Mortgage Insurance

Browse articles from all of our Newsletters related to Mortgage Insurance.

May 21, 2015 - Inside Mortgage Finance

First-Time Homebuyer Share Up Sharply This Spring, Helped By Reduction in FHA Insurance Premiums

The first-time homebuyer share of home purchases in April hit its highest level in more than four years, according to the Campbell/Inside Mortgage Finance’s HousingPulse Tracking Survey. The purchases have been boosted by a reduction in the FHA’s mortgage insurance premiums and help rebut concerns about the demise of the first-time homebuyer. First-time homebuyers accounted for 37.6 percent of home purchases in April, up from a 34.3 percent share a year ago, based on three-month moving averages. The last time the first-time homebuyer share of home purchases was above 37.6 percent was in August 2010 at a 40.0 percent share. Tom Popik, research director of Campbell Surveys, said...


May 15, 2015 - Inside FHA/VA Lending

Borrowers Suffer in the Long Run as Servicers Try to Avoid FHA Penalties

Mortgage originators are foregoing lending to borrowers who are more likely to become delinquent to avoid strict and unrealistic FHA timelines and cost limits, according to an Urban Institute study. Results of the study, which was issued in December, were again highlighted during a recent Housing Finance Policy Center seminar on servicing at the Urban Institute in Washington, DC. Citing the study she wrote, Laurie Goodman, director of the HFPC, said regulatory uncertainty and a broken servicer-compensation model were partly responsible for tight credit. The high cost of servicing non-performing mortgages and regulatory uncertainty regarding the treatment of delinquent borrowers have made lenders apprehensive about making loans that have even a slight chance of defaulting, she said. Long foreclosure delays in judicial states, burdensome foreclosure guidelines and apparently ...


May 15, 2015 - Inside FHA/VA Lending

HUD System Failed to Identify Ineligible FHA-HAMP Partial Claims

An internal audit of the FHA/Home Affordable Modification Program’s partial-claim option uncovered flaws that cost taxpayers millions of dollars in ineligible claims. According to a recent report by the Department of Housing and Urban Development’s Office of the Inspector General, HUD’s claim-payment controls were inadequate. As a result, the agency paid more than $22 million in unsupported claims and $103,925 in ineligible claims, the report concluded. Auditors said HUD did not design and implement strong safeguards to detect and prevent improper claims. Because of the flaws, the system allowed payment of more than one claim with a modification or FHA-HAMP option in a 24-month period, the report said. In addition, auditors found duplicate claims, partial claims in excess of 30 percent of the unpaid principal balance at initial default, and non-HAMP partial claims after HUD ...


May 15, 2015 - Inside FHA/VA Lending

Mortgages Rank High Among Top Servicemember, Vet Complaints

Making mortgage payments is the most common type of mortgage complaint active servicemembers, veterans or their dependents report to the Consumer Financial Protection Bureau. A recent CFPB report on the top complaints received from military members and their families show that 24 percent were mortgage-related, second to debt collection, which accounted for the highest percentage of complaints received, 39 percent. An estimated 53 percent of servicemember complaints involved mortgage servicing related to loan modifications, collections and foreclosures. The report did not identify any specific loan, although it covered both conventional and government-backed mortgages. Complaints against servicers were mostly about failure to remove or amend derogatory credit reports accrued by servicemembers during the trial period, even though the servicemembers have successfully ...


May 15, 2015 - Inside FHA/VA Lending

Ocwen Reveals Fair-Value Charge To GNMA MSRs Due to MIP Cut

Mortgage servicer Ocwen Financial, the target of a state enforcement action for allegedly mishandling distressed borrowers, said it would delay its regulatory 10-Q filing because of an impairment charge on Ginnie Mae servicing rights. The impairment was caused by a 50 basis point cut in the FHA’s annual mortgage insurance premium, which took effect in January, the servicer said. Although it had expected a $34.4 million profit in the first quarter of 2015, Ocwen took a $17.8 million impairment charge, which included monitoring costs, “strategic advisor expenses,” and fair-value adjustments. FHA lowered the annual MIP to enable more borrowers to obtain an FHA-insured single-family mortgage loan with a 3.5 percent downpayment. Ocwen would likely lose money if it sold off its government-backed MSRs, according to one servicing advisor. Last fall, Ocwen tried to sell its ...


May 15, 2015 - Inside FHA/VA Lending

FHA Delinquency Rate Drops in 1Q, VA Delinquencies, Foreclosures Up

The FHA overall delinquency rate for single-family mortgages fell by 63 basis points to 9.10 percent on a seasonally adjusted basis in the first quarter of 2015 from the previous quarter, while VA loans recorded the only increase across all loan types over the same period, according to the Mortgage Bankers Association. Overall, mortgage delinquencies and foreclosures continued to fall in the first quarter and are now at their lowest levels since 2007, according to the MBA’s quarterly delinquency-rate survey. On a seasonally adjusted basis, the overall delinquency rate fell 14 bps to 5.54 percent from the fourth quarter of 2014, and 57 bps from one year ago, the MBA said. The serious delinquency rate – the share of mortgages that are 90 days or more past due or in foreclosure – likewise fell 28 basis points to 4.24 percent from the previous quarter and down ...


May 15, 2015 - Inside FHA/VA Lending

VA, FHA Purchase Applications Up, Refi Loan Applications Decline

The VA share of total loan applications (purchase and refinancing) for the week ending May 8, remained unchanged at 11.9 percent while FHA’s share fell to 13.8 percent from 14.0 percent the week prior, according to the Mortgage Bankers Association’s latest weekly survey of applications. VA purchase loan applications were up a smidgen, 0.2 percent, for the week while FHA purchase applications were up slightly higher, 0.6 percent. Refi applications at both agencies, however, were down for the week – 11.5 percent for FHA and 5.1 percent for VA. Meanwhile, the Rural Housing Service’s share of total applications rose to 0.9 percent as of May 8, from 0.8 percent the week prior. While there was no change in RHS’ share of refi loan applications during the week, its purchase loan applications was up 8.6 percent, a hefty increase for an agency that accounts for only a ...


May 15, 2015 - Inside FHA/VA Lending

Premium Reduction Helped Fuel 1Q Jump in FHA Loan Production

Price reduction and improving economic factors helped push FHA volume up in the first quarter of 2015, according to an Inside FHA/VA Lending analysis of agency data. Production of forward single-family mortgages insured by FHA increased by 12.3 percent in the first quarter to $39.5 billion from $35.2 billion in the prior quarter, powered by a sharp uptick in refinances. FHA’s total refi business jumped from $2.29 billion in endorsements in February, a month of record snowstorms in the Northeast, to $8.15 billion in March. Total FHA forward-mortgage business rose by 83.8 percent from February, data showed. FHA streamline refis rose a whopping 144.1 percent quarter-over-quarter while conventional-to-FHA refis jumped 29.2 percent over the same period. Falling purchase loan volume, which was the reason for the overall decline in FHA originations last year, spilled over into ... [2 charts]


May 14, 2015 - Inside Mortgage Finance

CFPB May Review Lender-Paid MI as Pricing Gets More Competitive. But Who’s at Risk Here: MIs or Lenders?

It’s no secret that pricing on lender-paid mortgage insurance policies has come down over the past several months and now it appears the Consumer Financial Protection Bureau may take a look at what’s going on behind the curtain. According to industry officials who claim to have knowledge of the situation, the powerful consumer regulator may focus on whether there is some kind of quid pro quo going on between lenders and mortgage insurers. In particular, the agency may look...


May 14, 2015 - Inside Mortgage Finance

Government Mortgage Insurance Programs Make a Run on Private MIs; First-Timers Shifting the Scales

The volume of new mortgage originations with primary mortgage-insurance coverage held steady during the first quarter of 2015, but there was a noticeable shift toward the government MI programs, according to a new Inside Mortgage Finance analysis and ranking. Private mortgage insurers wrote coverage on $45.24 billion of new conventional originations during the first quarter, a 5.3 percent decline from the fourth quarter of last year. But FHA and Veterans Administration loan originations were up over the same period, by 5.5 percent and 6.0 percent, respectively. Based on Ginnie Mae securitization data, the volume of new rural-housing loans insured by the Department of Agriculture fell...[Includes three data charts]


May 1, 2015 - Inside FHA/VA Lending

Analysts Caution MIs Against Premature Forays into FHA Arena

The reduced capital requirements for certain vintage mortgages under recently issued financial standards for private mortgage insurers might embolden MI companies to step up competition with the FHA, according to a new Barclays Research analysis. Such a move, however, would be bad for private MIs at this time, Barclays analysts warned. Buoyed by the changes in the final Private Mortgage Insurer Eligibility Requirements (PMIERs), MI firms could attempt to steal away market share from FHA by going after the agency’s traditional base, the lower-FICO borrower segment. “Such a move would entail significantly more credit risk, something the MI companies may not be comfortable with just a few years after the recent housing downturn,” said analysts. In addition, analysts estimated that return-on-equity after taxes on the lower FICO cohorts are already below the MI’s targeted ...


May 1, 2015 - Inside FHA/VA Lending

FHA Enhances Ability to Deliver Adverse PETR Notices to Lenders

The FHA has automated the delivery of notices to targeted lenders that receive an “unacceptable” rating following a post-endorsement review of a sample of their FHA-insured mortgage loans. The agency’s notification process shifted from manual to electronic effective on April 27, with the deployment of a new automated system for delivering notices of unacceptable findings, or eFindings letter. The change speeds up the process of determining whether a direct-endorsement lender should be subject to an indemnification request from FHA because of faulty underwriting. The enhanced delivery process will make it easier for lenders to do business with the FHA, the agency said. The post-endorsement audit is crucial to the success of the FHA’s direct-endorsement program. The FHA performs a post-endorsement technical review (PETR) on selected cases to evaluate the risk loans pose to ...


May 1, 2015 - Inside FHA/VA Lending

VA to Repair Defect in Processing Transfers of Property Custody

The Department of Veterans Affairs has found a defect in “transfer of custody” (TOC) processing, wherein TOC reports are being rejected when submitted to the agency. The reports are not being accepted apparently because servicers are not filling out the “Date of Confirmation/Ratification of Sale” fields, the agency said. Servicers have 15 days after loan termination to report if they want to transfer custody of a foreclosed property to the VA. Loan termination for a foreclosure and loan termination for a deed-in-lieu of foreclosure are defined separately under VA rules. The VA said the defect will be fixed once the agency’s VALERI (VA Loan Electronic Reporting Interface) Manifest 3.4 is released in June. VALERI 3.4 comes in the wake of VALERI 3.3, which the VA deployed on April 11, 2015. The updated version included a revised description of a ...


May 1, 2015 - Inside FHA/VA Lending

Grassley Seeks HUD’s Explanation For Controversial Appointments

Sen. Chuck Grassley, R-IA, chairman of the Senate Committee on the Judiciary, has asked the Department of Housing and Urban Development to explain the duties and functions of two officials who were appointed as “principal deputy assistant secretary.” The appointments make it appear that HUD is deliberately circumventing the nomination process by creating new official titles for appointees without obtaining Senate confirmation, said Grassley. If that is the case, HUD Secretary Julian Castro may be in violation of the Vacancies Reform Act of 1998, the lawmaker warned. The statute provides several mechanisms to fill job positions that require candidates to be nominated by the President with the advice and consent of the Senate. “The Vacancies Act also declares that those mechanisms are the exclusive means of filling vacancies,” Grassley said. “Creating new job titles is not ...


May 1, 2015 - Inside FHA/VA Lending

FHA Announces 90-Day Delay in SF Policy Handbook Effective Date

The FHA Single-Family Policy Handbook’s effective date has been changed from June 15 to Sept. 14, 2015, the agency has announced. The affected sections include the following: Doing Business with FHA – Lenders and Mortgagees; Doing Business with FHA – Other Participants – Appraiser; and Quality Control, Oversight and Compliance. The section for Origination through Post Closing/Endorsement (OTPC/E) becomes effective for FHA case numbers assigned on or after Sept. 14. All applicable existing single-family handbooks, mortgagee letters and policy documents continue to apply until the OTPC/E section becomes effective, the agency said. A number of competing initiatives prompted the change of effective date. The FHA expects lenders to be fully compliant by Sept. 14. The FHA will continue to issue mortgagee letters periodically to ...


May 1, 2015 - Inside FHA/VA Lending

FHA Jumbo Volume Suffers Steep Decline in 2014 as Activity Slowed

FHA jumbo loan production dropped significantly in 2014, according to an Inside FHA/VA Lending analysis of agency data. The volume of jumbo loans insured by the FHA – loan amounts exceeding $417,000 up to the national ceiling of $625,500 – fell 41.9 percent from the prior year, and 4.4 percent in the fourth quarter of 2014 from the previous quarter. FHA jumbo production for 2014 totaled $10.5 billion, with purchase loans accounting for nearly 80 percent of volume and fixed-rate loans comprising 87.1 percent of jumbos originated last year. Seventy-two percent of lenders saw their jumbo volume decline, including Provident Savings Bank, which suffered the largest year-over-year drop (84.9 percent). An analysis of FHA endorsements by loan amount show that loans above $417,000 up to $499,000 accounted for 2.12 percent of loans endorsed in the first quarter. Additionally, loans from $500,000 to ... [1 chart]


May 1, 2015 - Inside FHA/VA Lending

Quicken Lawsuit Can Help Clarify FHA Rules, Government Use of FCA

Quicken Loan’s lawsuit against the government could help provide some certainty to lenders as to the proper legal standard for evaluating compliance with FHA rules and whether loan sampling is a permissible post-endorsement review strategy, according to legal experts. The adjudication of Quicken’s case against the Department of Justice in a public forum should clarify FHA policies, procedures, and the degree of future liability risks, experts said. Quicken Loans, the top FHA lender in 2014, sued the Department of Justice in federal court in Detroit April 17, accusing it of high-pressure tactics to admit wrongdoing and of using a small sample of flawed loans as a basis for claims under the False Claims Act. Up to that time, Quicken Loans had been the subject of an ongoing DOJ probe, which began three years earlier, in relation to its FHA lending practices. Quicken also asserted that, before filing its lawsuit ...


May 1, 2015 - Inside MBS & ABS

Analysts Expect New PMIERs Rules to Have No Material Impact on GSE Issuance, Prepayments

New capital requirements for private mortgage insurers are a positive for the industry and should not cause a big change in MI premiums, high loan-to-value prepayments or net issuance of conventional MBS, according to a new analysis from Barclays Research. The reason for analysts’ optimism is that the effective rate for conventional conforming mortgages with private MI has been more attractive than on an FHA loan for borrowers with FICO scores above 700 and original LTVs of 80-95 percent. The opposite has been true for borrowers with low FICO scores. Consequently, issuance of conventional loans over the past year has largely favored...


April 30, 2015 - Inside Mortgage Finance

Quicken Loans Ponders Future As FHA Lender After DOJ Answers Its Preemptive Suit With FCA Complaint

Quicken Loans said it will be evaluating whether it should continue participating in the FHA single-family mortgage insurance program after the federal government formally accused the lender of improperly originating and underwriting mortgages that cost the FHA losses in paid claims. The Detroit-based mortgage lender two weeks ago took the unprecedented step of filing a lawsuit against the government for alleged harassment in what it deemed a long-running fishing trip to drum up charges against the company. Last week, the empire struck back. The Department of Justice filed...


April 30, 2015 - Inside Mortgage Finance

Mortgage Origination Volume Picked Up Speed In Early 2015; Most Lenders Report Solid Gains

Mortgage lenders originated an estimated $370.0 billion of first-lien home loans during the first three months of 2015, lifting the market to its strongest quarterly volume since the third quarter of 2013, according to a new Inside Mortgage Finance analysis and ranking. The first-quarter total originations estimate does not include home-equity lending, which many lenders consider a separate business from traditional mortgage lending. In the past, Inside Mortgage Finance included home-equity in total originations, and those market estimates are not being revised. In 2014, about 5.7 percent of total originations ($71.0 billion) were home-equity loans. A number of survey participants have reported...[Includes two data charts]


April 24, 2015 - Inside The GSEs

CU Integrated Into Other Quality Control Tools

In an ongoing attempt to offer lenders more clarity and reduce buybacks, Fannie Mae has taken its new Collateral Underwriter program to the next phase and integrated it with other loan-processing systems. After introducing Collateral Underwriter in January, Fannie announced on April 20 that it incorporated the tool with Desktop Underwriter, an automated underwriting system, and Early Check, the company’s pre-delivery loan eligibility and data evaluation tool. The GSE said this will provide a better view of risk on a loan across multiple applications, allowing lenders to address potential issues prior to loan delivery. CU, Fannie’s proprietary appraisal analysis application that gives lenders access to analytics, public records and other data when...


April 24, 2015 - Inside The GSEs

GSEs Tout Benefit of PMIER Rules, MIs Say They Will Be Ready

The Federal Housing Finance Agency announced new changes to private mortgage insurer eligibility rules on April 17 and the GSEs said the revisions will play a role in helping to reduce the risk to taxpayers by making sure the MIs are financially and operationally strong. During the financial crisis, some MIs couldn’t fully pay their claims, resulting in losses to the GSEs and taxpayers. The FHFA hopes the revised requirements will help lessen the chances of falling back into the same boat should there be another crisis. United Guaranty, the highest-rated GSE-approved mortgage insurer, said PMIER revisions are “a critical and necessary step that will allow the entire mortgage insurance industry to move forward by incorporating lessons learned during the financial crisis.”


April 23, 2015 - Inside Mortgage Finance

A Growing Concern for Fannie, Freddie and The FHFA: Lender-Paid Mortgage Insurance

With private mortgage insurance eligibility requirements now a done deal, the MI industry may have a new headache on its hands: concerns from Fannie Mae and Freddie Mac – and their regulator – about the discounting of lender-paid MI policies. Industry officials familiar with the LPMI issue have been telling Inside Mortgage Finance for weeks that the government-sponsored enterprises are taking a close look at the product. Although the Federal Housing Finance Agency declined to discuss LPMI, a spokesman for Freddie Mac offered...


April 23, 2015 - Inside Mortgage Finance

Private MIs Say They’re (Mostly) Ready for New GSE Eligibility Rules, Or They Will Be

The Federal Housing Finance Agency late last week announced a few changes to new private mortgage insurer eligibility rules that were first proposed in July 2014, and the private MI industry appears mostly ready for them. “The new PMIERs are really designed to promote the counterparty strength of private mortgage insurers. We feel like this will strengthen the industry,” said Gina Haly, Freddie Mac’s vice president in the mortgage insurance and risk transfer counterparty credit division. During the financial crisis, some MIs couldn’t fully pay...


April 16, 2015 - Inside Mortgage Finance

GSEs Securitized Smaller Volume of Private MI-Insured Mortgages During Refinance-Heavy 1Q15

Fannie Mae and Freddie Mac securitized $43.28 billion of single-family loans covered by private mortgage insurance during the first quarter of 2015, according to a new Inside Mortgage Finance analysis and ranking. First-quarter PMI business was down 7.7 percent from the fourth quarter of 2014, although overall mortgage-backed securities issuance by the two government-sponsored enterprises was up 5.9 percent over the same period. All of the increase ... [Includes two data charts]


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