FHA Origination

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

July 15, 2016 - Inside FHA/VA Lending

Around the Industry

CA Legislature Poised to Pass Protections for Widowed Homeowners. The California legislature is a step away from enacting legislation that would extend existing foreclosure protections in the state Homeowners Bill of Rights (HBOR) to widows, widowers and other heirs of deceased homeowners. The legislature passed the HBOR in 2012 to provide due process protections to homeowners and establish rules and procedures for communication between servicers and borrowers regarding options to avoid foreclosure. However, the bill’s protections did not extend to surviving spouses and successors-in-interest who may wish to continue paying the mortgage loan but could not assume the loan or afford the payment with the loss of the deceased homeowner’s income. Surviving family members may then seek a loan assumption or modification, only to be refused by the servicer because their names are not on the ...


July 15, 2016 - Inside FHA/VA Lending

Senate Passes Legislation Easing Condo Recertification Process

The U.S. Senate this week passed legislation that includes reforms to current FHA restrictions on condominium financing, among other provisions. H.R. 3700, the Housing Opportunity Through Modernization Act of 2016, was approved without amendment by unanimous consent. The bill passed in the House of Representatives by a vote of 427-0 in February. The bill addresses problems facing buyers and sellers of condominiums. Specifically, the bill modifies the Department of Housing and Urban Development’s rental assistance and public housing programs, FHA’s requirements for condo mortgage insurance and the U.S. Department of Agriculture’s single-family housing guaranteed loan program. Among other things, the bill requires the FHA to make recertifications “substantially less burdensome,” while lowering the ownership-occupancy requirement from 50 percent to 35 percent. The current ...


July 15, 2016 - Inside FHA/VA Lending

Is an FHA Premium Cut Imminent? Lost Revenue Could Be a Factor

With the improvement in loan performance, credit quality and serious delinquency rate, some mortgage industry observers think the FHA is poised for another premium reduction before the end of the year. It is a better time for the Mutual Mortgage Insurance Fund, with fiscal year 2016 volume expected to exceed $220 billion, way more than the $170 billion the last independent actuarial report had predicted. Serious delinquency rates decreased in the first quarter to 5.31 percent, near the lowest level since 2008, according to FHA’s latest quarterly report to Congress. Rates for those vintages most affected by the recent economic recession (2006-2008) continue to decline. In addition, claims continue to be well below actuarial predictions – 32 percent less than predicted for the first quarter. Also, MMIF watchers are optimistic that the next actuarial report will show a higher capital cushion. According to the ...


July 15, 2016 - Inside FHA/VA Lending

GOP Critics Blast DASP Changes, Claim Move is Politically Motivated

House Republicans this week accused the Department of Housing and Urban Development of giving preferential treatment to political favorites in changes to FHA distressed asset sales. House Financial Services Committee Chairman Jeb Hensarling, R-TX, denounced changes HUD Secretary Julian Castro made to the Distressed Asset Sale Program (DASP), saying the moves help liberal special interests at the expense of private investors. Hensarling said the changes would create “preferential bidding” for certain buyers and restrict investor options. HUD expanded DASP in 2012 as a conduit for selling nonperforming FHA loans to investors with the proviso they must first help borrowers save their homes from foreclosure and foreclose only if all loan-modification options have been exhausted. Distressed note sales also helped stabilize FHA’s Mutual Mortgage Insurance Fund and have contributed more than ...


July 15, 2016 - Inside FHA/VA Lending

Ginnie Mae Production Up Sharply Across the Board in Second Quarter

Ginnie Mae issuers produced a hefty $125.42 billion of new single-family mortgage-backed securities during the second quarter of 2016, according to a new Inside FHA/VA Lending analysis of MBS data. The government-insured market continued to run hotter than the Fannie Mae and Freddie Mac sector. Ginnie MBS issuance – including FHA’s home-equity conversion mortgage program – was up 31.1 percent from the first quarter, while single-family MBS issuance by the two government-sponsored enterprises rose 26.2 percent over the same period. Excluding HECM, Ginnie issuance was up 31.5 percent in the second quarter. While FHA forward mortgages continued to be the biggest source of collateral, the VA program actually produced a bigger gain, 42.4 percent, from the first to the second quarter. VA production saw a major boost in refinance activity, up 58.4 ... [Includes four charts ]


July 1, 2016 - Inside FHA/VA Lending

Delayed Closing, Repair Rules Still Hound FHA 203(k) Program

The FHA’s 203(k) Property Repair and Rehabilitation program could use some jolt as inflexible agency guidelines, construction inexperience and closing delays continue to constrain loan growth. Origination of FHA-insured fixer-upper loans fell 10.9 percent in the first quarter of 2016 to $762.7 million from $856.2 million in the previous quarter. It was a different story year-over-year, however, as volume during the first three months rose 20.8 percent compared to volume during the same period last year. The top five FHA 203(k) lenders struggled as their combined loan production dropped 9.4 percent quarter-over-quarter and by 3.0 percent on a year-to-year basis. Their combined originations accounted for $157.5 million of total FHA 203(k) loan production for the first quarter. Purchase loans accounted for $131.0 million of rehab loans originated during the period while refinance loans totaled a ... [ 1 chart ]


July 1, 2016 - Inside FHA/VA Lending

FHA Condominium Lending Trends Downward as Activity Slows in 1Q

FHA condominium lending fell in the first quarter to $1.6 billion, down 8.6 percent from the prior quarter. The volume decline was the second in a row for the sector, when production fell 20.3 percent from the third to the fourth quarter last year. On the other hand, year-over-year volume saw a whopping 35.3 percent increase. The top 10 FHA condo lenders were dominated by nonbanks, with Quicken Loans leading the field. The only bank among the top 10 was Wells Fargo, which landed in third place with $45.3 million despite a 35.7 percent drop in condo loan originations in the first quarter. Leader Quicken Loans closed the quarter with $73.6 million, while second-ranked Freedom Mortgage Corp. clocked in with $55.6 million. Fourth-place LoanDepot originated $33.7 million in FHA condo loans, while Broker Solutions rounded out the top five category with $31.1 million. In November last year, FHA announced ... [ 1 chart ]


July 1, 2016 - Inside FHA/VA Lending

FHA Announces More Changes to DASP to Better Protect Borrowers

Investors in FHA’s distressed note sales program would be required to do more for homeowners to help them avoid foreclosure and keep their homes, thanks to improvements to FHA’s Distressed Asset Stabilization Program (DASP) announced this week by the agency. The changes appear aimed at consumer groups’ criticism of the Department of Housing and Urban Development for allowing profit-oriented investors to purchase the troubled HUD assets at a discount and flip the homes for a profit without ever helping the distressed homeowner. Although the transactions make good economic sense for investors and the government, struggling homeowners end up losing their homes without having tried any loan modification option that could have helped them avoid foreclosure. HUD launched the DASP in 2010 under pressure from Congress to help stabilize the FHA’s Mutual Mortgage Insurance Fund, which ...


July 1, 2016 - Inside FHA/VA Lending

Nonbanks’ Share of Government-Insured Market Growing Rapidly

Ginnie Mae has good reason to be concerned about rapid demographic change in its relatively small issuer community. Nonbank institutions – many of them relatively newly formed and based on nontraditional business models – are taking over the market. Nonbank issuers accounted for a whopping 69.4 percent of Ginnie’s issuance of single-family mortgage-backed securities during the first quarter of 2016. A year ago, their share was 64.6 percent. Two years ago it was 46.7 percent. With those kinds of gains on the production line, it’s not hard to see why nonbanks are claiming a growing share of Ginnie servicing outstanding. At the end of March, nonbanks owned 46.7 percent of Ginnie single-family mortgage servicing rights, up a hefty 11.5 percentage points in one year. That rate of growth can’t be accomplished just by producing new MBS because the servicing market simply doesn’t grow that fast. (Although the Ginnie market has grown significantly faster than any other segment of ... [ 2 charts ]


June 24, 2016 - Inside Mortgage Trends

FHA Should Set Criteria for Pricing, MGIC Says

A top mortgage-industry executive called for the establishment of criteria for adjusting FHA mortgage-insurance premiums to limit taxpayer exposure and allow private capital to play a larger role in the mortgage market. In a recent blog, Patrick Sinks, president/CEO of Mortgage Guaranty Insurance Corp., noted growing talk in the mortgage industry of another possible FHA premium reduction following last year’s 50 basis point cut. However, before that happens ...


June 17, 2016 - Inside FHA/VA Lending

Around the Industry

FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...


June 17, 2016 - Inside FHA/VA Lending

CA Realtors Seek Rule to Prohibit PACE Lien Seniority over FHA Lien

The California Association of Realtors renewed its push for rules addressing the proliferation of FHA-insured mortgages that have Property Assessed Clean Energy super liens. In a recent letter to Office of Management and Budget Director Shaun Donovan, the CAR requested that both FHA and the Department of Housing and Urban Development adopt policy that is consistent with the Federal Housing Finance Agency’s existing policy on PACE liens. Specifically, such a policy would prohibit the use of PACE encumbrances with a “super lien” priority over mortgage financing. The group also urged HUD to issue guidelines directing FHA lenders and servicers not to place PACE liens above any mortgage insured by FHA. The CAR expressed concern about how PACE liens might affect the FHA Mutual Mortgage Insurance Fund, which is currently recovering from years of losses. “If the ..


June 17, 2016 - Inside FHA/VA Lending

HOAs Required to Disclose VA, FHA Certification of Condo Projects

A new California law requiring condominium homeowner associations to disclose to their members whether the VA or the FHA has certified their buildings will soon take effect.Starting July 1, 2016, California HOAs will have to disclose in their annual budget report whether or not their condominium projects have been approved for VA or FHA financing. Gov. Jerry Brown, D, signed Assembly Bill 596 into law in August last year to encourage more veterans and first-time homebuyers to purchase condominiums and take advantage of the benefits of government-backed home financing. In signing the measure into law, Brown expressed hopes that condominium HOAs will step up their certification or recertification process. Assemblyman Tom Daly, D-Anaheim, author of the bill, estimates there are 28,000 condo projects in the Golden State, and only a third are FHA-certified. There are far fewer projects that are ...


June 17, 2016 - Inside FHA/VA Lending

FHA Production on a Positive Trend Despite Falling Endorsement Levels

FHA single-family forward endorsements fell by 8.0 percent in the first quarter of 2016 from the prior quarter, suggesting a continued slowing in endorsement in the latter part of 2015 and early 2016 compared to earlier quarters, according to the FHA’s latest quarterly report to Congress on the state of the Mutual Mortgage Insurance Fund. Overall though, the FHA MMIF report as well as FHA monthly production reports for March and April continued to show the very positive trends – rising volume, lower delinquencies and outstanding credit quality – that have been occurring in the FHA program since 2009. Endorsement volume for purchase and refinance loans was down to $53.5 billion during the first three months of 2016 from $58.1 billion in the fourth quarter of 2015, the MMI Fund report showed. Last year, forward endorsements soared in the second quarter and reached a record high in the ...


Poll

The yield on the benchmark 10-year Treasury fell to all-time low of 1.34% recently. How much better will originations be at your shop in the second half compared to 1H, if at all?

Better by 1% to 10%.
Better by 11% to 25%.
Off the charts better. Applications are great now.
Worse than 1H, but not by much.
A lot worse. But not sure on the damage.

vote to see results
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