The recent increase in mortgage insurance premium (MIP) and other policy changes to strengthen the FHA Mutual Mortgage Insurance Fund are causing borrowers with better credit to shift from FHA to conventional financing, according to a new Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The monthly survey of real estate agents found that FHA remains an option for borrowers who have limited cash resources and tainted credit. However, given their individual circumstances and FHA’s recent policy changes, many would take out a conventional loan if they could qualify. With a low 3.5 percent downpayment requirement, FHA appears to ...
Expressing its views and estimates for the Fiscal Year 2014 budget, the House Financial Services Committee remains concerned that the FHA has not fully exercised its powers to protect its mortgage insurance fund and urged the agency to begin charging additional user fees to strengthen its financial footing. Apparently, there is a hitch in that proposal. It seems the Department of Housing and Urban Development does not charge user fees and to do so would probably need clear authorization from Congress, said a HUD spokesman. It is not clear what the committee meant by ...
Banks with major Ginnie Mae portfolios – and even smaller firms – increased their purchases of delinquent mortgages out of MBS pools in the fourth quarter compared to the third as a way to save money and refinance troubled loans. According to an analysis by Inside FHA Lending, the top 50 Ginnie Mae issuers bought $12.65 billion of problem loans out trusts in fourth quarter compared to $11.17 billion in the third, an increase of 13 percent. “Once you buy the loan it goes into your portfolio,” said Tim Rood, a partner in The Collingwood Group, a Washington-based advisory firm. “You can try to re-perform it and then re-securitize it,” he said. Wells Fargo, the largest Ginnie Mae servicer in the nation with a portfolio of $412 billion, purchased ... [1 chart]
The reverse mortgage lending industry has asked Senate lawmakers to expand the Department of Housing and Urban Development’s authority to strengthen its oversight of the Home Equity Conversion Mortgage program. Testifying before the Senate Committee on Banking, Housing and Urban Affairs recently, Peter Bell, president of the National Reverse Mortgage Lenders Association, said it is crucial for HUD to be able to act swiftly to reduce the risk the program poses to the FHA insurance fund. Bell said HUD needs to implement changes “in a matter of months, not years” and for that to happen, it would need authority from Congress to ...
The FHA’s efforts at underwriting reform and reducing its footprint to give way to private capital are nothing but an illusion of reform, according to the American Enterprise Institute. Raising the annual mortgage insurance premium and the required downpayment for FHA-insured loans greater than $625,500 as well as tightening the underwriting on loans with credit scores of 620 or below would impact only a tiny percentage of FHA business, said Edward Pinto, a resident fellow at AEI. “These changes make great sound bites but clearly this is the illusion of reform,” he said. Both measures are part of FHA’s latest efforts to ...
Reverse Mortgage Solutions, a HECM lender bought by Walter Investment Management Corp. last fall, has received a $100 million warehouse line of credit from Royal Bank of Scotland, according to a new filing with the Securities and Exchange Commission. The line is legally structured as a master repurchase agreement. However, it is also considered “uncommitted” and matures in February of 2014. RMS will use the money to fund new originations of HUD-backed home equity conversion mortgages. Several of the nation’s largest banks have exited the HECM space the past two years, including Wells Fargo and Bank of America. A handful of nonbanks have moved ...
The Federal Housing Finance Agency is mandating that Fannie Mae and Freddie Mac each enter into $30 billion of “risk sharing” transactions this year and move a little more quickly to reduce their $1.19 trillion of on-balance sheet holdings, including whole loans and non-agency MBS. The edict comes directly from FHFA Acting Director Edward DeMarco, who provided few details about the initiative during a speech this week to the National Association for Business Economics. DeMarco also announced that the regulator intends to set up a new government entity that will develop and manage the common MBS securitization platform that’s been in the works for the two government-sponsored entities. One reason for pushing the GSEs to test drive risk-sharing structures is...
The purchase mortgage business has been in the tank since the housing crash. Although home buying is on the upswing, will it be enough to replace the refi boom?
The National Association of Federal Credit Unions is urging the Consumer Financial Protection Bureau to take another look at the usefulness of APR disclosures, among other things.
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