Jumbo lenders do not expect the higher FHA loan limits to have any adverse impact on their GSE business. Anyone seeking a loan above $625,500 only has one choice, and that is FHA, but the real question is how much business the conventional market would lose to FHA, lenders said. In addition to the higher loan limit, the FHA insures loans of more than 80 percent loan-to-value ratio and requires a 3.5 percent downpayment. The GSEs require a 20 percent downpayment on their jumbos. On the other hand, the private market offers loans above the GSE limits but does not originate loans in excess of 80 percent LTV. “For people seeking under-80 LTV loans, it is unlikely that ... [Includes one data chart]

The Department of Housing and Urban Development has announced a 3 percent cap on the actual financial and closing costs it would pay on behalf of purchasers of HUD-owned single-family properties. The “gross purchase price” is the bid price, before the subtraction of the broker’s sales commission and financing and closing costs. Upon closing of a competitive bid sale of a HUD foreclosed property, the department allows the deduction of buyer financing and closing costs from the proceeds. While the total amount of HUD’s payment will be indicated on HUD Form 9548 (Sales Contract, Property Disposition Program), the actual amount credited by HUD will be ...

President Obama has signed legislation returning funding fees for VA loans to their pre-Nov. 18 levels. The fees specified in H.R. 674, the 3 Percent Withholding, Repeal and Job Creation Act of 2011, are valid through Sept. 30, 2016. Signed on Nov. 21, the bill ends industry confusion over the amount of fees lenders should charge borrowers since the Department of Veterans Affairs, in a case of bad timing, issued new regulations in September to lower the fees. This was before Congress announced its intention to introduce legislation that will extend the higher fees through 2016. Under updated guidance issued by ... [includes one chart]

The mortgage banking industry has been lobbying the Consumer Financial Protection Bureau and Congressional staff recently, expressing its concerns in particular with the ability-to-repay/qualified mortgage proposed rule. Lenders of all sizes expressed their concerns about automated underwriting systems, widely accepted standards, implementation concerns, points and fees restrictions and the need for a legal safe harbor. But the legal safe harbor remains the most important of these issues to most lenders. “The QM ability-to-pay rule has enormous liability associated with it,” an industry lobbyist confided. “The issue there is, if we don’t have a really solid definition as to what a qualified mortgage is, and we don’t have a safe harbor and the guidelines are firm – the industry’s got enormous potential liability and is likely to be sued all the time.”

The Consumer Financial Protection Bureau has released for public comment two alternative versions of a new mortgage disclosure form that would effectively combine the current disclosure requirements of the final federal Truth in Lending Act and HUD-1 Settlement Statement forms, the second phase of the CFPB’s “Know Before You Owe” program. “We are in the process of replacing these two different forms with one disclosure that is easier to use, consistent with our Congressional mandate in the Dodd‐Frank Act,” the bureau said. “We want to give consumers a clear understanding of the final loan terms and costs in one place. This will make it easier to ensure that you receive the loan product you applied for at the cost you agreed to. And we want to give lenders and settlement agents a well‐organized form to make compliance easier.” An “industry tool” asks industry representatives what their preferred format would be for their customers to use at closing to describe final loan terms and closing costs, while a “consumer tool” asks consumers which form they would prefer to be given at closing to describe those items.

President Obama this week signed into law a stop gap spending measure, which, among other things, reinstates temporary higher limits for loans insured by FHA. The minibus bill, which combines several appropriations bill, passed the house on a vote of 298-121. The Senate approved previously approved it 70-30. The measure raises the FHA’s maximum loan limit back up to $729,750 after it had fallen to the permanent statutory level of $625,500 on Oct. 1, and extends it through the end of 2013. The new limit is effective immediately. After being extended three times – in 2008, 2009 and 2010 – the higher loan limits finally expired on Oct. 1 this year and were ...

Legislation that would keep VA funding fees at their current levels through FY 2016 was sent this week to President Obama for signature. The House of Representatives passed the bill, H.R. 674, the 3 Percent Withholding Repeal and Job Creation Act of 2011, on Nov. 16, with amendments from the Senate. The Senate approved the bill on Nov. 10. The president is expected to sign the bill. However, if the bill is not signed by Nov. 18, funding fees will decrease as scheduled for a short period, according to the Department of Veterans Affairs in a published guidance to VA lenders. If funding fees do reset to the lower amounts ...

Home Equity Conversion Mortgage claims increased by a whopping 48.3 percent in FY 2011 from last year, while the number of loans originated under the program also fell on a year-over-year basis, according to Inside FHA Lending’s analysis of FHA data. HECM claims were up to 7,951 in 2011 compared to 5,361 claims filed under the program the year before.

Despite several high-profile retreats from the wholesale production channel in recent months, the mortgage industry was pressed to rely more on mortgage brokers and correspondents to meet the increased consumer demand for refinance loans during the third quarter. A new Inside Mortgage Finance analysis and ranking reveals that wholesale loan production increased by 27.7 percent from the second quarter, while the still-dominant retail channel posted a more modest 15.2 percent gain. Many companies have been paring back their retail capacity during 2011 as origination volumes fell sharply through...(Includes four data charts)

In today’s dramatically changed mortgage lending and regulatory environment, lenders must aggressively manage their originator compensation structures if they want to guarantee their compliance with all applicable laws and regulations, according to a top industry consultant. The first step is “to eliminate all incentive arrangements that pay commissions or bonuses based on any of the terms or conditions of the loans such as interest rates, demand features, prepayment penalties or proxies for these loan terms,” said Henry Oehmann, national executive compensation services executive director for Grant Thornton. Lenders...