• 0
  • Home
  • About Us
  • What We Do

Shopping Cart

GPAM
  • Home
  • About Us
  • What We Do

HUD wants to jumpstart bank lending on low-income homes

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)
Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

Housing and Urban Development Secretary Ben Carson wants to get banks back in the residential mortgage lending game.

One way the agency will do this is by seeking to change the way it handles the False Claims Act. HUD will now enforce Federal Housing Administration violations through “administrative” proceedings, following an agreement with the Justice Department. The move, however, could be seen as a soft approach to banks that violate federal regulations.

Since the last recession — and as federal regulations have increased — banks have pulled back on mortgages originations, allowing nonbanks like Quicken Loans and loanDepot to fill the void. Concerns are growing about nonbanks, because they aren’t subject to the same stringent regulations, and are more vulnerable to failure during a downturn.

Now, HUD wants to encourage banks to originate more FHA loans, which are generally made to low-income borrowers and first-time homebuyers. The move was announced in a joint statement from HUD and the Department of Justice.

The move is geared to reduce bank fines for minor infractions associated with FHA mortgages, Carson told Yahoo Finance.

During the Obama administration, the government used the False Claims Act to levy millions of dollars of fines on the largest financial institutions such as Bank of America, JPMorgan Chase and a $1.2 billion fine against Wells Fargo in 2016.

Banks cite the False Claims Act as a reason that they have retreated from mortgage lending.

Carson maintained that the new agreement will not reduce the agency’s focus on deterring FHA mortgage fraud.

“HUD will not tolerate irresponsible or fraudulent lenders who defraud borrowers and taxpayers,” Carson said in the joint statement.

Today, depository institutions originate less than 14 percent of FHA-insured mortgages, which is down from about 45 percent in 2010, according to HUD. The largest bank in South Florida by assets, Miami Lakes-based BankUnited, stopped originating residential mortgages altogether.

But in addition to increased regulation, some banks such as BankUnited said they backed away from making these loans because it is a low-margin business.

Overall mortgage lending has increased in recent months due to lower rates. Lenders issued the most mortgages in 14 years last quarter, providing $700 billion of home loans to borrowers in the third quarter, according to Inside Mortgage Finance, the Wall Street Journal reported.

Carson, who spoke at The Real Deal’s Miami Showcase and Forum this month, has also gotten HUD more involved in Opportunity Zone investment. He said the agency will give preference to developers and investors who build affordable housing in federal Opportunity Zones when it comes to certain grants.

The post HUD wants to jumpstart bank lending on low-income homes appeared first on The Real Deal Los Angeles.

Powered by WPeMatico

  • 29 October 2019
  • The Real Deal
  • Uncategorized
  •  Like
Greater LA retail market struggles to recover from big box closures, bankruptcies →← Hines, JPMorgan asset arm nab $1.2B refi on Century City office twin towers
  • Recent Posts

    • LA County greenlights self-certification for Altadena rebuilding May 8, 2025
    • Irvine Company aims to transform golf course into village of 3K homes May 8, 2025
    • Former LA police commissioner, prominent attorney to list Bel-Air estate for $24M May 8, 2025
    • Movers: Gambino Group nabs LA, NY agents May 8, 2025
    • Sacramento investor lists 270K sf DTLA office park leasehold May 8, 2025
  • Recent Comments

    • Archives

      • May 2025
      • April 2025
      • March 2025
      • February 2025
      • January 2025
      • December 2024
      • November 2024
      • October 2024
      • September 2024
      • August 2024
      • July 2024
      • June 2024
      • May 2024
      • April 2024
      • March 2024
      • February 2024
      • January 2024
      • December 2023
      • February 2023
      • January 2023
      • December 2022
      • November 2022
      • October 2022
      • September 2022
      • August 2022
      • July 2022
      • June 2022
      • May 2022
      • April 2022
      • March 2022
      • February 2022
      • January 2022
      • December 2021
      • November 2021
      • October 2021
      • September 2021
      • August 2021
      • July 2021
      • June 2021
      • May 2021
      • April 2021
      • March 2021
      • February 2021
      • January 2021
      • December 2020
      • November 2020
      • October 2020
      • September 2020
      • August 2020
      • July 2020
      • June 2020
      • May 2020
      • April 2020
      • March 2020
      • February 2020
      • January 2020
      • December 2019
      • November 2019
      • October 2019
      • September 2019
      • August 2019
      • July 2019
      • June 2019
      • May 2019
      • April 2019
      • March 2019
      • February 2019
      • January 2019
      • December 2018
      • November 2018
      • October 2018
      • September 2018
      • August 2018
      • July 2018
      • June 2018
      • May 2018
      • April 2018
      • March 2018
      • February 2018
      • January 2018
      • December 2017
    • Global Property and Asset Mangement, Inc.
      137 North Larchmont
      Los Angeles, California 90010
      +1 213-427-1127

    © 2025 GPAM