The Department of Housing and Urban Development has rolled out an automated lender monitoring system know as "Credit Watch" that will target problem Federal Housing Administration lenders."Credit Watch will identify lenders in the FHA program with problems and will allow us to remove the worst performers -- in the same way a school can expel a student who flunks out," HUD Secretary Andrew Cuomo said. Credit Watch focuses on FHA lender branch offices, which are originating loans with high default and claim rates during the first 24 months of the loan's life. Branch offices with default and claim rates three times the area average will be notified of their termination and right to appeal. Twenty to 30 lenders are expected to receive the first termination letters in June. Lenders with default and claims rates about two times the norm will be placed on Credit Watch and under probation for 18 months. These lenders can still originate loans, but they will be closely monitored. "HUD is doing what it needs to do in order to police the quality of loans that it insures," said Steve O'Connor, senior director for residential finance at the Mortgage Bankers Association of America. HUD's website address is http://www.hud.gov.
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Nonbanks with servicing portfolios saw earnings dip, while expenses for most shot up in anticipation of more origination volume.
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The Great Financial Crisis changed not only how Luxury Mortgage operated, but what its name stands for, shifting from the high-end of the market, founder David Adamo said.
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Rejections for mortgage credit outpaced almost every other borrowing category, according to the Federal Reserve Bank of New York.
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Consumer Financial Protection Bureau Director Rohit Chopra said the FICO credit-scoring model has drawbacks in price, predictiveness and market competition, and stakeholders should develop a more open-sourced model that uses artificial intelligence.
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Smaller players face challenges when it comes to mortgage servicing rights, and larger ones have varying motivations, experts at an industry meeting say.
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The 30-year fixed rate mortgage average resumed its climb that started in September, as the benchmark 10-year Treasury price still reflects views on inflation.
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