out the circumstances under which VA will pay loan-guaranty claims. Under VA rules, a guaranty claim can include unpaid interest for a period of up to 210 calendar days from the due date of the ...

State Mortgage Regulators Bring $10.2 Million Enforcement Action Against Prospect Mortgage. The Multi-State Mortgage Committee recently announced a $10.2 million settlement agreement and consent order between 50 state mortgage regulators and Prospect Mortgage over allegedly inappropriately assessed third-party settlement fees charged by an affiliate. According to the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, a multi-state examination performed by eight states revealed a pattern of charging improperly disclosed and unsupported fees paid to the company’s affiliate, C2C Appraisal Services. Under the terms of the agreement, Prospect is to pay restitution to every borrower in all participating states that was assessed a C2C Settlement Service Fee in the amount of $40 with interest of 10 ...

New York financial regulators have barred VA lender New Day Financial from doing any more business in the state for allegedly cheating on state-required continuing-education courses and examinations. The New York Department of Financial Services slapped the Fulton, MD-based lender (also doing business as New Day USA) with a $1 million fine and ordered it to surrender its mortgage banker’s license. The department accused top New Day executives as well as current and former employees of perpetrating an elaborate cheating scheme whereby compliance staffers took the required education courses and exams on behalf of senior managers and loan officers. According to state regulators, the cheating happened on numerous occasions and involved at least 20 New Day loan originators. The MLOs shared screen-shots of questions included in the National Multistate Licensing System and Registry (NMLSR) exams and ...