FHA increases multifamily large loan threshold

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1. FHA increases multifamily large loan threshold

The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-14 last week, which increases the threshold from $75 million to $120 million for multifamily loans to be considered large loans.

This change, the first significant increase since 2014, aims to allow more transactions to utilize standard underwriting processes when submitted for FHA Multifamily insurance. The FHA also plans to annually review this threshold.

“We know that borrowers are contending with the dual challenges of increased development costs and meeting the nation’s dire need for more rental housing,” said FHA Commissioner Julia Gordon. “Anything we can do to prudently alleviate extra steps in obtaining FHA insurance will help all of us meet the housing supply challenges before us.”

2. Wells Fargo staffers claim anti-Latino bias in lawsuit

Wells Fargo has been sued by current and former members of its bilingual mortgage sales team who claim the company discriminated against both them and its Hispanic customers in a predatory lending scheme.

The complaint was filed Friday in federal court in San Antonio as a proposed class action on behalf of more than 20 Spanish-speaking mortgage sales consultants "of Hispanic ethnicity or from Mexico or other Central and South American countries."

Wells Fargo allegedly directed its bilingual team to steer customers away from products with no closing costs towards "predatory lending options," without disclosing the costs. This was partly accomplished by refusing to provide Spanish-language written materials, according to the complaint.

3. More Nuggets

Movement Mortgage has agreed to pay $23.75 million to settle allegations that it improperly originated and underwrote mortgages insured by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) programs. LINK

Despite a slight dip in market share, non-bank lenders remained dominant in the 2022 housing finance market with 60.2% control, while depository institutions increased their stake to 39.8%, according to national data from the Home Mortgage Disclosure Act. LINK

Homepoint is suing seven correspondent lenders for over $4.6 million, alleging that they failed to remedy or repurchase defective loans. The lawsuit cites issues like delinquencies, misrepresentations, and failure to meet GSE guidelines. LINK

The Federal Reserve will release the minutes from its June meeting today, which traders are hoping will shed some light on its confusing decision to pause interest rates while at the same time forecasting two more hikes this year. LINK

4. Record number of homebuyers on the move

With existing homeowners locked into their low-rate loans, the proportion of home-seekers looking in a different metropolitan area from where they live is larger than ever, a report by Redfin says.

Now, a record 25.4% of homebuyers nationwide are looking to move to a different metro area. The list below outlines the top metros witnessing the most significant influx and exodus of residents:

5. Guaranteed Rate acquires remaining stake in Premia

Guaranteed Rate has announced the buyout of its joint venture partner, Serva, to acquire the remaining interest in specialty originator Premia Relocation Mortgage.

While details of the transaction are not yet public, the acquisition sees Guaranteed Rate gain full control of the company, which specializes in offering mortgage services to relocation services companies as well as businesses that relocate workers on a regular basis.

Despite the acquisition, Premia will maintain its brand and continue its focus on serving companies that provide relocation services and businesses that frequently relocate workers.

☀️ See you on Friday!

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