The Department of Housing and Urban Development has revised guidance to lenders for calculating monthly student-loan payments for debt-to-income ratio purposes. The change is aimed at helping more borrowers with student-loan obligations to qualify for an FHA-insured mortgage. Currently, the FHA requires lenders to calculate a monthly payment for deferred student loans based on 2.0 percent of the outstanding balance, and include it in the borrower’s DTI for qualifying purposes. The disadvantage of the current method of calculation is that it makes it harder for the borrower to qualify for an FHA loan, according to Marc Savitt, president of The Mortgage Center, an exclusively FHA/VA lender in Martinsburg, WV. Under the revised guidance, regardless of the borrower’s payment status, the lender must use: (a) the greater of 1.0 percent (a 50 percent reduction from the current 2.0 percent) of the ...
The Department of Housing and Urban Development has issued a notice to establish a computer-matching program between FHA and the VA that would enable the two agencies to prescreen mortgage applicants. The notice was published in the April 15 Federal Register. The computer-matching program would allow HUD to incorporate VA debtor files into the department’s Credit Alert Verification Reporting System (CAVRS). Consequently, both the FHA and VA would be able to prescreen loan applicants and identify who is delinquent or in default on a federally guaranteed mortgage loan. The use of CAVRS would allow HUD to monitor its FHA programs better and prevent the extension of credit to individuals who are delinquent or in default on their obligations to HUD and other federal agencies. Meanwhile, VA expects to achieve savings through risk reduction and ...
Former CFPB enforcement attorney Jennifer Lee said the Circuit Court was hostile towards the CFPB’s arguments on statute of limitations, separation of powers, constitutionality of the agency and more...
The evolutionary flow of the slow-growing agency mortgage servicing market continued in the first quarter of 2016 as many of the big names peeled back and fast-growers kept growing, according to a new analysis and ranking by Inside Mortgage Finance. Overall, the agency MSR space expanded by a meager 0.2 percent during the first three months of 2016. Slow growth is typical of heavier refinance periods, and refi business at Fannie Mae, Freddie Mac and Ginnie Mae was up a combined 1.9 percent from the fourth quarter. Although purchase mortgages accounted for half of the first-quarter market, the volume of such loans securitized by the three agencies was down 12.6 percent from the previous period. Ginnie continued...[Includes two data tables]
For mortgage bankers, it was another trying week in TRID purgatory: A mid-sized nonbank exited the correspondent jumbo market because of concerns over legal liability and separately it appeared industry trade groups have given up hope that the Consumer Financial Protection Bureau will issue any type of formal guidance on cures. Meanwhile, the TRID scratch-and-dent market continues to hum along and the consumer watchdog agency has begun examining residential lenders for compliance with the integrated disclosure rule. “TRID exams have commenced...
When interest rates take an unexpected dive – as they did in the first quarter – it can wreak havoc on servicing assets as banks and nonbanks try to calculate a fair market value for their residential receivables. According to interviews conducted by Inside Mortgage Finance and based on a compilation of values by Piper Jaffray, certain megabanks assigned some of the lowest values in years to their portfolios during the first quarter of this year. Bank of America, for instance, which usually ranks third among all servicers, assigned...[Includes one data table]
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