An FHA servicer’s failure to communicate in a timely manner with delinquent borrowers for potential loss mitigation options exposed troubled homeowners to the risk of losing their home, according to results of an audit by the Department of Housing and Urban Development’s inspector general. The delay also may have resulted in a violation of federal and state bankruptcy laws, the inspector general’s report noted. The audit looked into Selene Finance’s servicing of FHA loans and ...

Revised forms lenders must file when submitting a mortgage loan for FHA insurance became mandatory on Aug. 1, raising hope for more lender participation in the FHA single-family mortgage insurance program without fear of liability. The improved form, HUD/VA Addendum to the Universal Residential Loan Application (Form 92900-A), eliminates the requirement that lenders certify to their compliance with all FHA requirements. The FHA first proposed changes to ...

The Department of Housing and Urban Development’s inspector general has taken its dispute with HUD over downpayment assistance to Congress, accusing FHA of steering borrowers to DPA programs with an illegal funding scheme. In a recent letter to House Financial Services Committee Chairman Jeb Hensarling, R-TX, HUD Inspector General David Montoya said premium pricing uncovered during an audit of an Arizona-based FHA lender violates federal law regarding ...

Mortgage lenders originated $48.26 billion of single-family mortgages with VA home loan guaranties during the second quarter of 2016, according to agency data provided this week to Inside FHA/VA Lending. Second-quarter volume was up 30.0 percent from the first three months of the year, with the biggest increase coming in streamlined refinancing. The VA said originations of interest rate reduction loans totaled $16.50 billion in the second quarter, up 51.6 percent ...

FHA single-family endorsement activity saw a solid 15.0 percent increase from the first to the second quarter of 2016, but the program lost market share in the red-hot primary mortgage insurance business. The FHA endorsed a total of $61.54 billion of forward mortgages during the second quarter, according to a new Inside FHA/VA Lending analysis and ranking. That brought year-to-date production to $115.06 billion, a 9.0 percent increase over ... [Includes two data charts]

Underwriting standards for jumbo non-qualified mortgages were largely unchanged in the second quarter of 2016 compared with the previous period, according to the Federal Reserve’s senior loan officer opinion survey. Some 53 respondents didn’t change their underwriting standards for the loans compared with the previous quarter, while three respondents loosened underwriting for the loans “somewhat” and two tightened somewhat. Four of the ... [Includes two briefs]

While private mortgage insurance on new non-agency mortgage originations has been minimal since 2008, some industry participants project that private MI will play a role in the non-agency mortgage-backed security market going forward. “Mortgage insurers may get more involved with the private-label market, and this may be another source of third-party oversight,” Morningstar Credit Ratings said in a recent report. “While it is too early to predict the investors’ response to ...

S&P Global Ratings upgraded servicer ratings for Ocwen Loan Servicing to average from below average this week. Ocwen’s stock price increased significantly after the upgrade because of ratings clauses in Ocwen’s subservicing agreements with New Residential Investment. S&P downgraded Ocwen’s servicer ratings in June 2015 and if the ratings weren’t raised by April 2017, New Residential could transfer the subservicing to a different company. As of the end of ...

Freddie Mac’s efforts to reduce holdings of nonprime mortgages and nonprime mortgage-backed securities are proceeding at a faster pace than efforts at Fannie Mae, according to a new analysis by Inside Nonconforming Markets. The government-sponsored enterprises had a combined $161.12 billion in nonprime holdings as of the end of the second quarter of 2016, down 6.3 percent from the first quarter and down 20.4 percent from the second ... [Includes one data chart]

Originations of non-qualified mortgages by Impac Mortgage Holdings declined in the second quarter of 2016 after rising steadily since the nonbank launched its non-QM program in 2014. Company officials pointed to low interest rates and demand for refinances of conventional mortgages for the decline. Impac originated $60.3 million in non-QMs in the second quarter, down from $74.0 million in originations in the first three months of the year. “Demand for non-QM loans has ...