Justice Dept. Settlements Put FHA Lenders on Notice


Two recent Justice Department settlements, one with a large nonbank mortgage lender and the other with a small one, speak volumes about how much Federal Housing Administration lending has changed.

Franklin American Mortgage in Franklin, Tenn., on Wednesday agreed to pay $70 million for knowingly originating home loans that did not meet the guidelines of the Department of Housing and Urban Development, which oversees the FHA. A day earlier a much smaller lender, RanLife in Salt Lake City, agreed to pay $1 million for underwriting loans that failed to comply with HUD’s regulations.

Those dollar figures might seem like peanuts compared with bank settlements in the hundreds of millions or more. But more of the FHA market is shifting to nonbanks, and the cases highlight nonbank lenders’ tendency to under-report deficiencies and their other shortcomings. Moreover, the cases underscore the reason why big banks have backed away from […]

Fannie, Freddie Loan Limits to Rise in 39 High-Cost Counties

The Federal Housing Finance Agency said Wednesday that conforming loan limits for mortgages purchased by Fannie Mae and Freddie Mac will remain at existing levels except in 39 high-cost counties.

The current loan limits are $417,000 nationwide and $625,000 in high-cost areas. The limits will rise in 2016 in 11 counties in Colorado, five in Massachusetts, two in New Hampshire, four in California, 14 in Tennessee and three in Washington.

In California, Napa County’s loan limits will be the highest in 2016 at $625,500, followed by San Diego County at $580,750 and Sonoma County at $554,300. Colorado will see the highest increases in 2016, up $34,500 to $458,850 in 11 counties including Denver and Boulder.

The FHFA, the regulator of Fannie, Freddie and 11 Federal Home Loan Banks, sets higher loan limits in high-cost counties as a function of […]

U.S. existing home sales plunge; new rules seen as drag

U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy although new regulations on paperwork for home purchases may have driven the decline.
The National Association of Realtors said on Tuesday existing home sales plunged 10.5 percent to an annual rate of4.76 million units. That was the sharpest decline since July 2010. October’s sales pace was revised slightly lower to 5.32 million units.
Housing has been providing a sizable boost to U.S. economic growth this year as a strengthening labor market and low interest rates have helped young adults to leave their parents’ homes.
Economists had forecast sales rising to a rate of 5.35 million units last month.

NAR economist Lawrence Yun said most of November’s decline was likely due to regulations that came into effect in October […]

What Banks Need to Know About Speaker Paul Ryan


Rep. Paul Ryan’s expected rise to House Speaker this week may ultimately prove a boon for the banking industry – especially for critics of the Dodd-Frank Act and the current mortgage finance system.

The Wisconsin Republican, the former vice presidential candidate to Mitt Romney and a longtime member of the House, agreed to take the role of Speaker last week, likely providing some needed stability after weeks of surprises for the Republican party.

Speaker John Boehner announced last month that he would leave Congress and make way for a new leader. His would-be successor, Majority Leader Kevin McCarthy, then abruptly backed out of the race for the top job.

Though Ryan was at first hesitant to step up, he’s seen by many as a central player to help mend the fractured Republican Party.

Below we answer some frequently asked questions about Ryan and what his impact will […]