While Congress debated the payroll tax cut extension, a tax provision allowing homeowners to deduct private mortgage insurance premiums from their annual federal tax bill quietly expired on Dec. 31. Consequently, mortgage loans with private MI that closed on or after Jan. 1, 2012, will no longer be able to use the deduction, unless Congress passes a bill that extends the deduction through next year retroactive to the beginning of 2012. It is a lapse that occurs almost every year, according to MI industry participants. Tax deductibility of MI premiums is part of a huge legislative package...

The Department of Veterans Affairs has liberalized the requirements for modification of VA-guaranteed loans and has provided servicers with more options to help veterans avoid foreclosure. Final rules published recently in the Federal Register show changes to requirements related to the calculation of interest rates on modified loans as well as foreclosure costs that may be rolled into the modified loan balance. The rules also give mortgage servicers the flexibility to modify VA loans without seeking prior approval from the VA, thus speeding up assistance to veteran borrowers facing...

Veterans will be able to borrow up to a possible maximum of $625,500 in some high-cost areas to purchase or refinance a single-family house under the Department of Veterans Affairs’ loan limits for 2012. The amount of mortgage a veteran could qualify for would depend on the median county price and the VA’s new method for calculating loan limits on a county-by-county basis. In Hawaii, Guam, Alaska and the Virgin Islands, limits will range from $625,500 to as much $938,250, the agency said. A list of VA county loan limits has been posted on the agency’s web site. The VA does not have a maximum loan limit...

MGIC Investment Corp. pumped $200 million into its ailing mortgage insurance operation, Mortgage Guaranty Insurance Corp., to increase its statutory capital and enable it to continue writing new business. The capital infusion is part of a survival strategy mapped out by the private MI company two years ago, with the concurrence of the Wisconsin Office of the Commissioner of Insurance (OCI), Fannie Mae and Freddie Mac. The strategy included a waiver from the OCI capital requirements as well as approvals by the two government-sponsored enterprises of MGIC’s subsidiary, MGIC Indemnity Corp. (MIC), as an...

The Department of Housing and Urban Development has awarded more than $10 million for housing counseling services to help homeowners resolve mortgage delinquencies, defaults and foreclosure in order to preserve homeownership. Funding was given to 26 national and regional organizations, and 139 state and local housing agencies that already provide housing counseling services to minority and first-time homebuyers. Under the department’s Housing Counseling Program, HUD partners with qualified nonprofit organizations to provide housing counseling to low- and moderate-income individuals and families...

The number of FHA endorsements grew by a whisper in November, up 0.2 percent to 88,206 from 88,060 in October, and down a screaming 32.8 percent from last year, according to Inside FHA Lending’s analysis of agency data. Endorsements for the month totaled $14.5 billion, with purchases and first-time homebuyers leading the way. Approved lenders accounted for the bulk of originations during the month, 79.8 percent. Purchase transactions comprised 64.8 percent of total originations for the month. An estimated 96.1 percent of loans insured by FHA were fixed-rate mortgages. Purchase loans with FHA...

Fannie Mae and Freddie Mac this week advised lenders that they will increase the guarantee fees they charge on all mortgage products by 10 basis points starting April 1, the result of a money-raising scheme enacted by Congress in the waning hours of the 2011 legislative session. A 10 bps point hike in fees charged by the government-sponsored enterprises may have a nominal effect at first, but the long-term implications are more significant. Politically, the increased fees will not be used to cover losses incurred by Fannie and Freddie – or even to repay the government’s costs incurred to...

Business was booming at Fannie Mae and Freddie Mac during the just-completed fourth quarter of 2011, with total single-family mortgage securitization jumping 47.4 percent from the previous period, according to a new analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises pumped out a combined $261.2 billion in single-family mortgage-backed securities during the final three months of the year. That was the highest quarterly production level of the year, but it still came up 21.2 percent short of the volume generated....(Includes three data charts)

Congress has approved legislation mandating an FHA premium increase of 10 basis points, corresponding to an increase in fees charged by Fannie Mae and Freddie Mac for placing guarantees on cash flows to mortgage-backed securities investors. The increases were in the Temporary Payroll Tax Cut Continuation Act of 2011, which was approved by the House on Dec. 23 by unanimous consent and previously cleared by the Senate. In addition to raising guarantee fees charged by the two government-sponsored enterprises, the new law requires the Department of Housing and Urban Development to raise FHA annual...

President Obama this week moved to break a GOP blockade in the Senate by making a recess appointment of Richard Cordray to become director of the Consumer Financial Protection Bureau, a political maneuver that defies 20 years of precedent and may set the stage for a legal challenge. The Obama administration claimed that it is fully within its Constitutional authority to place the new director into his position, dismissing as a gimmick the pro-forma sessions Republicans used to block the nomination. A number of consumer groups came out in support of the appointment. The president’s allies in Congress were...