Upcoming changes from the Internal Revenue Service will allow for a completely paperless mortgage application process, according to industry participants. Beginning Jan. 7, the IRS will allow electronic signatures for IRS Form 4506-T, request for transcript of tax return. The electronic signatures will be allowed for tax transcripts ordered through the IRS Income Verification Express Services. “The requirement of a manual signature on the IRS 4506-T was the last significant impediment to a truly ...

Panelists with opposing views of the FHA this week supported raising the single-family mortgage insurance program’s minimum credit score to keep borrowers with questionable credit quality out and help preserve the high quality of FHA’s newer books of business. Despite their disagreements over whether the FHA will ultimately need a taxpayer bailout, participants in a policy forum hosted by the Cato Institute called for reforms to reduce government presence in the mortgage market and help the FHA to avoid ...

Fannie Mae, Freddie Mac and the FHA financed a record $31.2 billion in so-called conforming jumbo mortgages during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. Business in conforming jumbo loans – defined as mortgages on one-unit properties that exceed $417,000 – rose 29.6 percent from the second quarter and represented the highest quarterly volume for the agencies since emergency loan limits went into effect back in 2008. Since that time, an estimated $363.0 billion of conforming jumbo mortgages have been originated. Conforming jumbo originations for the first nine months of 2012 reached...[Includes three data charts]

As part of negotiations regarding the fiscal cliff, the Obama administration and Democrats in the House are seeking principal reduction loan modifications for borrowers with negative equity. The Treasury Department has reportedly proposed a program targeting borrowers with mortgages in non-agency mortgage-backed securities while the debate about principal forgiveness for loans held by the government-sponsored enterprises has also been rekindled. The Obama administration would neither confirm nor deny the non-agency proposal, but details regarding the Market Rate Modification program have prompted talk among industry participants and a detailed analysis. “In order to assist...

The Department of Housing and Urban Development announced FHA loan limits for calendar 2013 that include higher amounts for 19 counties, according to an Inside Mortgage Finance analysis. Of the 19 counties getting higher loan limits for FHA forward mortgages, 10 are part of the Houston metropolitan area, where the one-unit limit is going up just $1,500, to $272,550. The remainder are in various counties in Alaska. The “emergency” loan limits for high-cost markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac – were authorized...

Fannie Mae and Freddie Mac this month completed implementation of the latest round of guaranty fee hikes, this one mandated by their regulator as a move to reduce the footprint of the government-sponsored enterprises and draw more private capital into the mortgage market. Experts say the 10 basis point fee hike will have a slight positive impact in the near term, but future moves in the same direction could help close the gap between agency and non-agency mortgage-backed securities. The Federal Housing Finance Agency ordered the GSEs to raise g-fees by 10 bps for cash deliveries starting in November, and for MBS transactions beginning in December. At the time, the FHFA said...

The mortgage industry is fearful of expanded liability after the Consumer Financial Protection Agency reportedly asked financial institutions with wholesale mortgage operations to monitor and ensure correspondents’ compliance with consumer protection laws and regulations. Lenders are said to be anxious about being held liable for purchased defective mortgages originated by unaffiliated third parties, and they are wary about new entrants that are trying to fill the void left by the traditional, larger players when they exited the wholesale broker/correspondent market. The CFPB has not issued...

The memorandum of understanding (MOU) announced recently between the Consumer Financial Protection Bureau and the Department of Justice does not represent a major policy shift but could lead to more referrals of fair lending cases to the DOJ, according to industry lawyers. Compliance attorneys said information-sharing between the two agencies will likely trigger new fair lending inquiries into origination and servicing practices. In addition, both agencies subscribe to the disparate impact theory and are expected to continue to push it, attorneys noted. The new MOU supplements...

In a development that might catch the attention of officials at the CFPB who are working on improving consumer disclosures under the Real Estate Settlement and Procedures Act and the Truth In Lending Act, more evidence has emerged that consumers aren’t very big on using TILA forms to comparison shop for mortgages.A new study from Fannie Mae found that nearly half of lower‐income respondents and more than a third of higher‐income respondents get quotes from only one mortgage lender. The survey also confirms findings in other reports that “a substantial portion of all consumers do not understand key mortgage elements.”

MBS industry groups generally support the Federal Housing Finance Agency’s plan to develop a single securitization platform and model pooling and servicing agreements for Fannie Mae and Freddie Mac. But they question whether a standardized system will for the non-agency MBS market or risk-sharing arrangements envisioned for the government-sponsored enterprises. The FHFA has been pushing the two GSEs to standardize their securitization operations in recent years, including uniform data delivery requirements, consistent servicing rules and, most recently, a new framework for seller representations and warranties that will go into effect in January. The agency wants...