Rural borrowers will be paying a higher upfront fee for mortgage loans with a Rural Housing Service guaranty, the U.S. Department of Agriculture has announced. In an advance notice, the USDA said it will raise the upfront guaranty fee for loans originated under the RHS’ Single Family Housing Guaranteed Loan Program in FY2016. For purchase and refinance loans, the upfront guaranty fee will change from 2.00 percent to 2.75 percent of the loan amount. The annual fee will remain at 0.50 percent. The fee increase will apply to guaranteed loans obligated on Oct. 1, 2015, through Sept. 30, 2016, the USDA said. A loan is obligated when the USDA has approved a complete loan-application package and issued a conditional commitment for a single-family housing loan guarantee to the USDA lender. The new fee will apply to loan guaranty requests submitted to the USDA prior to Sept. 30, 2015, without a ...
The Internal Revenue Service is rejecting some lender requests for tax-return transcripts due to a recent data breach, warned the U.S. Department of Agriculture’s Rural Housing Service in a lender alert. According to the RHS, the IRS action is meant to deter any fraud that might result from identity theft. The IRS has not responded to a request for confirmation or comment as we went to press. An IRS tax transcript is required as part of a complete loan-application package submitted to a mortgage lender to request a conditional loan commitment. The transcript contains the borrower’s tax record for the current tax year and three prior processing years. The RHS, which guarantees rural housing loans under its Single Family Housing Guaranteed Loan Program (SFHGLP), has issued guidance if a transcript request from a lender returns with the following message: “Due to limitations, the IRS is unable to ...
GNMA to Modernize Management of Loan Docs that Serve as Pool Collateral. Ginnie Mae plans to reform its document custody policies to minimize agency risks. Michael Drayne, Ginnie’s senior vice president of issuer and portfolio management, said the changes will apply to documents for loans that serve as collateral for securitized pools of mortgages. Current policies will be reexamined to see whether they adequately reflect and mitigate actual risks. Existing technology will be reevaluated as well. Ginnie will also study how to integrate document-custody functions and information into the agency’s systems. In addition, Ginnie will look at whether information about the status of pool collateral should be managed at the loan level, not merely the pool level. Furthermore, the agency will reevaluate the need to reexamine its enforcement methods and whether they should be ...
From the beginning of 2014 through the end of 1Q15, roughly 16 percent of the loans securitized by Fannie and Freddie had DTI ratios exceeding 43 percent...
The MBA took particular aim at the proposed enhanced standards for large nonbank servicers, noting that such firms are already subject to extensive regulation from the GSEs and others.
Franklin Codel of Wells Fargo noted that while it’s a challenging time in the economy and for lenders, many agree that quality and clarity of who owns the risk matters.
The Consumer Financial Protection Bureau boosted Fannie Mae and Freddie Mac business by some $132.9 billion when it gave the two government-sponsored enterprises a free pass on the debt-to-income ratio requirements of the qualified-mortgage rule. For the non-agency world, a qualified mortgage has to have a DTI ratio of 43 percent or less. While the government-insured market has its own QM rules that effectively ignore DTI, a loan eligible for sale to the GSEs is considered a qualified mortgage if it meets all the QM criteria – such as no interest-only payments – other than the DTI cap. From the beginning of 2014 through the end of the first quarter of this year, about 16.3 percent of the loans securitized by Fannie and Freddie had...[Includes two data tables]
Most segments of the mortgage industry were relieved to get a two-month reprieve from the effective date of the Consumer Financial Protection Bureau’s integrated disclosures rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. The bureau this week formally proposed to move the effective date of the controversial new rule from Aug. 1 to Oct. 3. The CFPB said some delay is necessary because it was late in notifying Congress and the Government Accountability Office within 60 days of the rule’s effective date, as is required by the Congressional Review Act. Many in the mortgage industry still want...
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