The rising delinquency rates for FHA-insured mortgage loans could spell trouble down the road for the FHA as it struggles to shore up its dwindling loss reserves, according to a new Fitch Ratings analysis. But the chief economist for the Mortgage Bankers Association has a slightly different take on that issue. Fitch analyst Brian Bertsch said a growing gap between seriously delinquent (90-day past due) guaranteed and non-guaranteed loans could presage future losses that could prompt the FHA to restrict loss claims and force banks to buy back defaulted loans. This could be the scenario ...
Ocwen Financial Corp. and joint venture partner Altisource will soon be buying FHA-insured loans from lenders through a special vehicle, Correspondent One, for future securitization. In its second quarter filing with the Securities and Exchange Commission, Ocwen said it expects Correspondent One will be able to use its relationship with Lenders One to grow its volume substantially. Correspondent One has seen significant, positive environmental changes in the correspondent lending market, [and] there has been a contraction in correspondent lending, Ocwen said, alluding to ...
VA Flunks Plain Writing Test. The Department of Veterans Affairs got an F for not following the requirements of the Plain Writing Act, which directs federal agencies to take steps to ensure they are communicating clearly with businesses, consumers and stakeholders. The statute went into effect July 2011 and the Center for Plain Language, a nonprofit organization that grades government agencies on their efforts to comply with the Act, evaluated and graded 12 agencies for compliance. The center gave two grades the first grade represents how well the agency followed the requirements of the act, and the second grade reflects ...
Most of the mortgage industrys modest increase in origination volume during the second quarter came through lenders retail production programs, according to a new Inside Mortgage Finance ranking and analysis. Retail loan originations rose 9.2 percent to an estimated $250.0 billion during the second quarter, That represented a record 61.7 percent of the markets total output for the period, the highest retail share since Inside Mortgage Finance began analyzing origination channel trends. Most of the top lenders reported increased retail production at a time when many but certainly not all were scaling down their wholesale operations. Total wholesale originations declined...[Includes four data charts]
The Consumer Financial Protection Bureau late last week issued its long-awaited proposal to establish national mortgage servicing standards for banks and nonbanks alike, extending a number of key aspects of the big national servicing settlement to the entire industry in the process. The proposed rule covers nine major topics and would implement changes made by the Dodd-Frank Act to the Truth in Lending Act and the Real Estate Settlement Procedures Act. The proposed rule generally requires servicers of closed-end residential mortgage loans (other than reverse mortgages) to send a periodic statement for each billing cycle, and the CFPBs proposal spells out the timing, form and content requirements of such statements, and includes sample forms that servicers can use. Special rules will apply...
Mortgage delinquency rates trended higher in the second quarter of 2012, although the foreclosure picture appeared to be improving. The Inside Mortgage Finance Large Servicer Delinquency Index showed a 22 basis point increase in overall defaults, including loans just one month late and those in foreclosure. After dipping below the 10.00 percent level in March for the first time since late 2009, the overall past-due rate bounced back up to 10.10 percent as of the end of June. Most servicers reported...[Includes two data charts]
The Federal Housing Finance Agencys public expression of concern last week about proposals to use the eminent domain powers of local governments to seize performing underwater mortgages might be enough to significantly delay or even derail the effort outright, say experts. The conservator of Fannie Mae and Freddie Mac and regulator of the 12 Federal Home Loan Banks warned that unspecified action might be necessary on its part to avoid a risk to safe and sound operations at the government-sponsored enterprises. FHFA has significant concerns about the use of eminent domain to revise...
A federal judge in New York last week rejected the motion by a trio of former Fannie Mae executives to dismiss a securities fraud civil lawsuit brought late last year against the top GSE officers by the Securities and Exchange Commission. In December 2011, the SEC filed suit in the U.S. District Court for the Southern District of New York alleging that former Fannie executives made material misrepresentations to the public, investors and the media about the government-sponsored enterprises exposure to subprime mortgage loans in 2007 and 2008. The SEC filed an identical parallel civil suit against Freddie Mac the same day. The SECs complaint against former Fannie executives Daniel Mudd (CEO), Enrico Dallavecchia (chief risk officer) and Thomas Lund (EVP for single family) alleges...
The Senate Finance Committee recently approved legislation by a bipartisan vote of 19-5 to extend tax relief for principal forgiven on a mortgage, which is set to expire at the end of this year, and restore the mortgage insurance deduction that expired at the end of 2011. The Family and Business Tax Cut Certainty Act of 2012 approved by the Senate Finance Committee would extend both tax breaks through 2013. Prospects for the legislation are murky, according to industry analysts, as Republicans are working to limit the extension of certain tax breaks. This markup is not...
The Federal Housing Finance Agency this week joined a growing chorus raising warnings about proposals to use the eminent domain powers of local government to seize performing underwater mortgages out of non-agency MBS pools. In an unusual move, the agency said it has significant concerns about the use of eminent domain to revise existing financial contracts and the alteration of Fannie Mae, Freddie Mac and Federal Home Loan Bank securities holdings. The FHFA formally invited public comment on the concept and warned that action may be necessary on its part [as conservator and regulator of the government-sponsored enterprises] to avoid a risk to safe and sound operations and to avoid taxpayer expense. The issue drew attention this week because both Fannie and Freddie managed...[Includes one data chart]