Category Archives: Lending

FHA publishes FAQ on second appraisal mandate for reverse mortgage loans

Reverse mortgage lenders must now submit appraisals to the Federal Housing Administration for a collateral risk assessment before endorsement – a new rule that went into play on October 1.

The guideline was issued late last month after FHA Commissioner Brian Montgomery said an assessment by the agency revealed a bias on 37% of HECM appraisals.

It’s only been in play for a few weeks and the industry continues to speculate just how impactful the mandate will be. In the meantime, FHA sought to clear up any confusion among lenders, recently publishing a list of FAQs in its online Support Center with details on the new guideline.

Among the questions the agency asks and answers: How can a lender obtain a copy of the collateral risk assessment performed on their appraisals?

The answer? They can’t.

“The collateral risk assessment is a proprietary FHA process,” FHA wrote. “Thus, mortgagees will not be able to obtain a copy of the assessment.”

FHA also confirmed that the cost of a second appraisal, if required, can be financed into a borrower’s closing costs, and that there is no additional fee for the risk assessment itself.

The agency’s FAQs drove home the point that it will not be giving anything away when it comes to the methods it will be using to determine if a property’s value has been inflated.

If you’re wondering why one appraisal was flagged while a similar file was not, FHA won’t shed any light on this for you, reasserting that its assessment is “proprietary” and stating that it “evaluates each HECM individually to determine if a second appraisal is required.”

And if you think you can jump the gun by ordering two appraisals off the bat, think again.

“The mortgagee must wait for the FHA collateral risk assessment to determine if a second appraisal is or is not required,” FHA wrote. “Mortgagee Letter 2018-06 does not allow for an exception to HUD’s requirements regarding ordering second appraisals and appraiser independence.”

While the FAQs reinforce HUD’s promised three-day window for reporting back to lenders to let them know if a second appraisal is required, the agency warns lenders not to assume that they can proceed with endorsement if they don’t hear back within this timeframe.

“A lack of timely response must not be construed to mean that a second appraisal is not required,” FHA wrote, asserting that lenders must wait to receive an email notification from the FHA Resource Center.  

But the process may soon speed up with the implementation of HUD’s automated system.

FHA said its fully automated system should be in place by Dec. 1, 2018, or even sooner, and that a notice will be posted on FHA Connection as soon as a transition date is known.

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FHFA releases plan to increase diversity and inclusion in housing finance

The Federal Housing Finance Agency Office of Minority and Women Inclusion released its plan Monday to expand diversity and inclusion over the next several years.

The FHFA explained it will place special emphasis on its second strategic goal: Ensure Liquidity, Stability, and Access in Housing Finance. The agency said its strategic goals and objectives will be achieved through the development of annual operational plans and measured through performance metrics.
The FHFA’s OMWI announced three strategic goals that it will focus on to increase diversity and inclusion from 2019 to 2021 and fulfill the FHFA’s goal to ensure liquidity, stability and access in housing finance.

Goal 1: Strengthen diversity and inclusion understanding to drive cultural awareness

Enhance the understanding of the OMWI and EEO missions and responsibilities in order to further develop cultural awareness, both within the Agency and for its regulated entities.

Goal 2: Meaningful diversity and inclusion communication

Engage stakeholders in the Agency’s diversity and inclusion mission and communicate the inherent benefits and opportunities in achieving the diversity and inclusion objectives.

Goal 3: Ensure OMWI organizational sustainability

Develop the strategic tools, policies, and services that support the long-term sustainability and effectiveness of the diversity and inclusion mission.

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FHFA Diversity and Inclusion

(Source: FHFA)

“The lasting effect of FHFA’s commitment to diversity and inclusion is its ability to empower a culture where DI is an intrinsic part of the organization,” the FHFA said in its release. “To do this, the agency must ensure that both the DI mission and its related responsibilities are well articulated, understood, and evaluated, both within the Agency and across the regulated entities.”

“This means identifying and evaluating efforts to implement DI and EEO requirements, conducting outreach on DI mission objectives, and providing tools that help employees apply the DI mission to their day-to-day lives,” the release continued.

The OMWI stated it intends on expanding the awareness its mission among its employees as it more clearly develops their roles and responsibilities in its mission objectives. It will increase awareness, in part, by developing more educational programs throughout the agency.

The OMWI explained communication is a crucial part to its plan to increase diversity and inclusion, saying it equips employees with the awareness, skills and tools that drive diversity and inclusion achievements.

“Communication is critical to creating lasting change – change that breaks down barriers and opens up an honest exchange about the value of a diverse workplace,” the office explained. “DI communication should help leaders understand the linkage between diversity and inclusion and business success, and it should help employees open a dialogue about what is important to them.”

But the OMWI pointed out that while the plan covers 2019 through 2021, it hopes to drive long-term success to the FHFA’s diversity and inclusion mission.

“To sustain its commitment, FHFA must build upon its strong DI foundation while continuing to evolve its functions, services, and structures,” it said. “This includes expanding DI programs, supporting OMWI organizational development efforts, and developing DI skills and expertise across the agency.”

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Women are not represented well in media, Geena Davis tells MBA Annual audience

Academy Award-winning actress Geena Davis delivered a hard truth for women during an address on Tuesday:

Women are not represented well in media.

In fact, women are underrepresented in media at a 3-to-1 ratio, according to research by Davis’ own organization, the Geena Davis Institute on Gender in Media.

Davis discussed female representation in media and answered audience questions during her hour-long keynote speech at the Mortgage Bankers Association’s mPower luncheon at its annual conference.

Davis’ nonprofit organization promotes reducing gender stereotyping and increasing female representation in media made for children age 11 and younger. The organization has done research on gender bias in media and advertising, as well female representation in different genres and areas in media. 

“Women and girls are half the population. Imagine how our world would be if we didn’t discriminate against women like this,” she said, adding that there is a need to dramatically improve female representation in media for children. 

“However abysmal the numbers are in real life, it’s far worse in fiction,” Davis told the audience, adding that if media added females characters at the pace it is now, parity will be reached in 700 years.

“In media, we are teaching and training that women and girls do not take up more than 50% of the world,” Davis said.

Davis told the audience that there are fewer great parts for women and that some roles are secondary to a main character and usually stereotypical, such as the girlfriend, wife or mother. 

“I’ve been lucky to have roles that resonated with me,” Davis said.

Davis reflected that the film that had most impact on her life was “Thelma and Louise,” which drove her commitment to exploring women in media. Davis spoke about how well written the screenplay and characters were and that she and others involved in the film’s production didn’t know the film would be received the way it did when it was released.

“None of us knew the nerve it would strike when it came out,” Davis told the group.

Davis explained that when she approaches a role, she asks herself, “What are the women in the audience going to think of my character?” and explained she didn’t mean the character as a role model, but as a character who speaks to women.

Davis was asked by an audience member how specific her organization’s research looks at diversity, particularly with female characters of color. Davis explained that the problem impacts women of color the most, as they are a group so small that they barely register when doing research.

Davis was also asked what the corporate world could mimic from Hollywood to change diversity and representation.

“You have to make very proactive, positive policies,” Davis explained. Giving the example of screenwriter and producer Ryan Murphy, who created the HALF Initiative, which aims to increase opportunities for women and minorities in film production.  

So, how did she get to creating a nonprofit that monitors and researches gender stereotyping in media?

When Davis’ daughter was young, she wanted to gather data on female representation among characters on children’s shows. She observed that this area of media was dominated by boys and male-driven roles.

“I didn’t intend for it to take over my life,” she told the crowd.

When exploring roles, Davis told the audience she would ask media executives, “Have you noticed how few female characters there are?” and explained to the crowd that the execs would always politely try to explain there was no gender inequality or “that they solved it” but it made her realize the creators don’t know the amount of disparity. She explained to the crowd she needed more data.

It took her whole life in a new direction. 

“The problem of unconscious gender bias is deeper than we ever imagined,” Davis said.

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