Mortgage Insurance

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

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

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

RHS Seeks Comments on Proposed QM Rule, Simplified Refinancing

The U.S. Department of Agriculture-Rural Housing Service has proposed to revise regulations for the single-family housing guaranteed loan program pertaining to qualified-mortgage (QM) requirements, refinancing, principal reduction and lender indemnification. The deadline for comments is May 4, 2015.The RHS is proposing to amend its regulations to indicate that a loan with an RHS guarantee is a qualified mortgage if it meets certain requirements set by the Consumer Financial Protection Bureau. The CFPB published a QM rule, which became effective on Jan. 10, 2014. Among other things, the rule requires creditors to make a reasonable, good faith determination of a borrower’s ability to repay the mortgage loan. In addition, the rule establishes a safe harbor from liability for transactions that meet the QM requirements or, in certain cases, a rebuttable presumption of ...


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

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 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 6, 2015 - Inside FHA/VA Lending

HECM Guidance for Surviving Spouses Falls Short

Although the new rules for surviving spouses of borrowers with FHA-insured reverse mortgages address many of the issues raised by non-borrowing spouses, some questions remain unanswered, according to legal experts. The guidance in Mortgagee Letter 2015-03 provides insufficient answers to the issues it was meant to address, said Robert Couch, a partner with the Birmingham, AL, law firm of Bradley Arant Boult Cummings and former general counsel at the Department of Housing and Urban Development. Servicers should take note of those issues and seek further clarification, he said. Issued on Jan. 29, the guidance provides a way for lenders to proceed after a borrower with a Home Equity Conversion Mortgage loan dies and is survived by a non-borrowing spouse. It allows a lender to assign to HUD HECMs that are in default due to the death of the borrower, as long as certain ...


March 6, 2015 - Inside FHA/VA Lending

FHA 4Q Past-Due Rate Up; Premium Cut a Boon

The FHA bucked a decreasing delinquency-rate trend for all other types of loan by posting an increase in past-due loans during the last three months of 2014, according to the Mortgage Bankers Association’s latest national delinquency survey. On a seasonally adjusted basis, the overall delinquency rate fell 17 bps for all loan types to 5.68 percent, MBA data showed. Data compiled by the Inside Mortgage Finance Large Servicer Delinquency Index also showed a sizeable decline of 32.7 basis points in the fourth quarter from the prior quarter. The 24 servicers covered by the index had a delinquency rate of 6.34 percent in the fourth quarter, down from 7.59 percent in the same period the prior year. The IMF data are not seasonally adjusted. In contrast, the FHA delinquency rate rose to 9.73 percent in the fourth quarter, up 4 bps from the previous quarter, according to the MBA. On the other hand, loans with a ...


March 6, 2015 - Inside FHA/VA Lending

FHA Originations Down Slightly in January

FHA launched into the new year with a slight dip in forward mortgage loan originations in January from December with nonbanks leading the charge, according to Inside FHA Lending’s analysis of agency data. Lenders originated $11.8 billion in FHA-insured loans in January, a 0.7 percent decrease from December and down 3.5 percent from the prior year. FHA was charging a higher annual mortgage insurance premium of 1.35 percent for most of the month until a 50 basis point reduction, effective Jan. 26, lowered the MIP to 0.85 percent for a 30-year, fixed-rate mortgage with a five percent downpayment, and down to 0.80 percent for a similar FHA loan with more than five percent downpayment. The impact of the reduced MIP on February originations is still unclear, but most FHA lenders are expecting a boost in volume because many consumers ... [1 chart]


March 6, 2015 - Inside FHA/VA Lending

MIP Cut Could Delay Buildup of MMI Reserves

The FHA’s recent decision to reduce its annual mortgage insurance premium by 50 basis points pushes back the agency’s timeline for attaining the 2 percent capital reserve requirement by 2016 and limits private mortgage insurance companies’ ability to serve borrowers with higher loan-to-value ratios, warned MI industry representatives. Testifying before the House Financial Services Subcommittee on Housing and Insurance, Clifford Rossi, chief economist of Radian Group, said the FHA sought to justify the premium cut by saying it far exceeded the amounts necessary to cover new FHA-insured mortgages. “But this ignores the higher expected losses on earlier insured loans,” he said. Comparing lifetime premiums on current borrowers to their projected average lifetime losses is not a meaningful comparison for an insurance portfolio comprised of borrower risk profiles over book years subject to different economic scenarios, Rossi argued. Moreover, comparing premiums to average losses overlooks ...


March 6, 2015 - Inside FHA/VA Lending

DOJ, HUD-IG Continue Pursuit of Errant Lenders

The Department of Justice shows no sign of letting up in its pursuit of FHA lenders that originate improperly underwritten mortgages that later result in significant taxpayer losses. MetLife Home Loans, which is no longer in operation, became the newest addition to the government’s growing list of financial institutions that opted to settle allegations brought under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, in connection with the origination and servicing of FHA-insured mortgages. Under the agreement, MetLife will pay $123.5 million to resolve allegations that its predecessor it “[turned] a blind eye to mortgage loans that did not meet basic FHA underwriting standards,” and stuck the FHA and taxpayers with the bill when the loans defaulted. In June 2013, MetLife Bank merged into MetLife Home Loans, a mortgage finance company ...


March 5, 2015 - Inside Mortgage Finance

Private MIs Call for Supplemental or Deeper Credit Enhancements to Reduce Taxpayers’ Risk Exposure

Congress should encourage stronger credit enhancements and greater use of risk sharing to limit government exposure to mortgage losses, according to industry representatives. Testifying before the House Financial Services Subcommittee on Housing and Insurance, Rohit Gupta, president and chief executive of Genworth Mortgage Insurance, said the industry is not only highly capitalized and strongly regulated, but has a proven countercyclical credit enhancement that reduces taxpayer exposure. “We are...


February 26, 2015 - Inside Mortgage Finance

Appraisals and Property Issues Accounting For Larger Share of Mortgage-Closing Delays

Property characteristics and appraisals have accounted for an increasing share of the issues that delay closing of purchase mortgages, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Real estate agents participating in the survey cited property issues as causing 22.5 percent of closing delays in January, based on a three-month moving average. That’s up from a 16.5 percent share as recently as October. The increase appears...


February 20, 2015 - Inside FHA/VA Lending

Around the Industry

Issuer Performance Tool. Ginnie Mae expects to release its long-anticipated Issuer Operational Performance Profile system on or about Feb. 24. The IOPP system features a scorecard to measure an issuer’s compliance with Ginnie Mae standards and to compare its performance with those of its peers. Final Tier Ranking Scores. The FHA has issued a reminder that under the Tier Ranking System II (TRSII) Servicer narrative, all scored servicers – including those that have not opted out – may have their names and performance scores published on the Department of Housing and Urban Development’s Tier Ranking System page on HUD.gov at the end of each calendar year. The information is now available for review. TRSII scores servicer compliance with HUD/FHA delinquent servicing guidelines and requirements in the areas of delinquency intervention, loss mitigation based on ...


February 20, 2015 - Inside FHA/VA Lending

Ginnie Mae Servicing Up Slightly in 4Q, 2014

Ginnie Mae servicing volume gained a mere percentage point in the fourth quarter of 2014 from the previous quarter, capping a productive year for servicers of government-backed mortgages, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose by only 1.0 percent to $1.5 trillion during the last three months of 2014 from $1.4 trillion in unpaid principal balance in the first quarter, and increased 4.0 percent year over year. Four out of the top five Ginnie Mae servicers were banks, of which three experienced declines in their servicing portfolios on quarterly and year-over-year bases. The leader of the pack, Wells Fargo, closed out the year with $416.0 billion in Ginnie Mae servicing and capturing 27.8 percent of the market. Its servicing portfolio fell ... [ 1 chart ]


February 20, 2015 - Inside FHA/VA Lending

VA to Issue Final ‘Qualified Mortgage’ Rule in May

The Department of Veterans Affairs expects to have a finalized Qualified Mortgage (QM) rule by May to help clear up some issues that have arisen since the agency issued an interim final rule last spring. The VA issued the interim QM rule for comment on May 9, 2014, to define which VA loans will have QM status under the ability-to-repay (ATR) rule. Issued by the Consumer Financial Protection Bureau, the ATR rule provided temporary QM status to loans eligible for FHA insurance and guaranties by the VA and the Department of Agriculture’s Rural Housing Service. Eligible government-backed loans must be 30-year fixed-rate with no interest-only, negative amortization or balloon features. Total points and fees must not exceed 3 percent of the total loan amount for loans of $100,000 or more. Loans that meet the definition of a temporary VA-eligible QM are considered as in compliance with the ATR rule. They are designated as “safe harbor QMs,” provided they are not ...


February 20, 2015 - Inside FHA/VA Lending

Lenders Urged to Study Changes in New Handbook

FHA lenders should spend the next couple of months familiarizing their staff with the requirements in the FHA’s new Single Family Housing Policy Handbook to ensure proper implementation of the changes on June 15, 2015, according to compliance experts. The impending changes in the Single Family Handbook are complex and significant. Lenders will need proper legal guidance to navigate and understand hundreds of pages of consolidated housing policies and guidance, as well as substantive changes to FHA requirements, said K&L Gates experts in a recent analysis. The handbook is a consolidated, authoritative source of single-family housing policy and is meant as a one-stop resource for FHA lenders. It gathers and streamlines all FHA requirements, which are currently spread throughout various handbooks, mortgagee letters and other documents, making it easier for lenders to ...


February 20, 2015 - Inside FHA/VA Lending

Tech Issues Delay HECM Financial Analysis Rule

The FHA has delayed the effective date of new guidance that will require reverse mortgage lenders to perform a financial assessment of applicants for a Home Equity Conversion Mortgage. The FHA indicated that the change was necessary to allow vendors and the Department of Housing and Urban Development to align their respective software before the new system can be operational. Those familiar with the technology said delivering the required system enhancements should not take long. The FHA said a new effective date should be expected within 30 to 60 days of the original March 2 effective date. It will be announced in a new mortgagee letter, the agency added. The new guidance requires lenders to evaluate HECM borrowers’ willingness and capacity to meet their obligations and to comply with program requirements. “Financial assessment” means doing a much more ...


February 19, 2015 - Inside Mortgage Finance

Private MIs Lose Some Ground to Government Programs in 2014, But End Year With Solid Gains

Private mortgage insurers ended 2014 in better financial shape and with a stronger market position than a year earler, although new business volume fell sharply in the fourth quarter, according to a new Inside Mortgage Finance analysis and ranking. Private MIs reported $46.94 billion in new insurance written during the fourth quarter of 2014, a figure that could change slightly when National MI releases its earnings after Inside Mortgage Finance goes to press. Our estimate for the firm is based on volume trends reported by its competitors. While private MI business was down 12.5 percent in the fourth quarter, total mortgage originations fell...[Includes three data charts]


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The Supreme Court recently decided that mortgage loan officers are entitled to overtime pay. How has this affected your shop?

It's a very big deal, but our company will limit OT pay or pay very little.
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