FHA Programs

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

June 26, 2015 - Inside FHA/VA Lending

Handbook FAQs Hold No Surprises, But More Guidance Expected

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

June 26, 2015 - Inside FHA/VA Lending

WA Regulators Accuse Quicken Loans of False VA Loan Advertising

Financial institution regulators in Washington state have charged Quicken Loans with using false, deceptive and misleading advertisements to target veterans and active military members with adjustable-rate refinance offers. According to a complaint filed by the Division of Consumer Services of the Washington State Department of Financial Institutions, Quicken Loans falsely implied in its direct mailings that it is associated with the Department of Veteran Affairs. The VA provides guarantees to fixed- and adjustable-rate mortgage loans to veterans and servicemembers through the agency’s Home Loan Guaranty program. Quicken Loans allegedly used graphics in its 5/1 ARM solicitations that resembled the seal of the VA, with the words “Governed By: United States Veterans Department.” In addition, the Michigan-based lender allegedly used an ...

June 26, 2015 - Inside FHA/VA Lending

FHA Jumbo Originations Rise in 1Q, Purchase Loans Fuel Increase

FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]

June 26, 2015 - Inside FHA/VA Lending

VA Jumbo Securitization up in 1Q, 2 States Account for Over 55%

Ginnie Mae securitized $6.6 billion of VA jumbo loans in the first three months of 2015, up 15.9 percent from the prior quarter, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Jumbo loans – single-family mortgages with loan amounts exceeding $417,000 – comprised 18.7 percent of total VA originations in the first quarter. VA jumbo originations outpaced FHA jumbo production, which totaled $2.8 billion in the first quarter, up 17.0 percent from the prior quarter, according to the Inside Mortgage Finance database. VA jumbos in Ginnie mortgage-backed securities issued in the first quarter included modified VA loans as well as those originated in Alaska, Guam, Hawaii and the U.S. Virgin Islands. Wells Fargo ranked first among securitizers of VA jumbos in the first quarter, with $1.3 billion in production. Second-ranked Freedom Mortgage conveyed $652.7 million in ... [ 1 chart ]

June 18, 2015 - Inside Mortgage Finance

Regulators Revise Flood Insurance Rules for Residential Mortgages, Set Escrow and Force-Placement Requirements

Federal financial institution regulators have approved a long-anticipated final rule that revises mandatory flood-insurance and escrow requirements as well as force-placed provisions. The Federal Deposit Insurance Corp. board of directors adopted the final rule unanimously. It combines two proposed rules issued in 2013 and 2014 that would implement certain provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 and subsequent changes made by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). Biggert-Waters exempts...

June 18, 2015 - Inside Mortgage Finance

Mortgage Share of Home-Purchase Financing Increasing as Purchases by Investors Decline

Lenders are accounting for an increasing share of home purchase financing as investors decrease their largely cash buying. Purchases by first-time homebuyers are rising, helped by FHA financing. “First-time homebuyers rarely buy homes with cash and with their increasing participation in the housing market, we expectedly see the proportion of cash-financed transactions falling,” said Tom Popik, research director of Campbell Surveys. The non-cash share of financing for home purchases increased...

June 18, 2015 - Inside Mortgage Finance

Downpayment Standards on Conforming Purchase- Mortgages Loosen Slightly as Refi Activity Decreases

Lenders have loosened downpayment requirements on conforming purchase-mortgages as part of a shift that typically occurs when the purchase market rebounds. The move toward higher loan-to-value ratios on purchase mortgages has been gradual, but industry analysts suggest it’s part of an effort by lenders to increase volume. “As lenders need more mortgage volume, average downpayments start to drop,” said Doug Lebda, CEO of LendingTree. “More lenders are beginning to loosen their guidelines and are going after a slightly broader pool of potential borrowers.” According to the Inside Mortgage Finance MBS Database, the original LTV ratio for newly originated purchase mortgages included in mortgage-backed securities issued by the government-sponsored enterprises has...

June 12, 2015 - Inside FHA/VA Lending

FHA to Propose New Condo Policy To Ensure Compliance with HERA

The FHA plans to issue a proposed rule in the fall that would allow it to insure single-family condominium units in multifamily projects, according to the agency’s regulatory agenda for the second half of 2015. The proposed rule would cover condo units that are attached, detached, semi-detached or manufactured. It would apply as well to undivided interests in the common areas and facilities that serve the project. The proposed change would clarify and ensure lender compliance with the Housing and Economic Recovery Act of 2008. HERA moved FHA’s authority to insure single-family condominiums from Section 234 to Section 203 of the National Housing Act. However, because Section 203 does not provide the same authority for FHA, rulemaking became necessary. HERA also granted FHA the authority to issue administrative notices to convey condominium policy guidance until a ...

June 12, 2015 - Inside FHA/VA Lending

HECM Lenders Seek Clarity on Reverse Mortgage Advertisements

The National Reverse Mortgage Lenders Association is seeking guidance from the Consumer Financial Protection Bureau on how to design reverse mortgage advertisements without triggering regulatory scrutiny. Peter Bell, NRMLA president and chief executive, said he had sent a Freedom of Information Act request seeking access to the particular ads that the CFPB sought comment on in a recent study on reverse mortgage advertisements. The study found that consumers who viewed the ads were left with misimpressions about reverse mortgages. For example, consumers were confused about reverse mortgages being loans. Some thought that home-equity conversion mortgages are a “government benefit” or that they could ensure that homeowners could stay in their homes for the rest of their lives. Others complained of difficulty reading the fine print and that ...

June 12, 2015 - Inside FHA/VA Lending

HECM Production Rises in 1Q15, HMBS Issuance Going Strong

Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]

June 12, 2015 - Inside FHA/VA Lending

VA to Propose New Requirements For Appraisers, Finalize QM Rule

The Department of Veterans Affairs expects to issue a final rule establishing ability-to-repay (ATR) standards and defining a “qualified mortgage” in October, according to the agency’s regulatory agenda for the second half of 2015. Proposed in May 2014, the rule would implement provisions of the Dodd-Frank Act, which, among other things, would require the VA to define the types of loans that are QMs under the new ATR provisions of the Truth in Lending Act. VA loans that are designated as QM would have either safe-harbor protections or the presumption that the borrower is able to repay the mortgage loan, in accordance with the new ATR provisions. The final rule would not change VA’s regulations or policies regarding mortgage originations, except when lenders want to originate QMs, the VA said. A VA spokesman clarified that action dates on any particular rulemaking are not ...

June 12, 2015 - Inside FHA/VA Lending

First Tennessee’s FCA Settlement, Another Notch on FHA/DOJ Belt

First Tennessee Bank’s agreement with federal agencies to pay $212.5 million to resolve allegations of violation of the False Claims Act is the latest proof of the government’s unrelenting pursuit of FHA lenders over underwriting and quality control issues. The settlement once again demonstrates the federal government’s commitment to combat FHA fraud using the FCA to recover taxpayer losses, according to an analysis by Boston law firm Greene LLP. “[The Department of Housing and Urban Development] made a point of saying that this behavior is exactly what led to the financial crisis and housing market downturn,” Greene’s compliance attorneys said. HUD and the Department of Justice have vowed to continue to pursue and hold accountable lenders who put profits ahead of their customers and legal obligations, the attorneys added. According to the DOJ, First Tennessee, a regional bank, admitted ...

June 12, 2015 - Inside FHA/VA Lending

VA Leads FHA, Private MIs in Refis, PMIs Over Agencies in Purchases

The VA maintained a sizeable lead in first-lien mortgage refinancing over FHA and private mortgage insurers in the first quarter of 2015 but yielded to both in purchase originations during the same period. According to the Inside Mortgage Finance database, mortgage lenders originated approximately $221.0 billion of refi loans in the first quarter, a 51.4 percent increase from a revised fourth-quarter production estimate of $146.0 billion. Of first-quarter mortgages securitized by Fannie Mae, Freddie Mac and Ginnie Mae, refi loans comprised 61.4 percent, up sharply from 37.6 percent for all of 2014. VA streamline refis accounted for $20.4 billion while FHA refis made up $12.2 billion of refis pooled in agency mortgage-backed securities. FHA’s refi production jumped 57.8 percent in the first quarter. On the other hand, refi loans with private MI accounted for $14.2 billion produced during the ...

June 12, 2015 - Inside FHA/VA Lending

VA Total Originations Up in 1Q15, Growth Attributed to Awareness

Consumer education and community outreach by lenders have kept VA originations on an upward trend in the first quarter of 2015, according to Inside FHA/VA lenders ended the first quarter with $36.5 billion in total originations, a 5.8 percent increase from the fourth quarter of 2014 and up a whopping 86.0 percent from the same period last year. Purchase loans comprised 61.5 percent of VA loans produced during the quarter while streamlined refinance loans accounted for the rest. Seventeen lenders, including two of the top five VA producers, focused a significant portion of their first-quarter activities on refinancing. The rest either led with their purchase business or had a balanced mixof purchase and refi loans. Top-ranked Freedom Mortgage’s total originations were 90.5 percent refis, which officials attributed to lower interest rates and a robust team of ... [1 chart].

June 12, 2015 - Inside MBS & ABS

Prepayment Risk on MBS Appears to Be Declining with Higher Interest Rates, Burnout from FHA Premium Cut

A large decline in interest rates in the past year created millions of refinance opportunities for lenders, according to industry analysts. However, prepayment risk on MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae appears to be decreasing as interest rates increase. As of the end of April, 7.0 million borrowers were likely to both qualify for and benefit from refinancing, according to Black Knight Financial Services. That was up from 4.5 million potential refi borrowers a year ago as interest rates on 30-year fixed-rate mortgages declined by 70 basis points in that time, according to Freddie’s Primary Mortgage Market Survey. “This is...[Includes one data table]

June 11, 2015 - Inside Mortgage Finance

Home-Equity Lending Tapered Off in Early 2015, But New HELOC Commitments Tick Higher

Americans were too busy refinancing and shoveling snow to get new home-equity loans during the first quarter of 2015, a new Inside Mortgage Finance analysis reveals. Mortgage lenders did an estimated $19.5 billion of home-equity lending during the first three months of 2015, based on new commitments for home-equity lines of credit – by far the most active part of the HEL market – plus originations of closed-end seconds. That was down 7.1 percent from the fourth quarter of last year. Despite the slowdown in the first quarter, home-equity production was...[Includes three data tables]

June 4, 2015 - Inside Mortgage Finance

Refinancing Dominated First-Quarter Originations, But Purchase Market Has Started Coming Back

Refinance lending fueled the growth in mortgage originations during the first quarter of 2015, although new data suggest that the purchase-mortgage sector is taking hold. Mortgage lenders originated an estimated $221.0 billion of refi loans during the first quarter, an increase of 51.4 percent from a revised fourth-quarter production estimate of $146.0 billion. Inside Mortgage Finance refi and purchase-mortgage estimates for all four quarters of 2014 were revised to reflect just first-lien mortgage originations. Refi loans accounted...[Includes three data tables]

May 29, 2015 - Inside FHA/VA Lending

VA Loan Servicers Told to Use Only VRM Quotes to Avoid Confusion

VA loan servicers are now required to request a redemption quote from the agency’s property management contractor, Vendor Resource Management (VRM), to avoid any confusion in the future about such quotes. In recently issued guidance, the VA established standard procedures for redeeming VA property, after foreclosure, in states that allow “statutory redemption.” Statutory redemption refers to a borrower’s right to regain ownership of his or her home that has been foreclosed. Statutory redemption laws allow the borrower a limited amount of time to redeem their property if they are able to buy it back at the price for which it was sold at foreclosure. The redemption window varies by state and ranges from 30 days to 2 years. At the time of redemption, the entire underlying mortgage debt plus interest, foreclosure fees and other costs are due. In most cases, the servicer has ...

May 29, 2015 - Inside FHA/VA Lending

VA Clarifies Treatment of Same- Sex Home-Loan Applications

The Department of Veterans Affairs has issued a policy clarifying that VA lenders must treat veterans in same-sex or opposite-sex marriages equally and fairly when processing and underwriting their home-loan applications. The policy is effective immediately. Under the new policy announced on May 19, the VA will process all claims and applications involving same-sex marriages in the same manner as claims and applications based on opposite-sex marriages, “without any additional scrutiny or development.” Language on VA forms, web pages and other VA communication materials will be revised to ensure that all veterans, VA program administrators and personnel are aware of the equal-treatment policy. The new instructions require VA lenders to accept a claimant’s or an applicant’s assertion of ...

May 29, 2015 - Inside FHA/VA Lending

Court Denies Relator Standing in Whistleblower Suit Against Bank

Whistleblowers that bring a False Claim Act claim against an FHA lender based on previous publicly disclosed information have no standing, according to a recent federal district court ruling. Judge Jack Zouhary of the U.S. District Court for the Northern District of Ohio dismissed an FCA lawsuit against U.S. Bank because the whistleblower had neither direct nor independent knowledge of the bank’s alleged false claims – two basic requirements for standing in a whistleblower suit. The Advocates for Basic Legal Equality (ABLE), an Ohio-based legal aid group, filed an FCA lawsuit against U.S. Bank for allegedly disregarding and violating FHA regulations. The group accused the bank of filing false claims and collecting payments without evaluating loss mitigation alternatives before foreclosing on properties. According to ABLE, it had consulted with “many people,” whose mortgage loans were ...

May 29, 2015 - Inside FHA/VA Lending

Streamline Refis Power VA-Backed MBS, FHA Up in Most States

Security issuances backed by VA loans totaled $35.5 billion in the first quarter of 2015, with VA streamline refinance loans accounting for 57.7 percent, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Approximately $20.5 billion in VA interest rate reduction refinancing loans were securitized during the first three months as borrowers took advantage of lower interest rates. “For the last three to four months, rates have been bottoming out again, and if rates are lower it makes sense to refinance,” said Jon Shrum, vice president of Commerce Home Mortgage, a VA-certified lender in Huntington Beach, CA. An estimated $14.5 billion in VA purchase mortgages also were securitized during period. VA loans comprised 13.1 percent of all loans in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities. California, Virginia, Texas, Florida and Washington, ... [2 charts]

May 29, 2015 - Inside FHA/VA Lending

FHA Proposes Clarification of DE Rules but Industry Seeks More

An FHA proposal aimed at clarifying loan-certification rules is a step in the right direction but it needs more work, according to industry observers. Lenders declined to comment on the proposed form changes but they all agree that the proposal does not go far enough. The revisions aim to make the language in Form 92900-A (HUD Addendum to Uniform Residential Loan Application) clearer for both borrower and lender. Applicants for an FHA or a VA loan sign the addendum to certify to the government that the information provided by the borrower on the mortgage loan application is correct. By signing the addendum, the borrower certifies that he or she will make payments on the home loan or become indebted to the federal government upon failure to repay the loan. For lenders, signing the form certifies that the loan application meets all of FHA’s insurance requirements. This is where lenders often ...

May 21, 2015 - Inside Mortgage Finance

Nonbank Gains in Market Share Boost Warehouse Lending; a Strong Refinance Market Helps Too

Warehouse banks increased their commitment levels to $40 billion at the end of the first quarter, a 14.3 percent sequential gain and a sign that all is well in residential originations, at least for now. Not only did warehouse providers benefit from stronger originations in early 2015, their business was boosted by the fact that nonbanks continue to gain origination market share. Compared to the same quarter a year ago, commitments are up a mouth-watering 42.9 percent, according to exclusive survey figures compiled by Inside Mortgage Finance. Then again, at $360 billion, the first quarter of 2015 was...[Includes one data table]

May 21, 2015 - Inside Mortgage Finance

Refi Surge in Conventional-Conforming Market Helped Fuel Originations Uptick in Early 2015

The conventional-conforming sector led the mortgage market’s surge in production volume during the first quarter of 2015, according to a new Inside Mortgage Finance ranking and analysis. Lenders originated an estimated $207 billion of conventional-conforming mortgages during the first three months of this year, an 18.3 percent increase from the fourth quarter of 2014. The conventional-conforming sector accounted for 57.5 percent of the $360 billion in overall mortgage originations during the period. The $360 billion is a revision of our initial estimate and does not include home-equity lending. The government and jumbo markets were...[Includes two data tables]


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