The Department of Veterans Affairs will soon seek comments on certain proposed rules that would allow VA underwriting guidelines to remain independent of the Consumer Financial Protection Bureau and to also implement a lender scorecard. After a lengthy discussion with the CFPB regarding the “qualified mortgage” rule, the VA said it will propose a rule that would prohibit CFPB’s new underwriting guidelines from superseding existing VA guidelines. The VA feels there is no need for any significant change to its current underwriting rules due to ...

FHA endorsements saw very little improvement in May as mortgage interest rates began to climb, according to Inside FHA Lending’s analysis of FHA data. Total FHA originations rose only 2.4 percent in May to $22.0 billion from $21.5 billion the previous month, and 8.9 percent on a year-over-year basis. Volume was split down the middle between purchase and refinancings, with rates rising from 3.35 percent during the first week of May to 3.81 percent at the end of May. Retail accounted for 81 percent of FHA endorsements, which were mostly 30-year, fixed-rate mortgages. The average interest rate for FHA-insured, 30-year FRMs was ... [1 chart]

Reverse mortgage lenders, consumer groups and certain advocates for the elderly are urging Congress to enact legislation passed recently by the House of Representatives granting the FHA additional authority to govern its reverse mortgage program. Testifying before the Senate Banking Subcommittee on Housing, Transportation and Community Development, the groups said the most productive action Congress can take is to pass H.R. 2167 to allow HUD to make expeditious changes to the Home Equity Conversion Mortgage program through mortgagee letters. The bill, which the House approved on June 12, would ...

Deep-freezing the Home Equity Conversion Mortgage program’s full-draw, fixed-rate standard product apparently has not diminished borrowers’ appetite for reverse mortgages as indicated by a significant increase in HECM originations in the first quarter of 2013. FHA endorsements under the HECM program surged 36.2 percent during the first three months of 2013, with lenders reporting $3.84 billion at the end of the quarter, according to Inside FHA Lending’s analysis of FHA data. Volume was also up a modest 5.3 percent from the same period a year ago. The Department of Housing and Urban Development announced the ... [1 chart]

HUD Explains ‘Good Neighbor Next Door’ Program. The Department of Housing and Urban Development has issued Mortgagee Letter 2013-20 to clarify certain things about the FHA’s Good Neighbor Next Door Sales program. The program allows eligible borrowers to purchase, at 50 percent off the list price, a HUD-acquired single-unit home located in an area that the department has targeted for revitalization. According to HUD, the mortgage insurance premium should be based on the first mortgage only. The agency also clarified the process for allowing interruptions to ...

The recent rapid rise in interest rates has some market participants talking about margin calls on MBS investors, but so far all the chatter appears to be speculative – although there still could be red ink out there, somewhere. At press time, the yield on the benchmark 10-year Treasury had stabilized at 2.54 percent. In mid-May the rate was 1.70 percent. That’s a run-up of 84 basis points. One secondary market official told...

Secondary market reform legislation formally introduced in the Senate this week provides more detail on key elements of an ambitious proposal to replace Fannie Mae and Freddie Mac with a new government MBS program, but it’s still widely seen as a starting point in a long process. The Housing Finance Reform and Taxpayer Protection Act of 2013, introduced by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, includes a new section that would protect investors in MBS that carry guaranties from the Federal Mortgage Insurance Corp. from civil liability under federal and state law. Under the bill, S. 1217, the FMIC would sell...

During an Inside Mortgage Finance webinar on Thursday, participants from expressed frustration on the ability to get new jumbo MBS deals because of the recent rapid rise in rates.

Investors in vintage non-agency MBS could take $7.8 billion in losses due to previously undisclosed principal forbearance on top of the $1.0 billion in losses uncovered this month. However, a survey suggests that servicers don’t intend to pass the losses through to investors. The losses recognized in May were reported after Ocwen Financial took over servicing from Homeward Residential. Analysts warned that other servicing transfers could prompt similar losses. Bank of America Merrill Lynch said...

The City Council of North Las Vegas, NV, is the latest local jurisdiction to be drawn by the eminent domain siren song of Mortgage Resolution Partners, despite the near-certain prospects of eventually crashing upon the rocks of opposition from federal agencies. Last week, the city council voted four-to-one in favor to approve a two-month advisory services agreement with MRP to advise the city on the seizure of mortgage loans through the use of eminent domain. Under the parameters of the agreement, MRP is to inventory potential loans in North Las Vegas that could be affected by its program, at no cost to the city, and to design a program for those loans that are inventoried. That program is to be brought back before the city council within 60 days at its Aug. 21, 2013, meeting. Also, the agreement prohibits...