The Department of Housing and Urban Development has updated the FHA TOTAL Mortgage Scorecard User Guide to reflect current FHA guidance on derogatory or delinquent credit and on borrower employment history. A lender is required to downgrade a mortgage loan application to “refer” and manually underwrite the loan for cash-out refinance transactions if any mortgage trade line, including mortgage line-of-credit payments, show any mortgage delinquencies within the most recent 12 months or if it shows less than six months of payments on the existing mortgage. The same guidance applies if the loan is ...

State housing finance agencies are returning to Ginnie Mae as investors’ appetite for state mortgage revenue bonds continue to wane and the government-sponsored enterprises are no longer major purchasers. With funding severely constrained, HFAs have turned increasingly to FHA-insured mortgage loans and Ginnie Mae securitization to finance their long-term, fixed-rate mortgage revenue bonds. The MRBs enable the state agencies to continue to offer mortgage products at affordable rates to lower-income and first-time homebuyers. President Obama’s FY 2013 budget noted that, among the new issuers, numerous HFAs have gone ...

Ginnie Mae will publish, in advance, the CUSIP and pool information for multiple issuer pools (MIP) on its website for the current month, plus the upcoming three months of issuance. The information will be published by pool term, pool type and security interest rate. This enhancement applies to all securities with an April 1, 2012, issue date and thereafter. According to Ginnie Mae, publishing the CUSIP and pool numbers will improve issuers’ ability to manage their loan pipelines and MIP loan package submissions before the pool is finalized. Both the finalized CUSIP and pool numbers as well as the future CUSIP and pool numbers for MIPs will be ...

The federal rulemaking process can be confusing at times. Currently, the Department of Housing and Urban Development sets the area-based mortgage loan limits annually and allows local interested parties and housing industry groups to appeal for increases in the FHA’s maximum mortgage limits for specific counties or metropolitan statistical areas. Any interested party may submit a request for an increase in the mortgage limits of a particular area if the party believes that the present limit does not accurately reflect the higher home sales prices in that area. Requests must be adequately supported by ...

The volume of Home Equity Conversion Mortgage loans continued to drop both on quarterly and yearly bases while the overall FHA market ended January 2012 on a weaker note compared to the same month last year. HECM production fell 11.0 percent in 2011 from the previous year to $16.9 billion and off 20.6 percent from the third to the fourth quarter. Sponsors as a share of lender originations accounted for 40.7 percent of new HECM loans originated over the 12-month period. Initial principal amount at origination totaled $10.9 billion. Wells Fargo Bank ended the year as ... (with 2 charts)

The Department of Housing and Urban Development this week announced FHA insurance premium increases that will add an estimated $1 billion to the agency’s Mutual Mortgage Insurance Fund, which may be enough – along with hefty penalties on lenders – to stave off a government bailout. The annual and upfront premium increases for all forward mortgages are part of an effort to bolster the FHA’s capital reserves for unexpected losses and ease Congress’ fear of a taxpayer bailout of the FHA. The Obama administration’s proposed fiscal 2013 budget suggested that the MMI Fund could need a $668 million infusion this...

Bank of America had already been dialing back its mortgage deliveries to Fannie Mae, along with declining overall production volume, before the company unexpectedly announced last week it has stopped sales to the government-sponsored enterprise altogether. But according to reports, a top Fannie official said the GSE acted first to end the relationship in frustrations with the bank’s delays in resolving repurchase issues. BofA said disputes over repurchases were one factor leading the bank to stop selling most single-family mortgages to Fannie, although the company also cited an inability to renegotiate...

Fannie Mae and Freddie Mac buyback demands on Countrywide mortgages were more than double the amount sought on any other lender, but the key reason is that Countrywide securitized a lot more loans than anyone else from 2006 through 2008. A new Inside Mortgage Finance analysis of representation and warranties disclosures made by the two government-sponsored enterprises shows that some $16.22 billion of Countrywide mortgages were subject to buyback demands, both before and after the company was acquired by Bank of America in 2008. In a distant second place was Wells Fargo...(Includes one data chart)

The Department of Housing and Urban Development and Flagstar Bank have agreed on a structured payment scheme to ease the financial impact of a $133 million settlement of a lawsuit alleging fraudulent mortgage lending practices and improper approval of FHA home loans. The settlement occurred on the same day the civil fraud lawsuit was filed under the False Claims Act by the U.S. Attorney for the Southern District of New York. The suit alleged that Flagstar, the ninth largest lender in 2011, issued false certifications that the loans met all FHA requirements for insurance even though the due diligence...

Despite historically low mortgage rates, tough underwriting standards and mortgage hassles are continuing to drive homebuyers towards all cash transactions in 2012. According to new numbers released this week from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, cash transactions accounted for a record-high 34.1 percent of home purchases tracked in January. That was up from 29.4 percent a year ago and just 22.8 percent in January of 2010, based on a three-month moving average. Importantly, the large share of home purchases funded with cash instead of mortgages highlights a serious problem...