The Department of Housing and Urban Development is sticking to its guns regarding downpayment assistance on Federal Housing Administration-insured mortgages.Despite some congressional opposition, not to mention cries of foul from DPA providers, the agency will publish a controversial final rule Oct. 1 that will bar anyone who has a financial stake in the transaction from providing buyers with cash for a downpayment, even if they give the money to third-party nonprofit organizations that funnel it to buyers. The House recently passed an FHA reform bill that would set new standards for DPA, including a requirement that nonprofits have a net worth of at least $4 million. But the Senate Finance Committee's version of the reform package prohibits DPA. Sources at HUD, who used the term "collusion" and maintained that the funds are not really a gift because sellers tack on the amount to their asking price, said "we are putting out a final rule that would no longer permit seller-financed downpayment assistance for FHA loans." The agency says the default rate of these loans is almost three times that of other FHA loans. Last year, the Internal Revenue Service ruled that the "self-serving, circular financing arrangements" HUD is trying to stop are not charitable operations.
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Doxo plans to fight the FTC complaint, which focuses broadly on consumer finance, but there are signs of confusion about the company's role in mortgages too.
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Members of the LGBTQ community were most likely to have experienced housing bias, according to a Zillow survey, which also found many people don't recognize how fair lending laws could help.
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Senior executives making over $151,000 would still be subject to such clauses should the rule go into effect this year.
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Christopher J. Gallo and his aide, Mehmet A. Elmas, allegedly withheld information in mortgage applications, hiding that borrowers were purchasing second home properties.
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Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
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Independent mortgage bankers lost the most money ever on every loan originated last year due to higher rates and lower volumes, an industry trade group said.
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