As part of the global, $26 million settlement, Bank of American will pay $1 billion to resolve the wrongdoing during the investigation, including an immediate payment of $500 million toward recovery for harm done to the Federal Housing Administration by practices conducted by Countrywide. The remaining $500 million will be deferred to fund a loan modification program for Countrywide borrowers with underwater mortgages, according to FHA.

Any remainder of the $500 million designated for loan modifications will be returned to the federal government after three years, according to the agreement.

“We are committed to protecting the FHA’s ability to provide assistance to qualified low income and first-time home-buyers, and this settlement goes a long way toward that end. It also puts lenders on notice that they will face serious financial consequences for violating their obligations under the FHA’s programs,” stated United States Attorney Loretta Lynch.

The joint federal-state agreement is part of enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force.

Written by Elizabeth Ecker

In its quarterly report, Genworth noted the move away from certain business channels in order to focus on profitable business segments. It cited strong life insurance business and recovering mortgage insurance unit as leading to its quarterly results.

During the quarter, the company reported an increase in corporate and other net operating loss, attributing the greater loss to goodwill associated with the company’s reverse mortgage business. Genworth acquired Liberty Reverse in November 2007 for $50 million and was the first major insurance provider to acquire a reverse mortgage lender.

During the fourth quarter, Genworth reported a non-cash impairment charge of $19 million to write off all of the goodwill associated with the reverse mortgage business, the company reported.

“Corporate and Other’s net operating loss was $63 million, compared with $45 million in the prior year quarter, driven primarily by a $19 million after-tax impairment of all the goodwill associated with the reverse mortgage business,” the company stated in its earnings report.

“For Genworth, 2011 was a year of repositioning actions to move the company through an uncertain environment and provide a foundation for improved shareholder value. We made progress in several areas and will maintain an intense execution focus during 2012.” said Michael Frazier, Genworth chairman and CEO. “At business portfolio and product line levels, we took important steps to improve our focus, strengthen risk buffers and capital generation, and support future redeployment of capital.”

Genworth’s stock price rose 7% to $8.62 per share following the announcement Thursday.

Written by Elizabeth Ecker

“We were looking for someone to help us as we continue to grow our wholesale business,” said Sandy Tennekoon, who oversees Wholesale Relations and Business Development for Urban’s wholesale lending division, Reverse it! “Ryan is a great fit to our existing team.”

Prior to his work at Genworth, Menerey began his career in wholesale mortgage lending with Indymac Bank. In his role with Urban, he will work from Southern California.

“We are excited to have Ryan as a part of our wholesale team,” said Sherry Apanay, Managing Director, Sales for Urban Financial Group. “We believe his industry expertise and commitment to customer service will bring tremendous value to our company.”

Urban Financial has risen recently to the No. 1 spot for wholesale reverse mortgage lending, according to data from Reverse Market Insight.

Written by Elizabeth Ecker

“We were encouraged to see they approved us,” says Michael Hild, chairman and CEO of Live Well, who attributes the timing to a changing environment for GNMA issuers. “I’m not so sure that approval would have happened if it were not for [the exits of] Bank of America, Wells Fargo and all of the [issues] at MetLife right now,” he says.

Live Well, which ramped up its forward business in the wake of Fannie Mae’s exit from reverse mortgages and is now refocusing on reverse mortgages, says it will look to begin issuing as early as March of this year.

“Since FNMA was our only investor for reverse mortgages, FNMA’s decision to pull out was a significant blow to our company,” Live Well said in a company press release. “When GNMA then decided to place a moratorium on new HMBS issuers, that decision essentially relegated us to the sidelines of the industry. Given that reverse mortgages were the only product Live WellFinancial offered when GNMA put its moratorium in place, these circumstances created an enormous challenge for us.”

The Richmond, Virgina-based company has built a forward business in the meantime, but says it may consider getting into retail reverse mortgages in the coming year as well.

“We’d all like to see more reverse and less forward,” Hild says. Live Well is still ironing out the details of a retail channel, but says it is growing its correspondent and wholesale business in the meantime and is looking to partner with correspondent loan sellers and wholesale brokers as it reinvigorates its reverse business.

While Ginnie Mae’s HMBS issuer list still holds just 15 names as of December, and the list is shorter for those actually issuing, Hild says the approval is a good sign for the future and the timing is essential.

“I think this is good news for the industry,” he says. “…it’s been so long [since we applied], it’s a little bit of a surprise. In large part, it’s a function of what’s going on at other companies.”

Written by Elizabeth Ecker

In a memo obtained by RMD, Urban outlined the draft of proposed guidelines for borrowers and is seeking comments between now and January 27. The company has not indicated any time frame for implementing any guidelines, a company spokeswoman told RMD.

“It is important that the entire industry be proactive on this matter to help assure the long term viability of the HECM program,” Urban said in an email to its wholesale partners. “Before we announce our final policy, we want our partners’ feedback on our proposed financial assessment guidelines.”

Under the proposal, each loan submission must include income documentation and tax payment history.

If borrowers have defailted on their taxes within the past two years or failed to maintain up-to-date insurance on the property, the application will be reviewed to ensure the borrower meets minimum residual income requirements.

“As a leader in the reverse mortgage industry, Urban Financial Group, Inc. recognizes its duty and responsibility to finding a viable solution for the current tax and insurance default situation,” the company said in the memo.

Urban Financial’s proposal is the first following MetLife’s implementation of a new policy in November. However, RMD confirmed with MetLife this week that it has suspended that policy, effective Wednesday, January 25.

In its announcement, MetLife cited the lack of other lenders following suit as one reason for the suspension, although it remains committed to the concept and the initiative toward reducing borrower tax and insurance defaults, a company spokesman said.

Many lenders have stated their support for implementing a financial assessment, but have yet to establish official policies.

Additionally, the National Reverse Mortgage Lenders Association released “limited underwriting” guidance in October following statements of encouragement from Department of Housing and Urban Development officials in the months preceding.

Written by Elizabeth Ecker

“Making the transition from our own technology to working with Mortgage Cadence will allow us to focus on our business processes and strategies,” said Mark Sohl, Chief Operating Officer from Generation Mortgage, in a statement. “The ability to leverage Mortgage Cadence will enable us to focus our time and energy on continuing to provide the superior customer service in which we pride ourselves.”

By upgrading to this product suite, top-ten reverse mortgage lender Generation now has “complete and comprehensive system integration” that promises “greater efficiency and scalability in multiple business channels under the umbrella of a single solution,” according to Mortgage Cadence.

Mortgage Cadence touts its technology as enabling lenders to streamline processes and refocus attention on growing their business and increasing overall profitability.

Written by Alyssa Gerace

“MetLife Home Loans instituted a financial-assessment model for originating HECMs in November 2011. However, other lenders have not begun such assessments, creating confusion in the marketplace for consumers,” a MetLife spokesman told RMD in a statement. “Therefore, even as it continues to support industry efforts, and works with the FHA to formalize industry-wide financial assessment rules and regulations, effective today MetLife Home Loans has suspended the use of its financial-assessment models.”

The company implemented its policy following guidance released by the National Reverse Mortgage Lenders Association as well as statements from Department of Housing and Urban Development officials that such an assessment was fair game for lenders. Acting Housing Commissioner Carol Galante also encouraged the use of financial assessment saying it was a “good idea” before NRMLA conference attendees in October. Yet MetLife stood as the only lender to act at the time.

“In October 2011, the Federal Housing Administration issued guidance that reverse mortgage lenders could consider the financial capacity and credit assessment of HECM  applicants. At that time, many in the reverse-mortgage lending industry, including MetLife Home Loans, were in significant discussions on how best to implement financial assessment of HECM applicants,” the MetLife spokesman said.

Since implementing the new policy, which considers a borrower’s income and credit in order to qualify, brokers have reported they have brought business elsewhere because many borrowers could not qualify under the new guidelines. Industry estimates have placed that proportion of borrowers at between 10% and 30%.

Other lenders have stated they are developing financial assessment guidelines but have not stated a time frame for their release. HUD has also said it is developing a rule, but that the process takes many months and the final release date is uncertain.

“MetLife Home Loans continues to strongly believe that developing a sound financial assessment process will further the stated goals of the HECM program, and make the program stronger and more attractive to the maximum number of potential senior borrowers,” the company spokesman said.

The company is expected to provide more information to industry partners during a conference call Wednesday.

Written by Elizabeth Ecker

RMD: When did you know it was the real deal with reverse mortgages?

Rhiannon Behnke: Do you really want to know?

RMD: That’s why we asked!

My obsession of wanting to do this for a living goes back to 10 years old.

RMD: Seriously? How could you have known at such a young age?

RB: To be honest, it was a little material-driven. My uncle was a bigwig for Directors Mortgage, the largest private mortgage banker in California. I wanted to know: “What does he do, and how do I do that?” At the same time, I was volunteering at a senior center and wondered how I could do that for a living but also work with this age population I was attracted to. Once that was stuck in my head…reverse mortgages. That was it.

Which companies have you worked for in the industry?

My first job was with Directors Mortgage. I worked on reverse mortgage files. Then they sold to Norwest Mortgage. They inherited me and I became a repair specialist. Then we merged into Wells Fargo.

[Wells Fargo's] Jeff Taylor stepped in and gave me a shot as a loan officer. I moved to Florida and began working with borrowers for the first time. I learned what it was like to struggle and live on Rice-a-Roni. But the combination of persistence and marketing led to consistent originations, finally.

How did you get back to California and Security One?

Actually, it started at a bar in Carlsbad. I was commuting from seeing my family in Southern California to work in Florida when I bumped into Bob Sivori and Jim Cory at a bar on the coast. (They saved me from a crazy old lady at that bar!) Then we exchanged cards and I ended up going to work with them in New York and New Jersey. Slowly I made my way to Financial Freedom and back to California.

There, I learned wholesale, and Security One’s Torrey Larsen was one of my clients. I was his AE. I’ve looked up to him ever since.

And the rest is history?

Well, it took him five months and he didn’t know a thing about reverse mortgages, but yes, in January of 2007 I officially joined Security One.

Five years later…what do you see when you look back?

We’ve come so far. I saw our Pat Boone commercial this morning on the WeatherChannel and I nearly cried. We have also launched Community One, our not-for-profit division that works with different organizations on charitable causes.

So what remains the biggest challenge facing this industry?

Not being able to control regulations and knowing how to navigate around them. I’m not against change, but it’s the biggest challenge.

For visitors to Security One’s home town of San Diego, what’s not to be missed?

Mexican food. And I mean true Mexican food. Carne Asada burritos and best margarita you’ll ever have.

(Editor’s note: Rhiannon’s picks are Fidel’s in Carlsbad or Roberto’s for a quick burrito stop.)

Written by Elizabeth Ecker