Compliance & Regulation

WASHINGTON—Two Houston mortgage firms with common ownership have agreed to pay $84,000 in separate settlements with the HUD Mortgagee Review Board.A mortgage brokerage firm with 200 branches nationwide, Allied Home Mortgage Capital Corp., agreed to pay a $38,000 fine to settle allegations that it violated branching rules mandated by the Federal Housing Administration.

Fears of undetected financial reporting fraud feeding into “foreclosure-gate”-type concerns are bringing together insiders worried about their industry’s future.

Robo-signers and foreclosure mills perpetrating fraud on the courts. Bond investors questioning the contents of mortgage-backed security trusts. Challenges to banks' legal standing. These problems, once viewed as isolated or inconsequential, have been conflated into a monster supposedly capable of paralyzing foreclosures and obscuring the rightful ownership of real estate nationwide.

The Mortgage Bankers Association has declared that the "punitive" penalties the Department of Housing and Urban Development charges servicers for failing to initiate foreclosures on a timely basis are "arbitrary in their severity" and need to be changed.

Mortgagees will be able to view sponsored originator performance information in Neighborhood Watch. On a monthly basis, FHA will aggregate sponsored originator performance for a rolling two year period. A link to the sponsored originator performance will be added under the Early Warnings menu selection.

Federal Reserve chairman Ben Bernanke said the central bank is "looking intensively" at the foreclosure and servicing practices of the nation's largest banks to see if these institutions are improperly taking homes.

All 50 states are now on the Nationwide Mortgage Licensing System and Registry, with Hawaii becoming the last state to join this week.

The Rural Housing Service is preparing to start guaranteeing single-family loans again, and sources expect the agency to make an announcement next week.

Sb1 Federal Credit Union of Philadelphia is still trying to find out how to identity thieves were able to tap into a customer's home equity line of credit, steal his private information – including passwords – and convince the credit union to wire $220,000 from the HELOC to an unrelated account in Hong Kong.

With Fannie Mae suing insurance carriers over coverage for the $140 million fraud at U.S. Mortgage/CU National Mortgage, credit unions victimized in the scandal are wondering whether any recovered funds will be used to compensate them for their losses.