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HUD has announced it will require that housing counselors participating in HUD programs to be certified to offer counseling services to consumers. In order to become certified, housing counselors must pass a standardized written examination and work for a HUD-approved housing counseling agency (HCA). Counselors will be required to demonstrate competency in six areas of housing counseling: (1) financial management; (2) property maintenance; (3) responsibilities of homeownership and tenancy; (4) fair housing laws and requirements; (5) housing affordability; and (6) avoidance of, and responses to, rental and mortgage delinquency and avoidance of eviction and mortgage default. HUD's final rule, effective January 13, 2017, will take full effect three years following the release of the certification examination. An announcement of the start of the testing and certification process is expected to be published in the Spring of 2017.

UPDATE: HUD published a technical amendment to the amendatory instructions in the final rule on January 31, 2017, at https://www.federalregister.gov/d/2017-00255.

Fannie Mae and Freddie Mac issued coordinated press releases yesterday announcing a new Flex Modification offering for delinquent borrowers. According to a statement issued by Federal Housing Finance Agency Deputy Director Sandra Thompson, the new offering "was designed based on lessons learned from crisis-era loan modification programs to help borrowers stay in their homes and avoid foreclosures whenever possible." The Flex Modification, said Thompson, "also reflects input received over the course of extensive engagement with lenders, mortgage insurers, consumer advocates, and other stakeholders." Servicers of Fannie Mae and Freddie Mac loans have until October 1, 2017, to implement the new programs.

• Fannie Mae announcement
• Freddie Mac announcement

The Federal Housing Finance Agency (FHFA) has announced a final rule to implement the Duty to Serve provisions mandated by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. The statute requires Fannie Mae and Freddie Mac to serve three specified underserved markets – manufactured housing, affordable housing preservation, and rural housing – by improving the distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low-, low-, and moderate-income families in these markets. Under the final rule, Fannie Mae and Freddie Mac will each submit to FHFA a three-year Underserved Markets Plan that describes the activities and objectives they will undertake to meet their Duty to Serve requirements. The plans will become effective January 2018.

Update: Published 12/29/2016 (see https://www.federalregister.gov/d/2016-30284)

The U.S. Department of the Treasury has announced action taken to disrupt ISIL’s financial facilitation network by designating as global terrorists the Iraq-based Selselat al Thahab Money Exchange, ISIL financier Fawaz Muhammad Jubayr al-Rawi, and his company, the Hanifa Currency Exchange in Albu Kamal, Syria. Al-Rawi and the two money services businesses have played an important role in ISIL’s financial operations by helping the terrorist group move its funds. As a result of the action, all property and interests in property of Selselat al Thahab, al-Rawi, and the Hanifa Exchange’s branch in Albu Kamal subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. For additional information see our OFAC Update.

The Department of Housing and Urban Development's Office of the Assistant Secretary for Housing has published a notice in this morning's Federal Register that the Federal Housing Administration (FHA) is shifting the timeframe for FHA's review of loans prior to endorsement from pre-closing to post-closing. A lender applying for unconditional Direct Endorsement authority will therefore submit required loan files, required in accordance with HUD regulations, only after closing. After determining that the mortgage is acceptable and meets all FHA requirements, FHA will notify the lender that the loan has been endorsed. The change will be effective on January 13, 2017.

A CFPB Blog article reviews the 2015 CFPB report that found 26 million Americans were “credit invisible.” A brief of the original report is provided as well as a new checklist, “Building credit from scratch.”

The National Credit Union Administration has announced that it has issued a cease and desist order to S M Federal Credit Union of Philadelphia, Pennsylvania. Credit union officials have consented to the order, which requires that the credit union:

• Provide credit union records to the compensated auditor;
• Complete a member account verification and supervisory committee audit;
• Reconcile and maintain accurate financial statements and member share and loan records;
• Calculate and track loan delinquency;
• Actively and effectively collect past due loans;
• Cease granting new loans;
• Ensure the supervisory committee is fully staffed and fulfilling all obligations; and
• Provide the agency with monthly financial statements and board and committee minutes.

S M FCU is an associational (faith-based) credit union serving 115 members. Its September 2016 call report shows $56,005 in total assets.

The NCUA has released the NCUA Quarterly U.S. Map Review for the third quarter 2016. The review indicates federally- insured credit unions saw continued improvement in nearly every category. Nationally, median loan growth in federally insured credit unions was 3.9 percent during the year ending in the third quarter. In the same period, median asset growth was 4.2 percent; the median rate of growth in deposits and shares was 4.5 percent; and the median loans-to-shares ratio rose to 63 percent.

The Federal Deposit Insurance Corporation published in this morning's Federal Register a Notice of renewal of the agency's Advisory Committee on Economic Inclusion. The Committee will continue to review various issues that may include, but not be limited to, basic retail financial services such as low-cost, sustainable transaction accounts, savings accounts, small dollar lending, prepaid cards, money orders, remittances, and other services to promote asset accumulation and financial stability.

OFAC has published a General License authorizing certain transactions and activities to liquidate and wind down Banco Continental, S.A. Those transactions and activities would otherwise be prohibited under the Kingpin Act. Banco Continental, S.A. was sanctioned in October 2015. See our OFAC Update for addition information.