FHA, VA

Browse articles from all of our Newsletters related to FHA, VA.

April 17, 2015 - Inside FHA/VA Lending

VA Servicing Sector is Growing, While FHA Market Shrinks

The outstanding supply of VA home loans in Ginnie Mae pools continued to grow during the first quarter of 2015, climbing 2.9 percent from the end of last year, according to a new Inside FHA/VA Lending analysis of loan-level mortgage-backed securities disclosures. Meanwhile, the supply of FHA loans in Ginnie pools fell 0.5 percent during the first quarter. Similarly, FHA loans in Ginnie MBS declined by 2.2 percent from the first quarter of 2014 while VA loans ... [Includes three data charts]


April 10, 2015 - Inside The GSEs

HUD Secretary: Alternative Credit Scoring Models on FHA's Radar

The GSEs aren’t completely committed to adopting new credit scoring models just yet, but it is on their radar. When asked about the possibility of alternative credit scoring, spokesmen for both Fannie Mae and Freddie Mac pointed to the 2015 Conservatorship Scorecard which stated that they will be assessing the feasibility of alternate credit score models and credit history in loan-decision models. Housing and Urban Development Secretary Julian Castro, who spoke at a credit access symposium in Washington last week, said that the FHA is exploring new ways to determine the creditworthiness of consumers to increase access to mortgage lending. Housing industry leaders in attendance said Fannie Mae, Freddie Mac and other mortgage lenders could increase access....


April 3, 2015 - Inside FHA/VA Lending

Around the Industry

Fannie Mae Updates Reverse Mortgage Loan Servicing Manual. Fannie Mae has updated its reverse mortgage servicing manual with changes and clarifications to policies pertaining to Home Equity Conversion Mortgages. For HECMs, Fannie now requires servicers to place a real estate-owned hazard insurance policy upon completion of a foreclosure sale. It also outlined servicers’ responsibilities regarding the documentation and cancellation of REO hazard insurance claims; reimbursement of REO hazard insurance premiums; and remittance of insurance loss proceeds. The revised policy changes must be implemented no later than April 1, 2015. House Democrats Reintroduce Housing Finance Reform Bill. Democrats on the House Financial Services Committee have introduced legislation that would provide private and government risk-share coverage to all mortgages, create a ...


April 3, 2015 - Inside FHA/VA Lending

VA Spells Out New Process for Disputing Reconveyance Decisions

VA mortgage servicers disputing a final reconveyance decision must submit the information themselves to the Department of Veterans Affairs, not the foreclosure attorney, according to new guidance issued by the agency. The new policy became effective on March 13, 2015, and spells out the process for a servicer to dispute a final reconveyance decision. Reconveyance is the transferring of a clean property title to a buyer after a secured debt, such as a deed of trust or mortgage, has been paid in full. The VA developed a reconveyance dispute process with Vendor Resource Management, a real estate asset management company, to address servicer disagreements pertaining to the reconveyance of an asset. Servicers are now required to complete and submit information regarding reconveyance disputes to VRM via email. Disputes must be received directly from ...


April 3, 2015 - Inside FHA/VA Lending

FHA Deploys Long-Anticipated E-Delivery System for Appraisals

Beginning June 27, the FHA will require electronic appraisals for single-family forward and reverse mortgages to be delivered through an online electronic submission portal prior to endorsement. The Electronic Appraisal Delivery (EAD) portal is a web-based platform that would allow paperless submissions of single-family home loan appraisals, cutting down loan processing time significantly. FHA lenders and their authorized representatives can access the EAD portal by using electronic credentials and showing they are ready to use the new technology. Only appraisals that are compliant with FHA appraisal and data delivery guidelines can be uploaded to the portal. Lenders will be notified of a successful upload or if they need to correct and resubmit an appraisal. Once an appraisal is successfully submitted to the portal, FHA Connection will pull EAD appraisal data and pre-fill certain data fields in the ...


April 3, 2015 - Inside FHA/VA Lending

VA to Revisit Residual-Income Guidelines, Eyes New Rules in 2016

The Department of Veterans Affairs is updating its residual-income tables, with an eye to publishing revised guidelines in 2016. The last time the VA calculated and published the residual-income guidelines was in the 1990s, and a lot has changed since then, according to Mike Frueh, director of the VA Home Loan Guaranty program. Residual income is the monthly household income that remains after all primary obligations – mortgage and escrows, car payments, credit card bills, student loans, among others – have been paid. VA will not back a loan to a vet or service member if they do not meet or exceed residual-income requirements. The residual-income threshold varies by family size, borrower location and other compensating factors. Calculations for residual income vary for the Northwest Region, Midwest Region, South Region and West Region of the country. Frueh said they are ...


April 3, 2015 - Inside FHA/VA Lending

FHA Lenders Agree to Pay $36.4 Million to Settle DE Allegations

The Department of Housing and Urban Development’s Office of the Inspector General has finalized settlements with two direct endorsement lenders to resolve allegations of violating FHA underwriting requirements. Golden First Mortgage Corp. and Group One Mortgage agreed to pay a total of $36.41 million to the federal government in reparation for losses incurred by the FHA on the defaulted loans. Based in Great Neck, NY, Golden First, a privately held company, and its owner/president, David Movtady, allegedly falsely certified to FHA and HUD that the loans the company endorsed for insurance met all FHA requirements. This went on from 2002 through 2010, the OIG alleged. The OIG accused the company and Movtady of violating the False Claims Act, which prohibits acts to defraud the federal government and which has been instrumental in ...


April 3, 2015 - Inside FHA/VA Lending

Golding Appointment as FHA Chief Raises Eyebrows on Capitol Hill

The unusual appointment of a senior advisor to replace Acting FHA Commissioner and Assistant Secretary of Housing Biniam Gebre is causing Republicans to sit up and take notice. Last week, Housing and Urban Development Secretary Julian Castro tapped Edward Golding to head the FHA, not in an acting capacity, but as a “principal deputy assistant secretary.” The new title grants Golding broad powers to manage the FHA’s daily operations but does not come with the full authority of an FHA commissioner. For example, Golding is restricted from issuing final rules or notices of funding availability. He may not endorse mortgages for insurance that exceed $50 million, such as loans for hospitals and other multifamily structures. Moreover, it is unclear how much enforcement power Golding can wield. More interestingly, however, the process that facilitated Golding’s appointment allows ...


April 3, 2015 - Inside FHA/VA Lending

VA to Continue Streamlining Appraisal, Servicing Processes

The Department of Veterans Affairs will continue removing barriers to delivering home-loan benefits to veterans and service members in 2015, focusing more on further improvements in appraisal and servicing. “It’s going to be geared around improving on the things we have already done,” said Mike Frueh, director of the VA Home Loan Guaranty program. VA loan originations are on the upswing and the agency wants to maintain the trend by getting more vets and active-duty personnel into the program. Last year, 18 percent of VA loans were to active-duty service members and 82 percent to veterans. Frueh said the VA program is by far the better deal. Interest rates are lower on a VA loan than on conventional loans and, generally requires no downpayment, he noted. In addition, VA loans do not have mortgage insurance. Based on the volume of VA loans originated in 2014, veteran borrowers ...


April 3, 2015 - Inside FHA/VA Lending

Ginnie MBS Issuance Fall Slightly In 1Q Due to Slight Drop in FHA

Ginnie Mae mortgage-backed securities issuance fell in the first quarter of 2015 with FHA volume slipping during the period, according to an Inside FHA/VA Lending’s analysis of agency data. Ginnie MBS production in the first quarter totaled $79.8 billion, down from $80.6 billion in the 4Q14, despite a 29.3 percent increase from February to March. On the other hand, production was up 41.6 percent from a year ago. FHA-backed Ginnie MBS issuance dropped 3.1 percent in the first quarter from 4Q14, ending the period with $39.9 billion. Year-over-year volume rose 22.0 percent from the previous year. On the other hand, refinancing increased to $12.3 billion from $7.8 billion during the same stretch. VA securitization totaled $35.5 billion, up from $33.6 billion quarter-over-quarter, powered by refinance loans. Rural housing securitization totaled $4.2 billion in the first quarter, down from $5. 7 billion in 4Q14. Securitized FHA purchase loans rose 7.7 percent in March from February, while ... [3 charts].


April 2, 2015 - Inside Mortgage Finance

FHA Open to New Credit Scoring Models To Boost Access to Mortgage Financing

In efforts to expand mortgage access and get more homeowners in the door, Housing and Urban Development Secretary Julian Castro said the FHA is looking into alternative credit scoring models. Speaking at a credit access symposium at the National Association of Realtors this week in Washington, DC, Castro said, “We want to make it more affordable, realistic and more feasible for folks to become homeowners.” He acknowledged...


April 2, 2015 - Inside Mortgage Finance

Small Rating Agency Downgrades MGIC, Industry Analysts Doubt FHA Premium Cut, PMIERs Will Yield Ratings Actions

Most analysts are confident that private mortgage insurance companies will not see their ratings downgraded due to increased competition from the FHA as well as new capital requirements for private MIs proposed by the Federal Housing Finance Agency. But Zacks Investment Research, a research firm that ranks and rates investment products for investors, went against the grain and downgraded MGIC Investment Corp. by two notches due exactly to those reasons. While private MIs have been gaining market share in the last couple of years, Mortgage Guaranty Insurance Corp. and its business competitors will find...


April 2, 2015 - Inside Mortgage Finance

FHA Recaptures Few of Its Refinances; Cut in Annual Premium Could Help

The percentage of FHA borrowers refinancing their mortgage into another government loan has fallen through the floor the past two years, with all indications pointing to a rule change that prevents mortgage insurance from being cancelled over the life of the loan. Of course, increases in premiums haven’t helped either, but thanks to a January reduction in the annual FHA premium of 50 basis points, at least some of that business is coming back to the agency. “The life-of-the-loan issue is...


April 2, 2015 - Inside Mortgage Finance

Golding’s Appointment as FHA Chief Raises Eyebrows for Not Going Through Formal Senate Confirmation Process

Department of Housing and Urban Development Secretary Julian Castro has named one of his senior advisors, Ed Golding, as principal deputy assistant secretary temporarily in charge of HUD’s Office of Housing and the FHA. Golding is currently with the Office of Policy Development & Research and will assume his new post April 7. His appointment, however, has raised a few eyebrows on Capitol Hill because it had not gone through formal Senate confirmation, which some lawmakers say could get HUD in hot water. Golding, a former senior economist at Freddie Mac, is replacing...


March 27, 2015 - Inside MBS & ABS

Mortgage Lenders Take Issue with Basel III Credit Exposure Risk Weights, Capital Floors Framework

The Mortgage Bankers Association took issue this week with two proposals pending before the Basel Committee on Bank Supervision that could have negative repercussions on U.S. mortgage financing and on American homebuyers. Back in December, the Basel Committee put out a “consultative document” that included proposed revisions to its Standardized Approach for credit risk, including updated risk-weight calibrations. As applied to the U.S. ...


March 26, 2015 - Inside Mortgage Finance

FHA’s Loan Sales Resolve Large Share of Problem Loans, Help More Borrowers Avoid Foreclosure

Nearly half of the troubled loans that were sold through the FHA’s single-family loan sale program have been resolved, and a significant portion of them are now re-performing, according to an agency report on the Distressed Asset Stabilization Program. Of the 48.6 percent of distressed loans that have been resolved, 43.5 percent have avoided foreclosure, the report said. The single-family loan sale (SFLS) has proven to be a borrower-friendly alternative to the ...


March 20, 2015 - Inside FHA/VA Lending

Around the Industry

Loan Modification Trial Payment Plans for Forward Mortgages. The Department of Housing and Urban Development has announced requirements for trial plan duration, required signatures, and reporting for trial payment-plan agreements, and the conditions under which FHA deems a TPP to have failed.Lenders must implement the requirements in Mortgagee Letter 2015-07 for all TPPs offered to borrowers on or after June 1, 2015. FHA Publishes Additional Sections of HUD Single-Family Policy Handbook. The FHA has published additional sections for the SF Handbook, including the following: Doing Business with FHA – Lenders and Mortgagees Doing Business with FHA – Other participants in FHA Transactions – Appraisers; Quality Control, Oversight and Compliance – Lenders and Mortgagees; Quality Control Oversight, and Compliance – Other Participants in FHA Transactions – Appraisers ...


March 20, 2015 - Inside FHA/VA Lending

Study Finds FHA Loans Cost More Than Private Mortgage Insurance

Private mortgage insurance is generally a better deal than FHA for mortgages with 90 percent or higher loan-to-value ratios, according to a new report from WalletHub, a web-based organization that monitors a variety of financial services. The report also found little variation in pricing in the private MI market based on monthly premiums charged by Genworth Mortgage Insurance Co., Mortgage Guaranty Insurance Corp., Radian Guaranty and Essent Guaranty. Of the four MIs in the study, Essent charged the highest premiums for loans with a 620-679 credit score. For all other FICO scores, the MIs charged uniform premium rates. For 97 percent LTV mortgages with a 620-679 credit score, FHA charged a cheaper monthly premium rate compared to private MIs. For 95 percent LTV and 90 percent LTV loans, the FHA charged monthly payments of $218.29 and $206.80, respectively, compared to ...


March 20, 2015 - Inside FHA/VA Lending

FHA Servicing Transfer Could Be in Spending Bill, Not in Reform Bill

The FHA’s request for authority to require specialized subservicing in certain circumstances could be included in an appropriations bill rather than in housing-related legislation, according to Sen. Jack Reed, D-RI, ranking minority member of the Senate Appropriations Subcommittee on Transportation, HUD and other Related Agencies. Reed raised the possibility during a recent hearing on the Department of Housing and Urban Development’s FY 2016 budget proposal. Among other things, the FHA has been seeking authority from Congress to require, in individual cases, inexperienced lender/servicers to transfer the function to a specialized servicer to better assist borrowers and reduce losses to the Mutual Mortgage Insurance Fund. Allowing the FHA to require transfer of servicing will help more distressed homeowners stay in their homes and avoid foreclosure, said ...


March 20, 2015 - Inside FHA/VA Lending

Advocates Say New HECM Rule is A Disaster for Surviving Spouses

Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...


March 20, 2015 - Inside FHA/VA Lending

HUD Reports Significant Progress In Distressed Loan Resolutions

Half of the loans in the Distressed Asset Stabilization Program have been resolved and a significant percentage of homeowners have avoided foreclosure, according to the latest DASP progress report from the Department of Housing and Urban Development. A review of the FHA single-family loan sale (SFLS) program found that, of the 48.6 percent that have been resolved, 43.5 percent have avoided foreclosure. The anticipated alternative for these borrowers – property conveyance, where their property becomes real estate-owned – would have led to foreclosure, the report said. Specifically, short sales and deeds-in-lieu of foreclosure were the disposition methods employed in foreclosure avoidance. In addition, 16.3 percent of resolved loans were re-performing as of Feb. 6, 2015. This reflects a 49.5 percent change in the re-performing rate reported in the ...


March 20, 2015 - Inside FHA/VA Lending

Large Coastal States Account for Bulk of FHA/VA Securitizations

Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]


March 20, 2015 - Inside FHA/VA Lending

VA Originations Increase in 4Q14, 2014 a Record Year for Purchases

Production of mortgages with a VA guaranty grew a hefty 17.9 percent in the fourth quarter, providing an emphatic ending to a record year of VA purchase-loan originations, according to Inside FHA/VA Lending’s analysis of agency data. Total VA volume for the entire year was $112.0 billion in purchase and refinance loans. VA streamlined refinancings accounted for 22.4 percent of overall VA originations for 2014. Production for the full year, however, was down 13.8 percent compared to the same period in 2013. Lenders attributed the increased VA market share to the younger generation of soldiers and sailors engaged in foreign wars as well as veterans returning from the war front. Last year, 18 percent of VA loans were made to active-duty service members and 82 percent were loans to veterans, said Mike Frueh, director of the VA Home Loan guaranty program. “There is a lot more ... [1 chart]


March 19, 2015 - Inside Mortgage Finance

Strong Expectations Heading Into Spring Home-Buying Season, Particularly for First-Timers

Real estate agents have a positive outlook for the spring homebuying season, especially first-time homebuyers, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Tom Popik, research director of Campbell Surveys, said homebuyer traffic was higher than expected during the winter and demand from first-time buyers is expected to be strong in the coming months. “Rising interest rates may stimulate the market as homebuyers ...


March 13, 2015 - Inside Mortgage Trends

FHA More Costly Than Private MI

If a borrower went shopping for a mortgage loan in 2014, he or she would have found FHA insurance costlier than private mortgage insurance even with a 20 percent downpayment, according to a new report from WalletHub, a web-based organization that monitors a variety of financial services. FHA mortgage insurance premiums have nearly doubled since 2008, when conventional loans with private MI grew scarce and FHA became the only game in town for ...


March 13, 2015 - Inside MBS & ABS

‘GSE Patch’ Covers Big Pothole in Agency MBS Production; Government Has Six Years to Fix It.

Over a fifth of the loans securitized last year by Fannie Mae, Freddie Mac and Ginnie Mae do not meet one of the key criteria of the qualified-mortgage standard that came into effect in January 2014, and instead rely on an exemption for agency loans. During 2014, the three agencies securitized $198.3 billion of home loans with debt-to-income ratios exceeding 43.0 percent, according to a new Inside MBS & ABS analysis of loan-level disclosure data. That represented 21.5 percent of total MBS issuance by Ginnie and the two government-sponsored enterprises. The Consumer Financial Protection Bureau requires...


March 12, 2015 - Inside Mortgage Finance

Jumbo Market Showed Modest Gains in 4Q14, Claimed Growing Share of New Originations

Jumbo mortgage production last year grew its share of total originations to its highest level since well before the financial collapse that launched the era of the “agency jumbo” loan. Mortgage lenders cranked out a total of $291.1 billion of home mortgages with loan balances exceeding the old conforming loan limit of $417,000. Like everything else in mortgages, jumbo production was down from 2013, by 22.4 percent. But total mortgage originations fell...[Includes three data charts]


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