FHA lenders may expect new guidance on the use of credit overlays as the Department of Housing and Urban Development expressed concern over lenders imposing additional underwriting beyond what FHA already requires. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said there is concern about FHA lenders raising credit score requirements much higher than the agency requires to shield themselves from future liability. She said many lenders are requiring credit scores of 700 or higher, way above the traditional FHA borrower score of 640-650 – a practice that is not prohibited but ...

The Department of Housing and Urban Development is looking for ways to expand the FHA’s home renovation program to accommodate real estate-owned properties even as the mortgage industry urged HUD to open the program to investors. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said HUD is considering use of the 203(k) Rehabilitation Loan program to ease FHA’s huge inventory of foreclosed properties. HUD’s REO inventory has dropped from a peak of 68,997 foreclosed properties in March 2011 to 29,692 in February. As of May 27, the inventory was ...

Widespread objection by stakeholders has forced the Department of Housing and Urban Development to rescind a new lending policy regarding borrowers with disputed debt and unresolved collection issues and to consider clarifying the issue in future guidance. The policy, announced along with other FHA underwriting changes in February, was initially to take effect on April 1. However, industry concern about fewer borrowers qualifying for an FHA-insured loan caused HUD to extend the policy’s effective date to July 1 to reexamine and gather more information from stakeholders. HUD announced its decision to ...

Advocates for FHA condominium rule changes may have to wait a bit longer for a proposed rule currently in development, according to Acting FHA Commissioner Carol Galante. Galante said the Department of Housing and Urban Development is reviewing the current FHA condo rules for future revisions that would remove the roadblock to buyers, sellers and lenders. A proposed rule is in the works but it could take considerably more time to finish and finalize it, she said without providing a timetable. In the meantime, new guidance is on the way to ...

The real estate industry called on the Department of Veterans Affairs to offer an existing pilot program on property rehabilitation similar to the FHA’s 203(k) program in all markets, especially those with a high veteran population. In a letter, the National Association of Realtors asked that the Veterans Renovation Pilot Program be administered through the VA Loan Guaranty Program, allowing veterans to purchase distressed property for repair, alteration, renovation and improvement. The VA pilot resembles the FHA’s “fixer-upper” program for buyers interested in purchasing ...

FHA production of mortgages with loan amounts exceeding $417,000 rose to $4.8 billion during the first three months of 2012, according to Inside FHA Lending’s analysis of FHA data. The FHA posted a significant 21.1 percent increase in agency jumbo production from the fourth quarter of 2011, offsetting the 17.9 percent drop in production year over year. The agency’s maximum loan limit remained at $729,750 in high-cost areas while those of its competitors, Fannie Mae and Freddie Mac, were at the lower $625,500. Purchase loans accounted for 42.4 percent of FHA jumbo originations in ... [1 chart]

Fannie Mae, Freddie Mac and the FHA generated a record $28.79 billion in conforming jumbo business – mortgages with loan amounts exceeding $417,000 – during the first three months of 2012, according to a new Inside Mortgage Finance analysis of loan-level data. The surge in agency jumbo production – up 34.7 percent from the fourth quarter – exceeded the 14.1 percent jump in overall Fannie, Freddie and FHA business. Conforming jumbo loans accounted for 7.5 percent of the $384.83 billion in securitization and mortgage insurance business done by the agencies in the first...(Includes three data charts)

Mortgage companies reported strong gains in income from loan production and secondary marketing activity during the first quarter of 2012, according to a new Inside Mortgage Trends analysis of earnings reports filed by nine major lenders. Although the servicing business remained profitable during early 2012, income was down slightly from the fourth quarter of last year. All nine companies reported increased earnings on loan production and secondary marketing. As a group, they generated $4.84 billion in income from these activities, up 76.9 percent from...(Includes one data chart)

A continued outpouring of concerned industry commentary about the Consumer Financial Protection Bureau’s pending ability-to-repay rule has prompted the bureau to hit the reset button on the public comment period, giving the mortgage lending industry another opportunity to address some limited, specific issues before the rule becomes final. During a hearing in the Senate Banking, Housing and Urban Affairs Committee, Sen. Mike Crapo, R-ID, pressed his concerns about the rule with CFPB Director Richard Cordray and questioned him about the bureau’s intentions. “The housing credit market...

Data are one of the big drivers behind the Consumer Financial Protection Bureau’s decision to re-open the public comment period on its ability-to-repay rule before making the new regulation final. The Federal Register notice that announces the re-opening the comment period explains that the CFPB has received data from the Federal Housing Finance Agency tracking the performance of loans bought or backed by Fannie Mae and Freddie Mac from 1997 to 2011. The CFPB has also received data on other securitized mortgages. According to the bureau, the data can be tapped for a variety...