The Department of Housing and Urban Development is requiring servicers of FHA-insured mortgages to delay foreclosure for a year and to evaluate all borrowers for the Home Affordable Modification Program (HAMP) and other similar loss-mitigation programs. The move is one of the improvements to the FHA Distressed Asset Stabilization Program, a direct-sale pilot program that allows pools of foreclosure-bound mortgages to be sold to qualified bidders. Bidders are encouraged to work with borrowers to help cure the loan – a less costly alternative to foreclosure or an REO (real estate-owned) sale. An FHA servicer can place a troubled loan into a DASP pool if the borrower is at least six months delinquent on their mortgage and the servicer has exhausted all FHA loss-mitigation options. Previously, servicers could foreclose six months after they received the loan. They were also encouraged, though not required, to ...
The FHA has automated the delivery of notices to targeted lenders that receive an “unacceptable” rating following a post-endorsement review of a sample of their FHA-insured mortgage loans. The agency’s notification process shifted from manual to electronic effective on April 27, with the deployment of a new automated system for delivering notices of unacceptable findings, or eFindings letter. The change speeds up the process of determining whether a direct-endorsement lender should be subject to an indemnification request from FHA because of faulty underwriting. The enhanced delivery process will make it easier for lenders to do business with the FHA, the agency said. The post-endorsement audit is crucial to the success of the FHA’s direct-endorsement program. The FHA performs a post-endorsement technical review (PETR) on selected cases to evaluate the risk loans pose to ...
The reduced capital requirements for certain vintage mortgages under recently issued financial standards for private mortgage insurers might embolden MI companies to step up competition with the FHA, according to a new Barclays Research analysis. Such a move, however, would be bad for private MIs at this time, Barclays analysts warned. Buoyed by the changes in the final Private Mortgage Insurer Eligibility Requirements (PMIERs), MI firms could attempt to steal away market share from FHA by going after the agency’s traditional base, the lower-FICO borrower segment. “Such a move would entail significantly more credit risk, something the MI companies may not be comfortable with just a few years after the recent housing downturn,” said analysts. In addition, analysts estimated that return-on-equity after taxes on the lower FICO cohorts are already below the MI’s targeted ...
The Department of Agriculture’s Rural Housing Service now requires appraisals for all guaranteed single-family rural mortgages to be submitted with color photographs of the property to avoid delays in loan processing. The requirement is part of the agency’s effort to fully automate the RHS single-family housing guaranteed loan program. The program’s transition from a paper-based to a paperless documentation system began on March 28. Under the new system, lenders can upload all required origination documents electronically into the RHS Guaranteed Underwriting System and store them in the agency’s imaging repository. Black-and-white photos or copies of rural housing appraisals do not register clearly when uploaded and indexed into the system. This makes it difficult for agency reviewers to evaluate the condition and appearance of the property, causing delays in the ...
Freddie Mac has announced a new “modification solution” screen in Workout Prospector (WP) to facilitate the settlement of modifications of mortgages guaranteed by the Department of Agriculture’s Rural Housing Service. Before entering the data through the modification solution screen, servicers must first have RHS’ written approval to modify the loan, according to latest servicing guidance from the government-sponsored enterprise. When submitting data to Freddie via Workout Prospector, the servicer must complete the data entry in accordance with the instructions in the WP user’s guide and the terms of the RHS modification-approval letter, the GSE said. After completing its review of the data, Freddie will change the WP system status to either “approved” or “declined” with respect to the modification of an RHS mortgage. However, the change does not constitute an approval or denial of the ...
VA Clarifies HUD-1 Itemization Requirements. The Department of Veterans Affairs’ Home Loan Guaranty office has issued guidance clarifying HUD-1 documentation and itemization requirements. The HUD-1 is a statement lenders furnish to borrowers at closing showing the actual settlement costs, including amounts paid to and by the settlement agent. The guidance clarifies and establishes VA policy regarding the following: itemization of lender/seller credits in the 200 series of the HUD-1; itemization of line 801 on the HUD-1; clarification that credits reflected on line 803 of the HUD-1 cannot offset allowable fees’ and itemization of line 802 on the HUD-1. Ginnie Mae Announces Update to Securitization of USDA Section 538 Multifamily Loans. Ginnie Mae has enhanced the securitization of rural, multifamily housing loans with a Department of Agriculture guaranty to make affordable housing available to ...
Mortgage lenders originated an estimated $360.0 billion of first-lien home loans during the first three months of 2015, lifting the market to its strongest quarterly volume since the third quarter of 2013, according to a new Inside Mortgage Finance analysis and ranking. The first-quarter total originations estimate does not include home-equity lending, which many lenders consider a separate business from traditional mortgage lending. In the past, Inside Mortgage Finance included home-equity in total originations, and those market estimates are not being revised. In 2014, about 5.7 percent of total originations ($71.0 billion) were home-equity loans. A number of survey participants have reported...[Includes two data charts]
In the first quarter, the top sequential gainers were all nonbanks: loanDepot (up 50.6 percent), Caliber Home Loans (46.2 percent) and Stearns Lending (22.6 percent.)
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