Mortgages

Two independent mortgage banks agreed to settlements in the past week with the Justice Department for failing to meet Federal Housing Administration guidelines. The cases are a warning to nonbank lenders that they need to beef up self-reporting of deficiencies, and they remind large banks about the legal risks associated with FHA lending.

There are no easy fixes to Nationstar's myriad problems — including a plunging stock price and increased regulatory scrutiny — but Chief Executive Jay Bray says the turnaround starts with a commitment to improving customer service.

Issues with upgrading software and ensuring pricing accuracy to comply with the consumer bureau's "integrated disclosures" have been magnified in wholesale loan transactions.

Legislative proposals to reform the housing finance system have failed to garner enough support, but a surprisingly simply reform idea is in plain sight: deeper private mortgage insurance coverage.

Since consumers have been able to lock in historically low rates, the monthly payment on a 30-year fixed-rate mortgage has been within reach for most borrowers. That could change with a rise in interest rates.

The availability of home loans for low credit score borrowers remains very tight by historical standards but there might be some loosening in 2016 if the Federal Reserve begins raising interest rates.

Sage Bank in Lowell, Mass., has agreed to pay about $1.2 million to settle Justice Department allegations of discrimination against minorities in mortgage lending.

Kal Raman has resigned as president and chief executive of Xome, the digital platform of the nonbank mortgage servicer Nationstar Mortgage Holdings.

Anticipation of rising interest rates has stirred more talk among mortgage lenders about the need to originate loans to borrowers with low credit scores. Mortgage lenders like Angel Oak Home Loans in Atlanta argue there is a distinction between the subprime products being pitched today and the infamous stated-income loans of yore.

With the Consumer Financial Protection Bureau's disclosure rule potentially slowing down the loan process, institutions need to focus on communication strategies to keep young borrowers at the closing table.