AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
A Warning About Need For Due Diligence.(Federal Housing Administration loans)
John Weicher, assistant secretary for housing and federal housing commissioner, recently sent out a Mortgagee Letter to servicers of Federal Housing Administration loans advising them about how to avoid acquiring "predatory loans" in the secondary market. With the debate about "predatory lending" migrating to the loan servicing side of the business, excerpts from the assistant secretary's letter might offer some prescient advice for all lenders. The Mortgagee Letter was number 2002-21.
In recent months, national attention has been drawn to the devastating impact of predatory lending on families who are victimized by a few unscrupulous sellers, appraisers, real estate agents, mortgage originators and investors. The department believes that no responsible FHA-approved mortgagee would knowingly purchase fraudulently originated loans. Effective due diligence policies, uniformly applied by mortgagees prior to purchase, would cripple the ability of fraudulent lenders to pawn predatory loans off on others in the mortgage industry. If predatory loans cannot be sold, they are unlikely to be made and all borrowers, including FHA borrowers, will be protected.
The department routinely solicits feedback from lenders regarding the need for clarification of servicing requirements during various industry forums such as servicing conferences. As a result of the national attention on predatory lending, recent industry discussions focused on predatory lending practices and due diligence in the purchase of FHA insured loans. As a follow up to those discussions, several FHA-approved lenders that regularly buy and sell loans provided examples of the quality control procedures used by their firms to review both underwriting and servicing aspects of loan purchase transactions.
Due to the importance of this matter, the department is considering amending its regulations to require prepurchase quality control reviews. Until such regulations are issued, the department will publicize through Mortgagee Letters prudent practices currently being used by the industry.
As such, this letter is the first in a series of Mortgagee Letters on prudent due diligence. Because of its focus on predatory lending, this letter concentrates on due diligence reviews of how loans were originated and underwritten. Future Mortgagee Letters will focus on related matters ...
- OTS Examines Predatory Practices.(Office of Thrift Supervision investigates...
- Magazine article from: National Mortgage News BAILEY, DAWN April 10, 2000 700+ words
...Reserve Board to address predatory lending issues. When the task...that OTS is developing due diligence standards for wholesalers...not aiding and abetting predatory lending. OTS is working on due diligence standards with Lehman...
- HUD Moves to Protect Baltimore Homebuyers; Turns City Into Predatory Lending...
- Press release article from: PR Newswire February 19, 2002 700+ words
...aggressive crackdown on predatory lending. HUD's stepped...2001. "HUD's predatory lending initiatives are...consumer education on predatory lending. * Leading industry...best practices in due diligence prior to loan...
- ComplianceEase Offers Predatory Lending Compliance Certification for Wall...
- Press release article from: Business Wire June 20, 2003 700+ words
...state and local "predatory lending" laws, Wall...and additional due diligence in connection...of traditional due diligence methods. Moreover...with all current predatory lending laws, rules...the necessary due diligence must be accomplished...expert on ...
- First American Partners With Bohan Group to Bring Faster, More Advanced Due...
- Press release article from: PR Newswire January 30, 2006 700+ words
...compliance risk and assist due diligence analysts with advanced...include residential due diligence, fulfillment center...compliance reviews, predatory lending audits, post-close...manner. The firm's due diligence expertise extends...
- Consumer Protection: Federal and State Agencies Face Challenges in Combating...
- General Accounting Office Reports & Testimony March 1, 2004 700+ words
...definition, the term "predatory lending" is used to characterize...effectiveness in reducing predatory lending. A variety of factors...but may facilitate predatory lending by allowing unscrupulous...varying degrees of "due diligence" to screen out...
- Preserving economics amid predatory lending risk.
- Newspaper article from: Asset Securitization Report Sibayan, Karen November 17, 2003 700+ words
...levels related to predatory-lending legislation risk...detailed analysis of predatory lending. The enhanced review...investigated originator due diligence practices through...compliance with predatory-lending legislation without...
- Predatory Lending Laws Adding to the Cost of Regulatory Compliance.
- Magazine article from: National Mortgage News Sinnock, Bonnie May 12, 2003 700+ words
...vice president at due diligence firm Clayton told...addressing the top of predatory lending issues in the residential...specializes in conducting due diligence reviews and works...and local anti-predatory lending rules. But as far...
- 'Predatory Lending Prevention Helpful in Stopping Fraud'.
- News wire article from: Mortgage Line Dymi, Amilda May 28, 2004 700+ words
...cost lending and predatory lending, although most lenders do not do predatory lending," Mr. Ogrodski noted...players to perform due diligence on the loan that they...levels, and related predatory lending implications. "Typically...
Source: HighBeam Research, A Warning About Need For Due Diligence.(Federal Housing...