FHA & Ginnie Mae

Browse articles from all of our Newsletters related to FHA & Ginnie Mae.

February 17, 2017 - Inside FHA/VA Lending

Around the Industry

Nominee for HUD Secretary Purchases House Prior to Confirmation. With his Senate confirmation still up in the air, Ben Carson, President Trump’s pick to head the Department of Housing and Urban Development, has bought a $1.3 million house in an affluent neighborhood in Fairfax, VA, the Washingtonian has reported. According to the magazine, Carson’s new abode is a 6,400-square-foot traditional-style house with five bedrooms and four and a half baths. It is located on a 1.5 acres, a short distance from the Wolf Trap concert venue and the Meadowlark Botanical gardens. The 65-year-old neurosurgeon and his wife Candy also own million-dollar homes in Florida and Baltimore County, MD. The Senate Banking Committee approved Carson’s nomination on Jan. 24 but the full Senate has yet to vote on it. No date for a confirmation vote has been set ...

February 17, 2017 - Inside FHA/VA Lending

VA Peppers Lenders with New Policy Guidance, Instructions

The Department of Veterans Affairs has issued guidance regarding various aspects of the VA Home Loan program. On Valentine’s Day, the VA sent out a reminder to VA lenders regarding the continued use of the current National Pest Management Association (NPMA) Department of Housing and Urban Development Forms NPMA-99-A and NPMA-99-B. Circular 26-17-07 has instructions for filling out both forms. HUD NPMA-99-A, Subterranean Termite Protection Builder’s Guaranty, is completed and certified by the builder. The licensed pest control company completes the HUD-NPMA-99-B. Also on the same day, the VA announced a new requirement for staff appraisal reviewers (SARs). In 2015, VA released guidance, that established a low-risk and a high-risk appraisal review process. This requires SARs to review the LoanSafe Appraisal Manager product during the issuance of the ...

February 17, 2017 - Inside FHA/VA Lending

Lender to Military Communities Aims for Transparency, Service

While one would usually expect a VA lender to entice military borrowers to take out a VA loan, AAFMAA Mortgage Services defies convention by giving military families the option of choosing a mortgage that best suits their financial needs. That means presenting the pros and cons of every product type – conventional conforming, FHA, VA and USDA loans – for prospective veterans and active duty military and boiling it down to the best possible loan choice, said Andy May, chief operating officer of AAFMAA Mortgage Services. AAFMAA stands for American Armed Forces Mutual Aid Association, a member-owned, tax-exempt nonprofit that provides life insurance, survivor assistance, financial planning, investment management and trust services to military communities nationwide. The association has an interesting history. According to Wikipedia, a group of U.S. Army officers ...

February 17, 2017 - Inside FHA/VA Lending

GAO Report Calls for Scrutiny of FHA Insurance Fund Requirements

The Government Accountability Office released a report this week highlighting “high-risk” areas that the federal government should address, including ongoing concerns about capital requirements for the FHA’s Mutual Mortgage Insurance Fund. “As evidenced by the $1.68 billion FHA received in 2013, the current 2.00 percent capital requirement for FHA’s fund may not always be adequate to avoid the need for supplemental funds under severe stress scenarios,” the GAO said. Issues involving the MMIF first received the GAO’s “high-risk” designation in 2013. The GAO reiterated its call for Congress or the FHA to specify the economic conditions that the MMIF would be expected to withstand without requiring supplemental funds. The government watchdog noted that the issue could be addressed as part of broader efforts involving reform of the ...

February 17, 2017 - Inside FHA/VA Lending

Lender, Charity Hid Defaults from FHA to Manipulate Default Rate

Three federal agencies have announced a joint settlement agreement and consent order with a New York FHA lender and several of its top executives to resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act and the False Claims Act. The U.S. Attorney for the Eastern District of New York, the Office of the Inspector General for the Department of Housing and Urban Development, and the Inspector General of the Federal Deposit Insurance Corp. announced the $1.25 million settlement with Franklin First Financial, Ltd., its Chief Executive Officer Frederick Assini, Chief Operating Officer Christopher Berman, and Andrew Dauro, a manager of the company. The lawsuit alleged that the defendants made illegal payments on behalf of borrowers from February 2009 through March 2010 to keep default rates low so that Franklin First could keep its ...

February 17, 2017 - Inside FHA/VA Lending

FHA-Related FCA Enforcement, Recoveries Increase in 2016

Claims relating to housing and mortgage fraud represented a huge chunk of the amount recovered by the federal government under the False Claims Act last year. An analysis by the WilmerHale law firm found that the Department of Justice continued to give high priority to FCA investigations and prosecutions in 2016, resulting in more than $4.76 billion in settlements and judgments, nearly $1 billion more than in 2015. The increase also reflected a continued focus on financial institutions and the mortgage lending industry, with approximately $1.6 billion in recoveries last year, the law firm said. The DOJ, working on referrals from the Department of Housing and Urban Development’s inspector general, has used the FCA effectively as a tool in prosecuting FHA-related fraud cases against lenders. The DOJ ...

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

Republicans Invoke Cloture in Upcoming Carson Confirmation

Ben Carson is a step closer to being confirmed as secretary of the Department of Housing and Urban Development after Republicans this week invoked cloture to block any attempt by Democrats to delay or prevent a Senate confirmation vote. Republicans filed their cloture motion and waived quorum call on Feb. 13, effectively ending further debate on Carson’s nomination. At least 16 senators must sign a cloture petition.]There has been no date set for Carson’s confirmation vote. The Trump administration has been slow to fill its Cabinet positions, partly due to Democrats’ stalling techniques. So far, only nine cabinet positions have been filled. There has been no Senate action scheduled since the Senate Banking Committee approved Carson confirmation by voice vote on Jan. 24, and nobody seems to have an explanation for the delay. While the committee vote was unanimous, Democrats continue to ...

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 17, 2017 - IMFnews

What We’re Hearing: Huge GSE Profits, Don’t Get Used to It / The Perfect (Earnings) Storm / A Ginnie Solution for the GSEs? / PHH’s New Strategy / Aide to HUD Nominee Ben Carson Fired for Writings Critical of Trump

One former Fannie Mae official told us that stellar profits posted by the two are “just about done.”

February 17, 2017 - IMFnews

Private MIs Expanded Market Share in 2016 Despite a Surge from the VA Guaranty Program

Most of the gain in private MI market share came at the expense of the FHA program…

February 15, 2017 - IMFnews

MBS and ABS Sectors Adjusting to Risk-Retention Requirements

Sponsors can generally meet the requirements by retaining the most subordinate tranches of the securitization equaling at least 5.0 percent of the deal…

February 14, 2017 - IMFnews

As Rates Rise, MBS Liquidity Improves. The Wild Card: the Fed’s Plan to ‘Lighten’ Its Balance Sheet

Agency MBS trading volumes peaked back in 2008 – the height of the financial crisis – at $344.9 billion daily.

February 13, 2017 - IMFnews

IMA and Phoenix Capital Hit Market with New MSR Deals

Phoenix Capital is offering a private jumbo MSR portfolio sized at $216 million…

February 10, 2017 - Inside Mortgage Trends

Data: Top Agency Purchase-Mortgage Sellers and Agency Purchase Mortgages by State: 12M2016

A ranking of the top 100 agency purchase-mortgage sellers in 2016 and a ranking of agency purchase mortgages by state.

February 10, 2017 - IMFnews

Mortgage Securitization Rate Near Record-Low in 2016

Blame the whole loan-hungry megabanks for the low mortgage securitization rate?

February 9, 2017 - IMFnews

Short Takes: Time to Sell GSE ‘Juniors’? / Bruce Berkowitz, True Believer / What Fannie, Freddie and Sears Have in Common / Whatever Happened to Sears Mortgage? / Texas Capital Accumulating MSR Assets / First Franklin Settles FHA Charges

Besides the GSEs, one Fairholme’s most speculative investments is Sears Holdings Corp., the struggling retailer…

February 9, 2017 - IMFnews

HUD IG Says FHA Improperly Cleared New Defect Taxonomy…

A recall of the defect taxonomy would be a blow to lenders…

February 9, 2017 - IMFnews

Government-Insured Originations Hit All-Time High in 2016, but Fell Off in 4Q16

It doesn’t get any better than this: Ginnie Mae production hit a record $545 billion in 2016…

February 8, 2017 - IMFnews

GAO Slams HUD for Weaknesses in Cost Estimates Related to FHA Modernization

HUD officials said the agency has been focused on establishing an infrastructure to improve its cost estimating practices.

February 7, 2017 - IMFnews

FHA Production Up 7.3 Percent in 2016; Banks Account for Just Two of the Top 15 FHA Lenders

Banks continue to pull away from directly funding FHA loans in the retail channel, citing the potential legal liability…

February 6, 2017 - IMFnews

Carson Wants Housing Finance ‘Specialist’ as FHA Commissioner

Nondepositories now dominate FHA production after several large banks exited the government program due to growing concern over potential liability arising from federal lawsuits…

February 3, 2017 - Inside FHA/VA Lending

Around the Industry

Final Civil Action: Primary Residential Mortgage. The Department of Housing and Urban Development’s Office of the Inspector General has recommended that the department’s Office of Legal Counsel acknowledged $3.13 million of a $5 million settlement agreed to by Primary Residential Mortgage is due HUD. Primary agreed last September to a $5 million settlement with the Department of Justice to resolve allegations of failing to comply with FHA requirements in connection with its origination, underwriting and endorsement of 100 FHA-insured loans. Primary’s settlement is neither an admission of guilt nor assumption of any liability that may arise from the flawed transactions, the IG said. As of Oct. 4, 2016, the settlement amount due HUD had been paid in full. Moody’s Downgrades $243 Million of FHA/VA Residential MBS. Moody’s Investors Service has downgraded the ...

February 3, 2017 - Inside FHA/VA Lending

Vet Agency Clarifies Student Loan Policy in Underwriting VA Loans

The Department of Veterans Administration has issued guidance to clarify its new policy regarding student loans in underwriting VA guaranteed home loans. Specifically, the guidance shows lenders how to calculate a student-loan monthly payment when figuring out a VA borrower’s ability to repay. The clarification in the guidance applies to deferred student loans and the new policy will provide guidance for student loans currently in repayment or about to begin repayment within 12 months of a VA loan closing. How should a lender calculate a student loan monthly payment for loan underwriting purposes? A monthly payment need not be considered if the borrower provides written proof that the student loan will be deferred at least 12 months beyond the closing date, the guidance said. If a student loan is under a repayment plan or is about to begin repayment, the lender must consider the anticipated monthly payment in the ...

February 3, 2017 - Inside FHA/VA Lending

Suspending Premium Reduction Appears to be Better for HUD

Setting aside the 25-basis-point FHA premium reduction is a good idea because it would not have done much to expand access to credit anyway, according to researchers at the Urban Institute. In a recent analysis, Laurie Goodman, co-director of UI’s Housing Finance Policy Center, and research associate Bing Bai took a closer look at the FHA pricing adjustment and found that the impact on the market would have been small.The researchers concluded that retaining the current pricing for FHA-insured mortgages would help strengthen the FHA’s financial situation and allow the Mutual Mortgage Insurance Fund to build its buffer. As one of his final official acts as secretary of the Department of Housing and Urban Development, Julian Castro announced a 25-basis-point MIP reduction for most FHA single-family mortgages. The fee change was to take effect on Jan. 27, 2017. Just hours after ...

February 3, 2017 - Inside FHA/VA Lending

HUD Issues Guidance on Servicing Loans on Homes with PACE Liens

The Department of Housing and Urban Development has issued guidance for servicing FHA-insured mortgages on properties encumbered with a Property Assessed Clean Energy (PACE) obligation. The PACE guidance establishes servicing policies and procedures that went into effect on Jan. 19, 2017. It applies to all FHA Title II forward mortgages. A PACE loan is a way to finance clean-energy improvements in residential and commercial properties to reduce energy bills and facilitate water and energy conservation. The terms and conditions of a PACE loan may vary among state, local government and programs. Generally, a PACE loan is secured and collected in the same manner as a special tax assessment on the owner’s property. Payments are not made directly to the ...

February 3, 2017 - Inside FHA/VA Lending

MBA Concerned About Lack of Consumer Protections in PACE

The Mortgage Bankers Association has asked the Trump administration to help close a loophole in the Property Assessed Clean Energy (PACE) program that could put consumers at risk. In a recent public service video, Pete Mills, MBA senior vice president for residential policy and member engagement, said the MBA has been in contact with the president’s transition team to see if there is a way to incorporate consumer protections into the program. Mills noted a “significant void in consumer protection” due to the structure of PACE programs. The PACE program allows local or state governments, when authorized by state law, to finance the upfront cost of energy upgrades on commercial, residential or industrial properties. A PACE loan is repaid over a set period – typically 10 to 20 years – through a special assessment on the property on top of the owner’s annual property tax bills. It has seniority over all ...

February 3, 2017 - Inside FHA/VA Lending

Carson Wants a ‘Housing Finance Specialist’ as FHA Commissioner

Housing and Urban Secretary-Designate Ben Carson said he would want an expert in housing finance to lead the FHA and help draw disillusioned lenders back into the FHA single-family mortgage program. In a written response to questions from Sen. Sherrod Brown, D-OH, ranking minority member of the Senate Committee on Banking, Housing and Urban Affairs, Carson provided no detail on how he would entice previous lenders to return to the FHA. Carson made clear, however, that if confirmed he would seek a “strong housing finance practitioner who believes in the mission of the FHA” for the job of FHA commissioner. “We will work hard to balance mission and risk to preserve and sustain FHA now and into the future,” he wrote. “We will also use existing authorities to increase the certainty of loan eligibility in an effort to attract back many of the lenders who are no longer ...

February 3, 2017 - Inside FHA/VA Lending

IG Calls for New Clearances for 13 Policy Changes Over Last 2 Years

The Department of Housing and Urban Development’s inspector general has recommended a recall of several major policy changes HUD has made over the last two years for review and clearance, including the agency’s defect taxonomy. The HUD IG said an audit found that the department had failed to review, approve and document FHA program directives as required when implementing changes to its programs, policies and operations from July 2014 through December 2015. The findings come just as President Trump ordered a freeze on new rules, policies, directives and notices pending a review by the incoming administration. Specifically, HUD distributed at least 15 documents and implemented significant policy changes without first completing departmental clearance, the IG said. At least three draft documents were posted for public comment without obtaining full departmental clearance, the ...

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 ]

February 3, 2017 - IMFnews

Agency MBS Issuance Tumbles by Almost 16 Percent in January

Fannie Mae saw the biggest drop in refi volume, a 30.2 percent decline from December…

February 2, 2017 - IMFnews

MountainView, Phoenix Capital Out with New MSR Deals

With interest rates staying steady the past few weeks, more bulk MSR deals are hitting the market.

January 30, 2017 - IMFnews

Citigroup Kisses MSR Business Goodbye; A Rising Force Named ‘New Rez’

The last company to go on an MSR acquisition binge this fierce was Ocwen Financial…

January 30, 2017 - IMFnews

Hope Dims for a Reversal in HUD’s Decision to Kill the MIP Reduction

This source continued: “If only Castro had put the MIP cut through right after the actuarial report came out, we probably wouldn’t be talking about this right now.”

January 30, 2017 - IMFnews

Bulk MSR Transfers up Sharply in Late 2016; Co-Issuance Sector Cooled

Bulk transfers of Freddie Mac MSRs also increased dramatically in 4Q16, more than doubling to $17.52 billion…

January 27, 2017 - IMFnews

What We’re Hearing: Still Here: CFPB Chief Cordray / Maybe the CFPB Needs to Hire Some LOs / Realty Firms Show Affection for Mortgage Lending / Less RESPA Enforcement? / Warburg Makes a Mortgage Investment / HUD IG Issues a ‘Recall’

Maybe the CFPB should hire some loan officers who have actually closed a mortgage...

January 27, 2017 - IMFnews

CMBS Issuance Fell in 2016, but Fannie and Freddie Were Rock Stars

Fun fact: Fannie, Freddie and Ginnie accounted for 95.6 percent of multifamily mortgages securitized in 2016…

January 25, 2017 - IMFnews

Short Takes: loanDepot in a Hiring Mode / Some Name Change Tweaks / Movement Mortgage Hiring as Well / Give us Back Our FHA MIP Cut / ServiceLink Fined by Feds

In a poll conducted by Inside Mortgage Finance, just 14 percent of respondents said they were against a cut in FHA premiums.

January 24, 2017 - IMFnews

Suspending FHA Premium Cut is a Good Thing, Says AEI’s Ed Pinto

At least some factions of the industry are happy about the FHA not cutting premiums, including Ed Pinto of AEI…

January 23, 2017 - IMFnews

Short Takes: The MIP Cut: No Big Deal? / A True FHA Jumbo? / New MF MBS From Freddie Mac / Nice Earnings from MGIC / Annaly’s Chief Legal Officer to Retire

One loan officer said FHA should consider building a "true jumbo program that is exclusive of Fannie Mae and Freddie Mac…”

January 23, 2017 - IMFnews

Past FHA Commissioner Montgomery Suggests Common Standards for FHA,VA, GSEs…

Brian Montgomery’s proposed Office of National Housing Policy would be headed by a “housing policy czar…”

January 20, 2017 - Inside FHA/VA Lending

Around the Industry

Nonprofits Seek FHA Data on Reverse Mortgage Foreclosures at Steve Mnuchin’s Former Bank. Two nonprofit groups have submitted a Freedom of Information Act request regarding Financial Freedom’s history of reverse mortgage foreclosures. Financial Freedom is a reverse mortgage service owned previously by Steve Mnuchin, President Donald Trump’s nominee for U.S. Treasury Secretary. The two groups, California Reinvestment Coalition and the Jacksonville Area Legal Aid, Inc., have asked the FHA for data on Home Equity Conversion Mortgage foreclosures. The data request includes the number of HECM foreclosures in each state by the industry as a whole, and by Financial Freedom since April 2009, as well as the number of spouses who have invoked FHA’s option to remain in their homes after the death of their borrower spouse. NY Governor Announces Plan to Protect Seniors from ...

January 20, 2017 - Inside FHA/VA Lending

E-Submission Required for VA Prior-Approval Loan Documents

Effective Feb. 13, 2017, VA lenders will be required to submit prior-approval mortgage loans electronically through the WebLGY system to improve the prior-approval process. Currently, lenders mail their prior-loan approval packages to the regional loan center that has jurisdiction over loan underwriting – a tedious, time-consuming process. Electronic submission will help speed things up, the VA indicated. Lenders must follow the guidelines for prior approval and stacking order in the VA’s Lender Handbook. In addition, lenders must furnish a cover letter with the uploaded package stating the reasons for the prior approval and explaining any unique circumstances. The cover letter also must include the submitting underwriter’s name, phone number and email address as well as contact information for the underwriter’s manager. The lender must ensure that the file contains the correct and complete ...

January 20, 2017 - Inside FHA/VA Lending

Ex-FHA Chief Suggests Common Standards for FHA, VA, USDA, GSEs

A former FHA commissioner is calling for a common national housing policy and regulations, as well as aligned capital standards for FHA and the government-sponsored enterprises in lieu of the current regulatory regime – an idea first put forth by the Mortgage Bankers Association. Brian Montgomery, former assistant secretary for housing and FHA commissioner in the second Bush administration, said the nation’s homebuyers are at a disadvantage due to the lack of a unified, detailed plan for the housing finance system. Montgomery, a current contender for a top executive position at the Department of Housing and Urban Development, urged President Trump to create a new Office of National Housing Policy to develop a “unified and collaborative approach to our nation’s housing policy, including homeownership and subsidized rental housing.” “The prevailing view within the ...

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

DOJ’s Top FCA/FIRREA Prosecutor Agrees to Another Term at SDNY

Preet Bharara, the Department of Justice’s top prosecutor of FHA fraud and legacy mortgage-backed securities cases, has accepted President Donald Trump’s request to stay on as US Attorney for the Southern District of New York. The question is whether Bharara, who was nominated by President Obama in 2009, will be as aggressive as he was under the previous administration in holding FHA lenders accountable for faulty business practices that result in huge taxpayer losses. Since 2009, Bharara’s aggressive enforcement has resulted in cases filed against large and regional FHA lenders alleging fraud in violation of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act. Except for two cases that went to trial, all the other FCA/FIRREA cases against FHA lenders ended in consent orders and huge settlements. The DOJ’s (and Bharara’s) vigorous enforcement of the two statutes, both of which provide for hefty monetary penalties, have forced many larger banks to exit the ...

January 20, 2017 - Inside FHA/VA Lending

FHA Codifies Key Changes to HECM Rules, Issues New Program Policies

The Department of Housing and Urban Development has codified significant changes to the Home Equity Conversion Mortgage program that have reduced risks to both FHA and reverse mortgage borrowers. Specifically, the rule codifies existing HECM policies implemented by mortgagee letters, implements statutory changes, issues new origination and servicing policies, and clarifies existing regulatory language. HUD said it has established an eight-month lead time between the publication of the final rule and the effective date, Sept. 19, 2017, to provide lenders enough time to understand the rule and plan for necessary changes. The grace period also allows time for FHA to issue guidance and make system changes. The National Reverse Mortgage Lenders Association expressed support for the final rule. “Personally, I am glad to see this final rule get out the door,” said NRMLA President and ...

January 20, 2017 - Inside FHA/VA Lending

Lenders Expect VA Refis to Drop in 2017, Rising Demand for Purchase

VA originations have been trending upward over several quarters, thanks to an unusually heavy share of refinance business, but all good things, at some point, must slow down, lenders say. The refinance business overall has fallen to 45 percent from 55 percent in the fourth quarter of 2016, and that will have an effect on VA originations in the first quarter of 2017, said Andy May, chief operating officer of the American Armed Forces Mutual Aid Association Mortgage Division. Going forward, May expects VA originations to fall by 10 percent in the first quarter due to rising interest rates. But even though rates have been trending up, May saw an uptick in VA loan applications in January as fence-sitters jumped into the market to take out a loan before rates went any higher. “The MBA estimates rates will rise above 5 percent in the next 24 months and then down to 4.8 percent by the end of 2018, and up to 5.3 percent at the ...

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]


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.

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