Correspondent lenders working to sell originations to Redwood Trust are particularly comfortable with how the jumbo conduit handles appraisals. Redwood offers validation of appraisal values early in the underwriting process, providing lenders with some assurance that disagreements regarding an appraised value won’t prevent a delivery to Redwood. During a recent webinar hosted by Inside Mortgage Finance Publications, Jonathan Groesbeck, a managing director at Redwood, said appraisal validation is one of ...
The Republican leadership of the House Financial Services Committee this week unveiled a comprehensive housing finance reform bill, including a series of proposals to “right size” the FHA, redefine its mission and reestablish it as a stand-alone agency. At the same time, Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, announced they have reached a bipartisan agreement on legislation that would ensure the solvency of the FHA. Both lawmakers expect to introduce a bill next week. The House FHA reform measures were introduced in tandem with reform proposals for ...
The FHA has proposed measures to strengthen its oversight of FHA lenders and each measure could potentially increase lenders’ liability and compliance risk, compliance experts warned. Published for comment in the July 9 Federal Register, the proposals are part of a new enforcement regime that the FHA is considering to monitor and sanction lenders. They cover statistical sampling, origination quality standards, annual reviews, compare ratios, and indemnification and other remedies for loan defects. The proposed enforcement measures, however, raise a ...
The New York State Department of Financial Services has directed FHA lenders to refrain from applying the FHA’s higher mortgage insurance premiums in calculating a loan’s annual percentage rate and fully indexed rates for 60 days to prevent loans from becoming “high cost” or subprime. At the same time, the department issued guidance to conventional lenders on how to interpret existing provisions in state banking law regarding subprime loans. Statutory changes were made in 2009 to prevent some loans from becoming “subprime,” as defined by state law. Spikes in mortgage interest rates in the past few weeks plus ...
A post-endorsement review of FHA loans during the first quarter of 2013 has revealed a high percentage of materially defective loans.The defects apparently went undetected during the underwriting process and were uncovered only during a loan-level review that the FHA routinely conducts to ensure that newly originated, higher-risk loans comply with agency requirements. The Department of Housing and Urban Development’s Office of Lender Activities and Program Compliance reported that 44 percent of 6,251 single-family mortgage loans that were reviewed in the first ...
The Department of Housing and Urban Development is adopting the mortgage banking industry’s data standards format for the FHA’s TOTAL Mortgage Scorecard, which HUD uses to evaluate the credit risk of FHA loans that are submitted through an automated underwriting system. The standards were developed by the Mortgage Industry Standard Maintenance Organization (MISMO), a nonprofit subsidiary of the Mortgage Bankers Association. MISMO is an open data standards group that promotes consistency among mortgage transaction participants to reduce loan processing costs, increase transparency, and ultimately ...
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