Tag Archives: FHA

United Shore lands on DOJ hit list, will pay $48m for FHA lending violations

United Shore Financial Services will pay $48 million to settle allegations brought by the Department of Justice, which accused United Shore of violating the False Claims Act by “knowingly originating and underwriting” mortgages that did not meetFederal Housing Administration standards, the DOJ announced Wednesday.

The settlement makes United Shore just the latest in a long line of mortgage lenders that settled with the DOJ over alleged FHA lending violations.

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DOJ nails two more lenders for FHA violations

Primary Residential Mortgage Inc. and SecurityNational Mortgage Companyannounced separate agreements with the United States Department of Justice on behalf of the Department of Housing and Urban Development to pay $5 million and $4.25 million, respectively, to resolve allegations that they violated the False Claims Act.

According to the DOJ, both lenders allegedly violated the False Claims Act by “knowingly originating and underwriting mortgage loans insured by HUD’s Federal Housing Administration that did not meet applicable requirements.”

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BB&T to pay $83 million for FHA lending violations

Branch, Banking & Trust Company (known more commonly as BB&T) will pay $83 million to settle allegations brought by the Department of Justice, which accused the lender of violating the False Claims Act by falsely certifying that it complied with “critical underwriting and quality control requirements” on mortgages insured by theFederal Housing Administration.

BB&T becomes the latest in a long string of lenders targeted by the DOJ for False Claims Act violations. The False Claims is designed to prosecute vendors the government feels fraudulently represented themselves while doing business with the nation.

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EXCLUSIVE: Security vulnerabilities discovered in FHA systems

Some of the systems used by the Federal Housing Administration’s single-family insurance program are vulnerable to security breaches, an investigation by the agency’s watchdog uncovered recently.

Details on the nature of the “vulnerabilities” are limited at this point; the Office of the Inspector General for the Department of Housing and Urban Development chose not to share the full results of its investigation with the public.

The only mention is a short description of the investigation and its methods posted on the OIG website.

Specifically, the HUD-OIG stated in the brief recap of its investigation that it “reviewed the general and application controls over the FHA’s Single Family Insurance System and Single Family Insurance Claims Subsystem as part of the internal control assessments required for the fiscal year 2015 financial statement audit under the Chief Financial Officer’s Act of 1990.”

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HUD mortgage sales harm black neighborhoods, lawsuit says

New lawsuit follows Center for Public Integrity report on mortgage sales

New York City homeowners filed a class action lawsuit on August 12 alleging that auctions of government-insured mortgages discriminate against predominately African-American neighborhoods.

The lawsuit involves a U.S. Department of Housing and Urban Development (HUD) program that since 2010 has auctioned delinquent mortgages insured by HUD’s Federal Housing Administration (FHA).

The program, the lawsuit states, strips homeowners of FHA protections without first informing them that their mortgage could be sold.

The Center for Public Integrity first investigated the HUD program in 2015, finding that the mortgages were sold at a steep discount and only 16.9 percent of mortgages sold between 2010 and 2014 successfully avoided foreclosure.

As part of that investigation, the Center for Public Integrity mapped the results of HUD’s auctions in New York City and Baltimore. The map showed that the mortgages clustered in neighborhoods with a higher proportion of minorities.

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Condo legislation finally a law

Housingwire:

H.R. 3700, the “Housing Opportunity Through Modernization Act,” finally finished the legislation process. President Obama signed the housing legislation into law on Friday, which, according to the National Association of Realtors, “will dramatically improve long-fought restrictions on Federal Housing Administration financing for condominiums.”

In light of the news, NAR President Tom Salomone said, “Realtors have reason to celebrate today as legislation easing restrictions on Federal Housing Administration financing for condominiums is finally signed into law. This is a long-awaited victory for NAR and for homebuyers for whom condos are an important and affordable option.”

The U.S. Senate passed H.R. 3700 on July 15 after the bill passed in the House of Representatives by a unanimous vote back in February.

The new changes will make the FHA’s recertification process much easier and will lower the FHA’s current owner-occupancy requirement from 50% to 35%.

The bill also requires FHA to replace existing policy on transfer fees with the less-restrictive model already in place at the Federal Housing Finance Agency.

The FHA’s current restrictions on condominium financing present a significant hurdle for one of America’s most affordable options, according to testimony given on Capitol Hill in 2015 by then NAR President Chris Polychron.

Republican party platform contains winding down Fannie, Freddie and reducing size of FHA

Housingwire:

One of the biggest events this week will be the Republican National Convention in Cleveland, Ohio. The Republican party platform contains specific recommendations for housing, including winding down Fannie Mae and Freddie Mac and reducing the size of the Federal Housing Administration, but it remains to be seen what actually gets talked about at the convention, much less enacted should the Republicans win the presidency.