The Colonial Lakes Apartments, a new affordable multi-family project in Greenacres, will open its doors in October, the Palm Beach Post reported. The $19 million project, which will have 120 units, is being built with money from the federal Neighborhood Stabilization Program along with a bond from Palm Beach County and funds from tax credits. [more]

David Montoya, inspector general at HUD

A new report from the inspector general of the U.S. Department of Housing and Urban Development shows that the management at large banks, not low-level employees, were responsible for the forging of foreclosure documents that sparked a nationwide investigation, culminating in the settlement filed yesterday. The report shows bank managers ignoring “widespread errors in the foreclosure process,” the New York Times reported. [more]

Bank of America should face fraud claims because its Countrywide unit submitted faulty data in claims for reimbursement of federally insured mortgages, according to an audit by the Department of Housing and Urban Development, Bloomberg News reported.

“Countrywide did not properly verify, analyze, or support borrowers’ employment and income, source of funds to close, liabilities and credit information,” a HUD regional inspector general wrote in the audit. “This noncompliance occurred because Countrywide’s underwriters did not exercise due diligence in underwriting the loans.” HUD runs the Federal Housing Administration, which insures mortgages on loans to borrowers who can’t find traditional financing, such as those with low income.  [more]

You probably know that federal law prohibits kickbacks among brokers and others in
residential real estate deals. That sounds pretty straightforward: You can’t give money
to someone simply for steering a homebuyer or refinancer to a particular title agency,
mortgage lender or escrow company without providing any actual services to the
consumer.

Yet as four recent legal settlements suggest, there is still plenty of action underway at the
fringes of the law, where technology and creative financial arrangements are raising new
questions about what’s permissible and what’s not.

Take the multimillion-dollar settlement July 11 between the Department of Housing and
Urban Development and Fidelity National Financial, the country’s highest-volume title
insurance and settlement services company. [more]

The settlement of a major class-action suit is shedding new light on a controversial real estate practice that homebuyers and sellers typically know little about: Fees paid to realty brokers and agents for promoting home warranty policies.

The case involves potentially thousands of homebuyers and sellers who purchased warranty coverage from American Home Shield between May 2008 and March of this year. American Home Shield is the dominant player in the home warranty field, with sales of $657 million in 2010, according to the company. Home warranty policies offer repairs and replacements for owners when specified home systems and appliances malfunction.

Attorneys representing the plaintiffs say as many as 500,000 consumers may be members of the class, though neither they nor American Home Shield would speculate on how many ultimately will file for and receive cash from the settlement. [more]

The Obama administration has finally launched the new Emergency Homeowners’ Loan Program, a $1 billion initiative to help unemployed homeowners with their mortgage payments by giving them zero-interest loans of up to $50,000. The program was delayed last year as a result of complications in coming to agreements with state agencies, a non-profit counseling network NeighborWorks USA and a financial processing firm that are helping to run the program. The catch: Because of the delay, homeowners only have a month to apply for the program. Applications will be rejected after July 22.
“It will be challenging,” to enroll borrowers, given the short time frame, said David Berenbaum, chief program officer of the Washington-based National Community Reinvestment Coalition, which is helping run the program.
[more]

Should being pregnant and taking maternity leave ever constitute reasons to be turned down for a home mortgage or having your loan closing postponed?
You might think not, but two new legal actions by federal fair lending regulators suggest that the mortgage industry — and even federally run financing giants Fannie Mae and Freddie Mac — may need to address the issue.
In one case, a Seattle-area physician settled a discrimination complaint with Cornerstone Mortgage Co., a national mortgage banking firm based in Houston. In the second, the Department of Housing and Urban Development accused MGIC, one of the country’s highest-volume mortgage insurers, of discrimination by underwriters against a Pennsylvania homeowner whose application allegedly was denied because she was on maternity leave. [more]

The nation’s largest banks could face a potential liability of $17 billion in civil lawsuits if a settlement isn’t reached to address improper foreclosure practices, state attorneys general said yesterday, according to the Wall Street Journal.

Banks and federal officials have been going back and forward in the last two months trying to settle allegations of abuses related to mortgage servicing which emerged last fall, and the two parties are still not agreeing. The banks are proposing a $5 billion settlement to compensate wronged borrowers while some federal officials are pushing for more than $20 billion. [more]

In a housing market crowded with distressed sellers and hesitant lenders, poor housing construction figures are far from surprising. There were just 523,000 construction starts on U.S. homes in April, down 10.6 from last month, and 23.9 percent from April 2010, according to a report released by the U.S. Department of Housing and Urban Development today. That marks the largest decline since October 2009. New residential building permits also fell in April, to 551,000 from 574,000 in March and 632,000 last April. Housing completions actually rose from March’s all-time low, but still remained 25.5 percent below the number achieved last April. Only the Midwest showed positive signs in April, as housing starts jumped 15.7 percent month-over-month, but they still sit nearly 20 percent below last April’s total. TRD

Sales of new single-family homes in March 2011 were at a seasonally adjusted annual rate of 300,000, according to data released today by the U.S. Census Bureau and the Department of Housing and Urban Development.

That is 11.1 percent above the revised February rate of 270,000, but is 21.9 percent below the March 2010 estimate of 384,000. The median sales price of new homes sold in March 2011 was $213,800; the average sales price was $246,800.

The seasonally adjusted estimate of new homes for sale at the end of March was 183,000. That represents a supply of 7.3 months at the current rate. TRD