[Update 1: adds agency comment]

An ongoing investigation by a House of Representatives committee revealed a VIP lending unit at Countrywide Financial Corp. targeted senior leadership at Fannie Mae.

The House Committee on Oversight and Government Reform obtained new documents that show former Fannie CEO Jim Johnson and his successor Franklin Raines, former vice chairman Jamie Gorelick and former chief operating officer Daniel Mudd received VIP loans from Countrywide.

The investigation, ongoing since October 2008, indicates Countrywide "used its VIP loan unit to give preferential treatment to individuals positioned to advance the company's business interests," according to letter from the Committee, penned this week by Rep. Darrell Issa (R-CA), to the Federal Housing Finance Agency (FHFA).

"By accepting discounted loan terms and other preferential treatment from Countrywide, Fannie Mae employees may have violated the company's code of conduct," Issa wrote in the letter. "The code of conduct puts Fannie Mae employees on notice that accepting 'inappropriate gifts' is a violation of the code of conduct and may also be a criminal act."

To date, Bank of America (BAC: 7.29 -0.14%) — Countrywide's acquirer — produced more than 44,000 pages of documents under subpoena by the Committee. These documents linked 153 VIP loans to borrowers employed by Fannie and another 20 VIP loans to borrowers employed by Freddie Mac.

The Committee noted two spikes in the volume of VIP loans to Fannie and Freddie employees: one in 1998 as Countrywide negotiated a deal to sell billions of dollars in mortgages to Fannie at a discount. The second spike in the volume of VIP loans to Fannie employees occurred from 2001 to 2003 on the leading edge of a mortgage boom that lasted from 2002 to 2004.

"I call this information to your attention so that the Federal Housing Finance Agency (FHFA) can fulfill its obligation as conservator of the [government-sponsored enterprises]," Issa said in the letter. "In the absence of an Inspector General at FHFA, it is my understanding that the Office of the General Counsel is performing certain investigative functions."

A Fannie spokesperson could not return a request for comment, but an FHFA spokesperson told HousingWire the Agency received the House Committee's inquiry "and will respond promptly."

Freddie could not comment on specifics, but a spokesperson said "we have an employee code of conduct that says employees can't solicit or accept discount prices or more favorable loan terms on the basis of their status as a Freddie Mac employee."

Write to Diana Golobay.

Disclosure: the author holds no relevant investments.

The US Department of Housing and Urban Development (HUD) announced Wednesday that it will launch a series of investigations to determine if the lending practices used by certain mortgage lenders violated the Fair Housing Act.

The Act prohibits discrimination in lending with regard to sex, familial status (pregnancy/children) or disability. HUD said this coincides with its mission "to create strong, sustainable, inclusive communities and quality affordable homes for all."

Questions arose after the New York Times published an article demonstrating that firms may have illegally denied mortgages to expectant mothers and families experiencing short-term disability.

"This report is profoundly disturbing and requires immediate action," said John Trasviña, HUD's assistant secretary for Fair Housing and Equal Opportunity, the office that will be directing the investigations. "Lenders must not carry out due diligence responsibilities in ways that have the practical effect of discriminating against recent or expectant mothers."

The Federal Housing Administration (FHA) requires its approved lenders to review a borrower's income to determine whether they can reasonably be expected to continue paying their mortgage for the first three years of the loan. FHA-insured lenders cannot, however, inquire about future maternity leave.

"Having a child should be a time for a family to celebrate and must not be a cause for unfair lending practices," said HUD secretary Shaun Donovan.

Write to Christine Ricciardi.

Existing home sales fell 5.1% in June after a 2.2% drop in May, according to a report from the National Association of Realtors.

The June numbers mark the second straight month of declines after the homebuyer tax credit expired April 30. Lawrence Yun, chief economist at NAR, said the June home sales still reflect some activity spurred by the tax credit, as some sales from that time have yet to close. Congress passed an extension of the closing date for the tax credit to Sept. 30.

In June, there were 5.37m units sold, down from 5.6m in May. That includes single-family, town homes, condominiums, and co-ops. The sales are 9.8% higher than the 4.89m reported in June of last year.

“Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels,” Yun said.

The national median existing-home price reached $183,700 in June, a 1% increase from last year and up 2.2% from $179,600 in May.

Distressed home sales made up 32% of all sales in June, compared to 31% in May. First-time homebuyers purchased 43% of the homes in June, down from 46% in May. Investors took 13% of sales, down from 14% in May, and repeat buyers took the rest.

The total housing inventory climbed 2.5% from May to 3.9m existing homes still set to sell. It represents a 8.9-month supply at the current sales pace, according to NAR.

Broken down by category, there were 4.7m single-family home sales in June, down 5.6% from May but still 8.5% above last year. There were 670,000 condominium and co-op sales, down 1.5% from May but 20.5% higher than last year.

Existing home sales in the Northeast climbed 7.9% from May to 960,000 sales in June. The median price in the Northeast was $244,300, down 1.2% a year ago.

Sales in the Midwest reached 1.23m, a 7.5% drop from May but 11.8% higher than last year. The median price was $155,900, down 0.1% from a year ago.

There were 2m sales in the South, down 6.5% from May but 11% above levels seen a year ago. The median sales price was unchanged from a year ago at $163,600.

Existing home sales in the West fell 9.3% from May to 1.17m in June, which is 0.9% higher than a year ago. The median price in the West was $221,800, up 1.5% from last year.

Write to Jon Prior.

BB&T Corp. (BBT: 26.95 -0.33%) reported $210m of net income in Q210, a 74% increase from the year-ago quarter.

Mortgages helped drive an overall uptick in lending, with $17.5bn of originations in the quarter, compared with $15.4bn in the previous quarter. BB&T completed the systems conversion of Colonial Bank during the quarter.

BB&T in August gained the warehouse lending division of failed Colonial Bank. The company then renewed its commitment to warehouse lending by beefing up the division with a new president. BB&T said it nearly doubled its mortgage originations in 2009. The company said in June it is exiting the wholesale lending business, operated through its Liberty Mortgage Corp. subsidiary as part of a move to expand its warehouse business to correspondent lenders.

The acquisition of Colonial helped grow average total loans and leases 4.4% over the same quarter last year. The firm experienced a 9.4% increase in average loans originated by the BB&T specialized lending group, and an 11.1% increase in average revolving credit loans.

During the quarter, BB&T also focused on a strategy to accelerate the disposition of nonperforming assets, according to chairman and CEO Kelly King.

"Our long-term plan has always been to sell problem assets as pricing improved," King said in the earning statement today. "Early in the second quarter, we reached an inflection point and have seen more bidders and more acceptable valuations for problem assets. As a result, we disposed of $682m of problem assets, lowering our balance sheet risk and making significant progress in meeting the goals of the strategy."

BB&T sold $8bn of securities and recorded net gains of $219m in the quarter.

Nonperforming assets slipped 3.1% during Q110. It marks the first decrease in nonperforming assets at the bank since Q106. The ratio of loan and lease loss allowance to nonperforming loans held for investment improved to 98% at the end of the quarter, compared with 93% at the end of the previous quarter.

The company echoed industry concerns over the "unintended consequences" of financial reform legislation signed yesterday, and warned some changes in the products and services offered are expected as a result.

"[O]ur business model is still that of a traditional commercial bank, so many of the provisions will have little or no impact on us," the firm said in its earnings statement. "While we will initially have moderately higher costs and reduced revenues in some areas, we will effectively implement the provisions of the law and we expect little effect on our long-term performance."

Write to Diana Golobay.

Disclosure: the author holds no relevant investments.