First Tennessee Bank will end up paying $212.5 million to settle allegations that they originated and delivered FHA insured loans that did not meet FHA eligibility (Fined). The settlement was brought about by an action by HUD and DOJ against First Tennessee under the False Claims Act. Interestingly, First Tennessee admitted that they had knowingly certified loans for the FHA…
New CFPB Settlement Cost Booklet
As part of the upcoming TRID changes, when providing a consumer with the new Loan Estimate a Broker, Bank or Lender must also provide a new settlement information booklet known as “Your home loan toolkit” (Toolkit). CFPB has updated the Settlement Cost Booklet to provide a consumer with more information to help them make better choices about their mortgage, with…
What are you certifying on an FHA Loan Transaction? Are you aware of the False Claims Act?
Attention: Lenders, FHA Borrowers, and DE Underwriters Much publicity has been generated recently on several major lawsuits filed by the Department of Justice (DOJ) based on allegations that certain lenders violated the False Claims Act by knowingly submitting improperly underwritten loans to HUD/FHA for mortgage insurance. The most recent case involves Quicken Loans who has decided to sue DOJ and…
Consumer Financial Protection Bureau: “Sensitive” on TRID
Is it a grace period or not? That is the big question surrounding the very recent CFPB letter on post TRID implementation enforcement actions. Although CFPB has announced it will be sensitive to lenders that make a “good faith” effort to comply with the new rules, they do not go as far as to say there will be no enforcement…
Lender Held Accountable for Broker’s Conduct
Provident Funding Associates, a major California-based wholesale lender, recently settled with the Consumer Financial Protection Bureau and the Department of Justice to the tune of $9 million. The settlement was not for any violations made by Provident, but for lending discrimination by Brokers who originated loans for Provident. The discrimination came about in the form of higher rates being charged to…
Top Ten List of Concerns with Federal Housing Administration’s Draft Handbook 4000.1
In honor of David Letterman’s recent departure from television, I have compiled a Top Ten list of concerning policies in HUD/FHA’s draft 4000.1 Handbook. Number 10: The Mortgagee must re-verify, in writing or electronically if available, employment, income, assets, gift funds, source of funds and mortgage or rental payments as part of a pre-closing (or pre-funding) review. (Page 506) Although…