The Obama administration extended the deadline to apply for the Home Affordable Modification Program and related loss mitigation program through the end of 2015. The programs under the Making Home Affordable Program were scheduled to expire at the end of this year. HAMP has seen somewhat limited activity among non-agency servicers, even with incentive payments for principal forgiveness. Some $22.7 billion in Troubled Asset Relief Program funds are targeted for non-agency HAMP activity ... [Includes one data chart]

The Consumer Financial Protection Bureau issued a final rule this week creating a fourth category of “qualified mortgages,” expanding on exemptions for small portfolio lenders. Certain small lenders will be allowed to receive QM protections for originations with interest rates higher than allowed for general QMs and the loans won’t have to meet the 43 percent debt-to-income ratio standard. The CFPB said the exemption will allow for originations of non-agency mortgages. “The bureau continues to believe that ...

Two years after being announced, a judge is set to rule on Bank of America’s proposed $8.5 billion settlement involving non-agency mortgage-backed securities. The ruling will set a precedent for other non-agency MBS issuers facing repurchase requests, according to industry analysts. “Either the deal goes through and becomes a template for how to extract oneself from this mess, or it gets rejected and signals that far more pain is coming down the pike,” said Isaac Gradman ...

FirstREX is offering a slight wrinkle on “80-10-10” loan structures by taking an equity stake in the home, recording a second lien, while foregoing monthly payments from the borrower. It remains to be seen whether its “HomeBuyer” product will catch fire nationally. The privately held firm is helping consumers buy a home by providing up to half the downpayment. In marketing materials, the company is careful to point out that it isn’t a lender and that its program shouldn’t be construed as being part of a ...

The funds participating in the Public-Private Investment Program ended their asset purchases in the fourth quarter of 2012 and generated strong returns on investments in non-agency mortgage-backed securities. While Public-Private Investment Funds can retain their holdings through 2017, most have liquidated their portfolios. Nine funds participating in the PPIP purchased $24.9 billion in MBS, largely vintage non-agency MBS along with some commercial MBS. At the end of the ... [Includes one data chart]

Legislation to reform the government-sponsored enterprises is starting to appear in the Senate. Last week, Sen. Johnny Isakson, R-GA, introduced S. 1048, similar to the “Mortgage Finance Act” he introduced in 2011. The bill would revoke the charters of Fannie Mae and Freddie Mac upon resolution of their obligations and create a new Mortgage Finance Agency for securitization. Sens. Bob Corker, R-TN, and Mark Warner, D-VA, are also working on a bill that would replace Fannie and ... [Includes two briefs]

The FHA’s net-worth requirement, now fully phased in nearly three years since it was revised, will help ensure that only responsible, well-capitalized lenders and mortgagees are involved in the origination of FHA-insured loans. However, small FHA lenders may get squeezed out in the process. On May 20, the second and final phase of FHA’s new net-worth rule became effective. The final rule provides that, regardless of size, all applicants for FHA approval and those with current approval must have a ...

Lenders are at odds with housing finance agencies over the benefits of a new FHA guidance, which calls for documentation of downpayment assistance (DA) that HFAs provide to borrowers. The new guidance requires mortgagees to show written proof that funds provided by a federal, state or local government entity to help borrowers meet the FHA’s 3.5 percent minimum cash investment requirement actually came from the entity and not from some impermissible source. The guidance follows up on a rule issued by HUD last year clarifying an interpretation of the National Housing Act. The rule expressed HUD’s view that ...

A recent Federal Reserve survey of bank lending practices further confirmed a continuing trend among FHA lenders of refusing to lend to borrowers with FICO scores below 620 even though they qualify for the loan and could afford the required minimum 3.5 percent cash investment. About a third of senior loan officers who responded to the April 2013 survey indicated they were less likely to approve FHA home-purchase loan applications within the 580-620 FICO range this year compared to last year. They prefer lending to borrowers with a 720 FICO and who are making a 10 to 20 percent downpayment, the survey showed. An estimated 75 percent of banks cited the ...

The Texas House of Representatives has approved legislation that will let voters decide on Nov. 5 whether to allow home-equity purchase lending in the Lone Star State. The bill would amend the Texas constitution to authorize Home Equity Conversion Mortgage for Purchase loans, which would make the program available to Texans for the first time. The state legislature voted 139 to 1 in favor of Senate Joint Resolution 18, which the Texas Senate approved unanimously in March. Specifically, the bill would amend the state constitution to ... [One chart]