Archive for the 'Legislation' Category
FHA Extends Waiver on House Flipping Rules
December 29th, 2011
Written by Frost Mortgage
WASHINGTON (CN) – The Federal Housing Administration will extend a waiver on its anti-flipping regulations until Dec. 31, 2012.
”This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” said Acting FHA Commissioner Carol J. Galante.
Under regulations adopted in 2003 the FHA does not insure mortgages on houses sold within 90 days of the re-seller’s acquisition, unless that seller meets certain exemptions such as being a government-sponsored entity or nonprofit organization approved to purchase homes owned by the Department of Housing and Urban Development.
The FHA said it adopted those regulations to protect consumers against collusion by mortgage lenders and appraisers to inflate the price of properties to which a speculative buyer has made only superficial improvements, if any.
Since the original waiver took effect in February 2010, the FHA said, it has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.
The FHA said it had research showing that the regulations discouraged sellers from accepting FHA-backed buyers at a time when it needs to do everything possible to promote recovery in the housing market.
By TRAVIS SANFORD
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Senate Backs Plan to Help Americans Buy Homes
October 21st, 2011
Written by Frost Mortgage
The Senate voted 60-38 to continue to allow the government to buy or insure home loans for as much as $729,500 in expensive housing markets. The higher conforming loan limit lapsed at the end of September, falling back to $625,500, but most senators believe the lower ceiling would make it more difficult for people to buy homes and would further weaken the housing market. The proposal will be attached to a spending bill that the chamber will consider later this year.
Reuters (10/21/11) Younglai, Rachelle
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Without Loan Giants, 30-Year Mortgage May Fade Away
March 4th, 2011
Written by Frost Mortgage
If Washington winds down Fannie Mae and Freddie Mac, experts say the 30-year fixed mortgage could morph into a luxury product as interest rises and lenders begin to charge for formerly free features, like the ability to lock in a low rate. Because lenders cannot raise money for loans without government guarantees, the two government-sponsored enterprises and other federal programs now support about 90 percent of new mortgages. A phaseout is not likely in the immediate future, as Congress must agree on a plan and then the market must be weaned slowly from its dependence on the two GSEs.
New York Times (03/04/11) Appelbaum, Binyamin
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Fed Abandons Proposed TILA Rules
February 4th, 2011
Written by Frost Mortgage
| Finalization of new Truth-in-Lending-Act rules by the Federal Reserve will likely be abandoned — a move mortgage bankers have been lobbying for.A statement Tuesday indicated the Federal Reserve Board does not expect to finalize three pending rulemakings under Regulation Z, which implements TILA, before Reg Z rulemaking authority is passed on to the Consumer Financial Protection Bureau in July.
The Fed published proposed two rules in August 2009 that would have reformed TILA disclosures for closed-end mortgages and home-equity lines of credit. A September 2010 proposal changed disclosures for reverse mortgages and right-of-rescission notices. The proposal also included new disclosures for loan modifications, restrictions on advertising practices and reverse-mortgage sales practices. In addition, changes to mortgage servicer obligations were proposed. The Fed explained that the public benefit would be questionable in its proceeding with the rulemaking given that the CFPB would be responsible for combining RESPA and TILA disclosures leading to further revisions. It is also possible, the Fed went on, that the consumer regulator could issue a new rule before the deadline. The Fed said that adopting in “a piecemeal fashion” the TILA provisions which would carry on after authority is transferred to the CFPA would make it more difficult to be compliant. The Mortgage Bankers Association called the Fed’s decision “wholly appropriate.”
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| Feb. 2, 2011By MortgageDaily.com staff |
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FHA extends ‘anti-flipping’ waiver
February 1st, 2011
Written by Frost Mortgage
Agency study: property-flip loans do not pose excessive credit risk
Homebuyers relying on FHA-insured financing will still be able to buy homes that have changed hands in the last 90 days, thanks to a decision by the Federal Housing Administration to extend a temporary waiver of its “anti-flipping” rule through the end of the year.
The anti-flipping rule — a 90-day waiting period implemented in 2003 to protect the FHA’s mortgage insurance program from losses — already included an exemption for homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions.
By Inman News, Monday, January 31, 2011.
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ARM, Reverse Rules Released
August 18th, 2010
Written by Frost Mortgage
| WASHINGTON — In just a few months, mortgage lenders will be required to provide new disclosures for adjustable-rate mortgages. New disclosure requirements for reverse mortgages are also on the horizon.
The Federal Reserve on Monday issued a package of rules and proposals for mortgages, including a measure that would require lenders to disclose to borrowers how their mortgage payments can change over time. The provision, which is an interim rule that would take effect on Jan. 30, 2011, seeks to make sure borrowers are alerted to the risks of payment increases before they take out mortgage loans with variable rates or payments, such as ARMs. Based on the measure, lenders would need to provide details to borrowers about what the maximum interest rate and payment they would need to make during the first five years of their adjustable-rate mortgage, as well as a “worst case” example showing what the maximum rate and payment they could be required to pay. Lenders also would need to explain to borrowers that they can’t avoid increases in payments by refinancing their loans, according to the provision.In addition, the Fed proposed new consumer-protection regulations to improve the disclosures consumers receive for reverse mortgages and to make sure that consumers receive new disclosures when they agree with their lender to modify key terms of a closed-end mortgage. A reverse mortgage is a type of loan that is designed for senior citizens to give them access to the home’s equity in cash payments and to free up money they can use for other purposes. A closed-end mortgage is one where repayment cannot be made prior to the loan’s maturity, and terms prohibit the consumer from borrowing an additional amount against the mortgaged asset without first paying off the current loan. Based on the proposal, the Fed is seeking to prohibit creditors from conditioning a reverse mortgage on the consumer’s purchase of another financial or insurance product. Consumers also would have to receive independent counseling about costs and benefits of reverse mortgages before a creditor can impose a non-refundable fee, and they need to receive final disclosures about the mortgage three days before closing the loan. For closed-end loans, the new proposal would ensure that prospective borrowers have time to review their loan disclosures before they pay any fees. Lenders would be required to refund the fees if consumers decide to withdraw the application within three days of receiving disclosures. The central bank also announced it has adopted final rules to ensure that borrowers receive a notice when their mortgage loan has been sold or transferred. The new disclosure requirement has been effective since May 2009, when the Fed published interim rules based on the Helping Families Save Their Homes Act. Moreover, the agency adopted final rules seeking to protect mortgage borrowers from deceptive lending practices. For example, the rule prohibits a loan originator that receives compensation from the consumer to also receive compensation from a lender or another group. Paul Leonard, vice president of government affairs at the Financial Services Roundtable, an industry group, said he supported giving ARM borrowers additional disclosures. However, he raised concerns about differences that exist between the disclosure rules required by the Fed and those instituted by the U.S. Department of Housing and Urban Development. “We think it’s a good idea that borrowers should know what the potential change is to their adjustable loan,” Leonard said. “We just would like to see a single set of disclosure that meets both the Fed’s Truth in Lending Act rules and Department of Housing and Urban Development real estate settlement rules.” |
By RONALD D. OROL MarketWatch
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New HUD Protocol Offers Older Adults More Information and Deeper Financial Assessment, Using Tools and Materials Developed by NCOA
August 5th, 2010
Written by Frost Mortgage
WASHINGTON, Aug. 4 /PRNewswire-USNewswire/ — The U.S. Department of Housing and Urban Development (HUD) now requires all HUD-approved reverse mortgage counselors to provide their clients with the National Council on Aging’s (NCOA) 28-page consumer booklet on reverse mortgages. In addition, counselors must complete an extra level of financial assessment to help prospective borrowers gain a greater understanding of financial risk and other factors that may impact their loan.
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Dodd-Frank Wall Street Reform passes Senate and heads to White House
July 15th, 2010
Written by Frost Mortgage
“The U.S. Senate has announced the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173) by a vote of 60-39. The 2,300-plus-page bill, HR 4173, is intended to address the problems that led to our nation’s economic collapse, will add new regulators to analyze any potential economic crisis situations in the future; create a federal bureau in charge of consumer protection; and adopt new regulations designed to end the practices that contributed to the American economic downturn.”
http://nationalmortgageprofessional.com/
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Regulatory Reform Set to Clear Senate
July 15th, 2010
Written by Frost Mortgage
As National Mortgage news online reports www.nationalmortgagenews.com The Senate Thursday morning voted 60-38 to break a filibuster on the Dodd-Frank Wall Street Reform bill, clearing the way for final passage in the afternoon. Senate majority leader Harry Reid said the landmark financial services regulatory reform bill will help restore trust in the U.S. financial system. “We’re going to give consumers and investors the strongest protections they’ve ever had against abusive banks, mortgage companies, credit card companies and credit-rating agencies,” Reid said. Financial Services Roundtable president and chief executive Steve Bartlett said there are parts of the bill the banking industry likes, but noted that some sections are problematic. “The bottom line is this: the Dodd-Frank bill soon will be the law of the land. As an industry, we will make it work—working closely with regulators, who will implement the new law—in the best interests of the American people and the economy,” Bartlett said in a speech at the National Press Club.
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Great news for FHA lenders from Congress
June 29th, 2010
Written by Frost Mortgage
Federal Housing Administration (FHA) lenders will be exempted from new “risk retention” rules, which is great news for companies who issue loans insured by the government.
National Mortgage News reports that
[t]he legislation finalized by the conference committee late last week would require originators to retain at least 5% of the credit risk in loans they securitize unless the assets meet a “qualified mortgage” test. All loans backed by the FHA, the Department of Veterans Affairs or the Rural Housing Service will automatically meet that test.
This is a complex time to be in the FHA-backed mortgage business, but the opportunities are huge for those who are eager to learn to succeed as branch partners or loan officers.
Frost Mortgage has been a leader in FHA lending since 1991. If you’re looking to step up, take a look at our mortgage partner offering–we think you’ll find it’s the best in the business.
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