FHA Activity

Browse articles from all of our Newsletters related to FHA Activity.

February 17, 2017 - Inside FHA/VA Lending

4Q16 Spike in FHA Delinquencies Justifies Trump’s Premium Action

The spike in FHA delinquencies in the fourth quarter of 2016 justifies the Trump administration’s decision last month to suspend and review the outgoing administration’s lowering of FHA mortgage insurance premiums, said House Financial Services Committee Chairman Jeb Hensarling, R-TX. Commenting on the Mortgage Bankers Association’s quarterly delinquency rate survey, Hensarling praised President Trump’s decision to set aside the 25-basis-point premium reduction, which Inside FHA/VA Lending reported first on Jan. 6, 2017. “Lowering premiums at this time was a big mistake,” said Hensarling. “The sudden increase in delinquencies makes it clear that President Trump was absolutely right to undo the previous administration’s irresponsible action.” Hensarling recalled that in 2013 “taxpayers had to spend $1.7 billion to bail out the FHA.” Going forward, the FHA must be fiscally sound, with a ...


February 17, 2017 - Inside FHA/VA Lending

Debt Burdens Crept Slightly Higher In 2016 for FHA and VA Borrowers

FHA and VA borrowers took on slightly greater payment obligations in 2016 than they have in previous years, according to a new analysis and servicer ranking by Inside FHA/VA Lending. The average debt-to-income ratio for FHA loans securitized in Ginnie Mae mortgage-backed securities last year was 40.4 percent, up about half a percentage point from 2015. The average VA DTI ratio nudged up slightly to 38.3 percent. Average credit scores in the FHA program drifted slightly lower, while climbing 1.9 points for VA loans. The differences in credit quality between the two programs remained substantial: the VA attracts borrowers with higher credit scores and lower DTI ratios who take on larger loans. Some 36.3 percent of VA loans backing Ginnie MBS issued last year had credit scores of 740 and up, while just 13.2 percent of FHA loans fell in that category. Meanwhile, 67.1 percent of FHA loans had ...


February 3, 2017 - Inside FHA/VA Lending

FHA Endorsements Decline in 4Q16 VA Refinances Increase Slightly

FHA single-family endorsements declined 5.5 percent from the third to the fourth quarter of 2016, losing some market share, while VA saw a modest uptick in guaranteed loans, thanks to robust refinancing activity. The FHA endorsed a total of $68.3 billion of forward mortgages during the fourth quarter, according to an Inside FHA/VA Lending analysis and ranking. That brought total production over a 12-month period to $255.6 billion (excluding Home Equity Conversion Mortgage loans), a 7.3 percent increase over 2015. FHA activity in the purchase market fell 13.6 percent in the fourth quarter though annual volume was up 14.3 percent from 2015. While FHA historically has been stronger in the purchase market, 2016 proved to be a more competitive year for FHA streamlined refinancing. FHA-to-FHA refinance endorsements rose 15.6 percent in the fourth quarter from the prior quarter, but ... [ 5 charts ]


January 27, 2017 - Inside Mortgage Trends

Will Carson Restore FHA MIP Cut?

Late last week, when the Department of Housing and Urban Development pulled the plug on reducing FHA premiums by 25 basis points, it was originally thought that perhaps, in time, the new White House might change its mind. As one Washington insider noted, “There was a feeling that with a little education and time and with the right decision-makers in place, that maybe they would let the cut go through. Now I’m not so sure.” An industry lobbyist – with a deep resume on Capitol Hill ...


January 20, 2017 - Inside FHA/VA Lending

HFAs to Benefit from FHA Premium Cut, Wage Growth Says Moody’s

The 25-basis-point decrease in the FHA’s annual insurance premiums translates not only to annual savings for homeowners but also boosts the competitiveness of housing finance agency loan products, according to a new report from Moody’s Investors Service. The report regards the latest FHA pricing adjustment as credit positive for housing finance agencies (HFAs) because it would make FHA loans more affordable to borrowers and increase HFA loan originations. The announcement to reduce the annual mortgage insurance premium to its lowest allowable level took stakeholders by surprise. In November, FHA had no plans to lower premiums despite an uplifting actuarial report on the condition of the Mutual Mortgage Insurance Fund. This week, however, there is uncertainty as to whether the Trump administration will allow the reduced premiums to take effect for new loans closing on or after ...


January 20, 2017 - Inside FHA/VA Lending

Trump Administration Scuttles 25 bps Annual Premium Reduction

The Trump administration has officially set aside the 25 basis point cut in FHA annual premiums in a new mortgagee letter issued by the Department of Housing and Urban Development hours after Donald Trump was sworn in as the 45th president of the United States. Mortgagee Letter 2017-07 said that the annual-premium reduction HUD announced on Jan. 9 “has been suspended indefinitely.” Stakeholders will be notified in the event of a policy change, the letter added. The letter confirms reports earlier in the week that the FHA pricing adjustment was about to be spiked. Ben Carson, who had his confirmation hearing before the Senate Banking Committee last week, told lawmakers that he planned to work with the FHA director and financial experts to review the cut. However, the HUD secretary-designate gave no indication as to whether he favored a premium reduction that would benefit thousands of ...


January 20, 2017 - Inside FHA/VA Lending

FHA/VA Default Rates Spike Up In 4Q16, Nonbanks Still Growing

Mortgage default rates appeared to spike higher in the fourth quarter of 2016, according to a new analysis and servicer ranking by Inside FHA/VA Lending. Some 5.51 percent of FHA loans in Ginnie Mae mortgage-backed securities pools were reported as 30- to 60-days past due at the end of December. That was up 80 basis points from the previous quarter and was easily the highest default rate in the past three years. FHA default rates were also up in more serious delinquency categories: loans 60- to 90-days past due and those over 90-days late. The figures are based on loan count and are not seasonally adjusted. Similar trends occurred in the VA home loan guaranty program. The 30-60 category was up 41 bps, while 90+ delinquencies jumped 19 bps. The supply of Ginnie single-family MBS outstanding continued to set new records. The total, not including multifamily and FHA home-equity conversion ... [4 charts]


January 6, 2017 - Inside FHA/VA Lending

Around the Industry

VA Extends Making Home Affordable Program. The Department of Veterans Affairs has extended the Making Home Affordable program to Oct. 1, 2017. The program was set to expire on Jan. 1, 2017. USDA Approves NewFed Mortgage to originate Section 52 Guaranteed Rural Housing Loans. The U.S. Department of Agriculture has approved NewFed Mortgage Corp., a multi-state residential mortgage lender, to originate USDA loans. Based in Danvers, MA, retailer NewFed offers FHA, VA, USDA, conventional and jumbo mortgage products. Reviews Genworth Financial’s Proposed Sale to Chinese Conglomerate. Fannie Mae has approved Arch Capital’s acquisition of ...


January 6, 2017 - Inside FHA/VA Lending

Carson’s Inexperience Front and Center in Confirmation Hearing

The lack of experience in housing and mortgage financing matters could become a sticking point with Dr. Ben Carson, President-elect Donald Trump’s nominee for Housing and Urban Development secretary, during his Senate confirmation hearing on Jan. 12, according to stakeholders. “Democrats, in particular, will want to know his credentials and positions on various housing and enforcement issues,” said an industry observer. “There is doubt whether Carson can address such questions positively and specifically. ‘Living for a while in public housing’ is not a qualification to run HUD or oversee FHA for that matter.” However, Trump’s selection of Carson and other conservatives for cabinet positions signals his intent to govern from the right – a complete reversal from the eight years under President Obama. Notwithstanding his lack of housing expertise, Carson is on the path to promote and ...


January 6, 2017 - Inside FHA/VA Lending

FHA to Implement Methodology for Finding, Classifying Loan Defects

The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...


January 6, 2017 - Inside FHA/VA Lending

Ginnie MBS Program Set New Records in 2016, VA Soared

Ginnie Mae guaranteed a total of $507.46 billion of single-family mortgage-backed securities in 2016, its biggest annual volume ever, according to a new analysis and ranking by Inside FHA/VA Lending. That was up 16.4 percent from the agency’s previous record of $435.80 billion set in 2015. (Those figures include MBS backed by FHA home-equity conversion mortgages, which are not included in the table below or in the rankings on pages 3-5.) In 2016, Ginnie guaranteed $497.03 billion of MBS backed by traditional forward mortgages, also a record, which was up 16.9 percent from the previous year. The biggest factor in last year’s record-setting production was the boom in VA lending, particularly VA refinance loans. Issuers securitized a record $203.03 billion of VA loans last year, up 33.0 percent from the 2015 total. Some 54.3 percent of those loans were refinance transactions. Total VA refi loan ... [4 charts]


Poll

With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.
Yes, by a lot.
Yes and, heck, we may even do non-QM lending.
No, not at all.
No and we may even tighten credit.

vote to see results