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Weekly Industry Monitoring Report

For the week of November 5, 2012

Compiled by Rick Grant & Associates




Industry News/Trends:


MBA Commends IRS on Electronic Signatures for Form 4506-T
The Mortgage Bankers Association commended an announcement by the Internal Revenue Service that it will soon begin allowing electronic signatures on Form 4506-T, Request for Transcript of Tax Return.


IRS 4506-T Set to Go Electronic by January 2013
Housing Wire (10/29/12) Mlynski, Christina
The Internal Revenue Service confirms that it will start accommodating electronic signatures on Form 4506-T, a common mortgage document, transitioning to an all-electronic format in January. Mandatory for most loan originations and modifications, the tax return transcript enables lenders to authenticate applicants' income reports. The Mortgage Bankers Association says the shift to paperless signatures will accelerate loan closings and workouts.

Fannie Mae Allows E-Signatures on REO Offers
Housing Wire (10/23/12)
Fannie Mae is allowing real estate professionals and home buyers to electronically sign offer documents on the REO homes it owns and markets, starting this week. Also, local Realtors may access Fannie Mae offer documents alongside the local sales contract in approved forms libraries available through their Multiple Listing Service and trade association. Fannie Mae says the changes will streamline the sales process for its HomePath properties and make it more user-friendly.


Legislative Update:


CFPB, FHFA to Create Groundbreaking Mortgage Database
American Banker (11/02/12) Davidson, Kate
A collaboration between the Consumer Financial Protection Bureau and the Federal Housing Finance Agency will produce a unique "mega-database" of mortgages that aims to streamline research and policy analysis and provide more comprehensive data for monitoring market trends. The database will include data such as borrower financial and credit profiles, loan terms, property information, ongoing payment history and more. While personally identifiable information will be omitted, regulators will be able to see a borrower's full debt burden, including car and student loans.


CFPB’s supervisory concerns carry warnings for financial institutions


A new CFPB report indicates the agency is finding some common problems at the mortgage, credit card and other financial services companies it supervises. What does this portend for your company? Read on for an in-depth look at the biggest issues the CFPB uncovered and how the bureau directed institutions to respond to those concerns.


CFPB releases exam manual version 2.0


The Consumer Financial Protection Bureau published an updated version of its Supervision and Examination Manual. The updated manual incorporates procedures released for such markets as mortgage origination and servicing, payday lending, consumer reporting and consumer debt collection. The agency also released its appeals policy for supervised entities. Read on for the details.





GSEs, HUD Announce Strategies To Aid Hurricane Victims

on 31 Oct 2012 by

The government-sponsored enterprises (GSEs) and the U.S. Department of Housing and Urban Development (HUD) have set up response strategies to aid homeowners that fell victim to the devastation created by Hurricane Sandy. Freddie Mac issued a statement that "strongly encourages servicers" to help hurricane-impacted borrowers with Freddie Mac-owned loans.



Mortgage Insurers Join GSEs in Effort to Shorten Short Sale Process

Fannie Mae and Freddie Mac servicers will be able to skip a step when attempting to get a short sale or deed-in-lieu of foreclosure approved. On Wednesday, the GSEs announced standard delegation agreements were reached with nine mortgage insurers to allow servicers to complete short sales and deeds-in-lieu without seeking approval from the mortgage insurer. The agreement takes effect November 1, along with additional short sale guidelines the GSEs announced in August


Freddie Mac holds 11% of delinquent mortgages

Freddie Mac holds only a small percentage of the nation's seriously delinquent loans, contributing only 11%. However, the GSE does own 22% of all outstanding first-lien home loans.





HUD Vows Foreclosure Relief in Wake of Storm Damage
New York Observer (11/01/12) Gaines, Carl
Heeding the president's directive to federal agencies to expedite relief for Americans impacted by Hurricane Sandy, HUD will offer mortgage protection and other aid in New York City. The measures include foreclosure forbearance on FHA-backed loans, 90-day foreclosure suspensions for other homeowners and FHA mortgage insurance through HUD's Section 203(h) program for people who must rebuild or purchase a new home due to storm damage.




Wells Says Government Wrong for Filing FHA Lawsuit
Wells Fargo & Co. is trying to convince a federal judge that a lawsuit alleging it disregarded requirements on loans insured by the Federal Housing Administration violates the terms of the massive mortgage servicer settlement reached earlier this year.


What We're Hearing: Will the FHA Need a Government Bailout?
By Paul Muolo

Congratulations, Mr. President. What's your position on bailing out the Federal Housing Administration fund?


FHA Said Setting Stage for Treasury Subsidy as Loan Losses Mount

The Federal Housing Administration, which guarantees 20% of all new mortgages, has raised premiums and tightened credit standards in an effort to avoid asking for a taxpayer subsidy.


Wells Fargo Sends Refund Offers to FHA Borrowers
By Kate Berry

A spokeswoman for Wells Fargo said the refunds were not prompted by any regulatory action -- nor are they related to a federal lawsuit filed early this month by the U.S. Attorney in New York.





HARP Productivity High
While banks haven't tightened lending requirements during the past six years on government-insured mortgages made to borrowers with moderate-to-high credit scores, the story is different for borrowers with lower scores. Banks see a high closing ratio for applications generated through the enhanced Home Affordable Refinance Program. Commercial mortgage lending showed signs of improvement.


Lenders Report High Pull-Through Rate on HARP Loans
By Brian Collins

At least 50% of large and small banks reported that applications for HARP loans comprised 10% to 50% of their refinancing applications in 3Q.