A House Republican legislative proposal to transfer the Department of Agriculture’s rural housing programs to the FHA to eliminate potentially duplicative housing services would be disruptive if not premature, according to officials from both agencies. Testifying during a recent House subcommittee hearing on a GOP discussion draft to reform FHA, Ginnie Mae and the Rural Housing Service of the Department of Agriculture, agency representatives expressed their opposition to the proposal. The Republican discussion draft is under consideration in the House Financial Services Subcommittee on Insurance, Housing and Economic Opportunity to...

The FHA is urging Congress to restore the authority of community banks to close FHA loans in their own names without having to maintain an FHA lender approval to do so. While it took a regulation by the Department of Housing and Urban Development to take away small banks’ FHA correspondent status, federal law requires lenders to have FHA approval before they can close an FHA-insured loan. Only Congress can make the changes necessary for non-direct endorsement lenders to return to the business of originating and closing FHA loans in their name, according to a former HUD official. Assistant Secretary for Housing and...

The House this week voted to reject a short-term government spending bill but what’s interesting is what’s not in it: a provision extending the temporary loan limits. While attention is on the possibility of a government shutdown, it appears that a last-ditch effort by the mortgage industry and its allies in Congress to extend the current $729,750 high-cost area loan limit before Sept. 30 has failed. The measure lost by a vote of 195-230 after Democrats withdrew their support and 48 Republicans defied party leaders in protest over spending caps. It would have kept the government operating through...

Several states would have seen their FHA dollar volume decline by 10 percent or more in the first half of 2011 had the lower FHA loan limits been in place at the beginning of the year. Connecticut and the District of Columbia would have been the hardest hit with 15 percent and 14 percent drops in their FHA volumes, respectively, over the six-month period, according to Inside FHA Lending’s analysis based on Department of Housing and Urban Development projections. California, which ranked first among states in FHA production, would have experienced a 12 percent drop, followed by Massachusetts with 11 percent. Colorado...(Includes one data chart)

Interest rates on jumbo mortgages are the latest addition to the data page that is published in each issue of Inside Nonconforming Markets. The average interest rates and points for jumbos are tracked via the Inside Mortgage Finance Weekly Sample of Mortgage Rates and the Mortgage Bankers Association. ... [includes four briefs]

“Unwarranted and false public allegations” have prompted Michael Perry, the former chairman and CEO of IndyMac, to mount a defense via a new website. His “Not Too Big to Fail” site offers “the facts about Mike Perry and IndyMac.” On the site, Perry takes aim at lawsuits against him by the Securities and Exchange Commission and Federal Deposit Insurance Corp. as well as private litigation and audits by the Office of the Inspector General of the Department of Treasury. ...

The stigma once associated with nonconforming mortgages appears to be fading as another originator is touting its nonconforming offerings. Last week, NexBank was the latest lender to detail its nonconforming products, including jumbos and conforming balance options. “By expanding our balance-sheet offerings to include loans down to $250,000, the Mortgage Connect program allows us to serve the funding needs of most homeowners in the North Texas market,” said Jed Meaux, vice president and head of NexBank’s mortgage division. ...

Restrictions by the government-sponsored enterprises have not stopped one company from offering Property Assessed Clean Energy program loans. FIGtree Energy Resource Company, a San Diego company, is offering the California PACE program – only for non-agency jumbo mortgages in certain jurisdictions. PACE programs offer loans for energy-efficiency home improvements. Beginning in July 2010, the GSEs stopped purchasing PACE-related mortgages that had automatic first lien priority over previously recorded mortgages. ...

The Treasury Department has not sufficiently enforced rules for newer components of the Home Affordable Modification Program, according to a review released last week by the Government Accountability Office. Treasury officials acknowledge that the agency has not met all of the GAO’s recommendations but made no guarantees of tighter enforcement. “Treasury has experienced challenges in implementing the newer Making Home Affordable programs,” the GAO said, citing problems with the Principal Reduction Alternative, Second Lien Modification and Home Affordable Foreclosure Alternatives programs.

Banks and thrifts appear to be replenishing their first lien portfolio holdings while not taking on major amounts of new servicing, according to the Inside Mortgage Finance Bank Mortgage Database. Banks and thrifts held $1.70 trillion in first-liens in portfolio at the end of the second quarter of 2011, up 0.2 percent from the previous quarter.Portfolio holdings were down 0.9 percent compared with the second quarter of 2010. Bank portfolios are largely being used to hold mortgages that meet underwriting guidelines for the government-sponsored enterprises ... [includes one data chart]