Just how important are Fannie Mae and Freddie Mac to the revenue picture of the U.S. government? According to calculations from The Collingwood Group, a Washington-based consulting firm, GSE dividends in 2013 will be the fourth largest source of federal revenue.

State attorneys general and the Consumer Financial Protection Bureau reached a long-pending settlement with Ocwen Financial in December. Regulators suggest that additional actions are planned, and they have focused on the largest servicers as well as servicers involved with large transfers. As part of the settlement, Ocwen must complete $2.0 billion in principal reduction for borrowers with negative equity and refund $125.0 million to the nearly 185,000 borrowers who went through improper foreclosures from ...

Fitch Ratings recently released new loan-loss model criteria for jumbo mortgage-backed securities. The rating service said the new loss criteria could result in higher credit enhancement requirements for new jumbo MBS. The new criteria assign a penalty to loans sourced through non-retail channels. The rating service will now include a borrower’s liquid reserves as a variable in its loss modeling. Fitch will apply a 25 percent haircut to the reported reserve amount based on the volatility ... [Includes five briefs]

Recent announcements of revised loan-level price adjustments for the government-sponsored enterprises and risk-based pricing are fueling fears of FHA resurgence in the market. Consistent with the Federal Housing Finance Agency’s stated intent to raise the GSE guaranty fees by about 11 basis points, Fannie Mae and Freddie Mac released revised loan-level price adjustments (LLPAs) on Dec. 16. The upfront fee hike takes mortgage rates for affected borrowers close to FHA pricing levels, according to industry analysts.

The Department of Housing and Urban Development is seeking comment on a policy change that would reduce the FHA’s credit-score threshold from 620 to 580 to allow more manually underwritten borrowers to use compensating factors that would help them qualify for an FHA-insured mortgage loan. The change would strengthen manual underwriting and reduce FHA’s underwriting losses, resulting in more revenue per loan for FHA, HUD said. “The FHA can control costs through risk management practices,” the agency explained in a notice of rulemaking. “The lower costs are a gain to FHA.”

The Department of Housing and Urban Development this month expects to issue a final rule that would eliminate the process of requesting alternative FHA maximum loan limits due to improved access to, and availability of, home sales data. With the availability of comprehensive national databases of home sales transactions and continuing data-collection efforts, the regulations governing requests for alternative maximum mortgage limits have become outdated and unnecessary, the agency said.

The Department of Housing and Urban Development warned of tougher enforcement against servicers who do not make full use of HUD’s loss mitigation tools, as it announced the implementation of a newly revised tiered servicer ranking system. The new system, Tiered Ranking System II, features a new scoring mechanism that would help HUD determine which lenders get higher reimbursement rates on claim expenses based on their servicing performance.

FHA lenders will soon be adjusting to changes aimed at improving and streamlining the agency’s annual recertification process. Effective in April, the FHA will implement a series of system enhancements, including replacing its Lender Assessment Sub-System (LASS) with the Lender Electronic Assessment Portal (LEAP), formerly known as “HUD/FHA Lender Approval Files.”

Approximately 48 percent of FHA loans that underwent post-endorsement review by the FHA in the third quarter of 2013 received an “unacceptable” rating – a commonly high percentage of deficient FHA-insured loans that lenders could lower through mitigation. The FHA reviewed 6,692 FHA-insured loans between July 1 and Sept. 30, 70 percent of which were home-purchase loans, 25 percent streamline refinancings, and 5 percent rate and term refis. Of the total loans analyzed, 36 percent had certain deficiencies, 19 percent showed early payment default (EPD), and only 16 percent met FHA underwriting standards, according to the agency’s latest report on loan-file review findings.

FHA and VA loans backing Ginnie Mae pools in 2013 showed an average mid-range FICO score of 693, lower debt-to-income ratio and an average loan size of $187,268, confirming strict underwriting in both government programs, according to an Inside FHA Lending analysis of Ginnie Mae loan-level disclosures. Issuers securitized $370.4 billion of mortgages with first payment date in 2013 through November. Loan characteristics exclude loans with no information reported.