Servicers' partial waiver for face-to-face meetings nearing expiration
National Mortgage News
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A Federal Housing Administration requirement for servicers to make face-to-face contact with mortgage borrowers who are in default may be reimposed after its partial waiver due to the pandemic, which has been extended multiple times. At the time of this writing, it appeared the Department of Housing and Urban Development was maintaining a Dec. 31 expiration date for the temporary measure, which has allowed mortgage companies to use alternative methods for outreach like phone interviews, video calling or email. While some have debated whether the digital alternatives used during the pandemic would remove the need for manual processes, vendors who provide in-person outreach say servicers are still voluntarily using it for some tasks and they believe it's likely to persist in some form.
The current down cycle is making lenders re-evaluate their current and future tech investments and as a result, many initiatives have been set aside until the market recovers. One exception to that, however, is investment in automation, viewed by many lenders as a means of reducing costly manual work. Openbots, an end-to-end enterprise-grade robotic process automation platform, is one of the companies offering such services to numerous industries, including healthcare, insurance, banking and mortgage. The Edison, New Jersey-based company has raised about $20 million from private investors since its founding in 2020. And lately, they've been busy.? National Mortgage News sat down with Gabriel Skelton, director of banking, mortgage and insurance automation solutions at OpenBots, to discuss what automation products mortgage lenders are seeking, how the cyclical nature of the mortgage industry has impacted business, and why robots won't be (completely) replacing humans any time soon.
A Michigan lender is suing a competing mortgage firm for allegedly poaching over 30 employees over the past two years, causing it to close at least three of its Florida branches. Success Mortgage Partners accuses Stockton Mortgage Corp. of unlawful solicitation and theft of trade secrets from its operations in Georgia, Michigan and Florida, according to the complaint filed last week. A summons was issued Monday to the Frankfort, Kentucky-based Stockton for the case in the U.S. District Court for the Eastern District of Michigan. The poaching suit is the latest such case between competitors during a year of upheaval for mortgage professionals, and many of the complaints remain pending in federal courts.
The Federal Housing Administration has clarified restrictions it puts on the extent to which employees in single-family mortgage transactions can play dual roles and how they are compensated. Applying to four specific types of professionals, the clarification is effective immediately but the administration will also be accepting industry feedback on it for 30 days. Prohibitions on dual roles can complicate lenders' ongoing downsizing of personnel as originations and profitability wane, but they also help head off conflicts of interest for people with a role in loan approval, and potentially prevent collusion that can lead to costly fraud incidents.
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Almost two-thirds of new homes constructed are now located in community or homeowner's associations, according to recent analysis from the National Association of Home Builders. The share of single-family constructions started in 2021 in association developments decreased to 65.5% from 67.1% a year earlier, but the decade-long trend showed consistent upward movement. Yearly shares from 2020 and 2021 are the two highest since 2009 when the Census Bureau's Survey of Construction was redesigned. Last year's percentage reflected a total of 729,109 new-home starts, while 2020 saw construction beginning on 657,378 units. At the same time, sales of newly built properties within HOAs accounted for 82.4% of the overall market in 2021, increasing 2.7% from the prior year, the online resource iPropertyManagement.com found.?
In a False Claims Act whistleblower case that Trump Administration officials attempted to dismiss, Academy Mortgage agreed to pay $38.5 million to resolve allegations of improper origination and underwriting practices for Federal Housing Administration loans. The whistleblower, Gwen Thrower, will receive over $11.5 million of the settlement proceeds, with the government getting the rest, the Justice Department said. Thrower initiated the suit in 2016 under the qui tam provision of the False Claims Act. The federal government sought to dismiss this action in 2018, a time when former Department of Housing and Urban Development Secretary Ben Carson looked to dial back FCA enforcement. The government argued that no viable recovery existed, but the motion was rejected by both a trial judge in August 2018 and the Ninth Circuit Court of Appeals two years later.
A federal judge is poised to dismiss Guild Mortgage's poaching lawsuit against CrossCountry Mortgage over its alleged raid of Guild's Kirkland, Washington branch, according to a new filing. U.S. Magistrate Judge Michelle Peterson granted CCM's motion to toss the suit on a jurisdiction argument, she wrote in a filing dated Dec. 6. The recommendation, which includes two other orders in CCM's favor, will be ready for consideration by a District Judge Dec. 23 if no objections are filed by the parties. Guild sued CCM last October in the U.S. District Court for the Western District of Washington, accusing the Brecksville, Ohio-based lender of misappropriating the Seattle-area branch with over two dozen employees and massive amounts of confidential business and client information.
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