Now that Housing and Urban Development Secretary Ben Carson has sworn in a new FHA commissioner, reverse mortgage lenders are hoping to see some changes in the Home Equity Conversion Mortgage program. The National Reverse Mortgage Lenders Association is planning to ask FHA Commissioner Brian Montgomery for changes in the HECM program, particularly at the back end, to make it more profitable for lenders. Peter Bell, the group’s chief executive officer, believes there are opportunities to reduce the cost of the HECM program to the FHA fund by having better servicing procedures. “We would like to see certain loss mitigation procedures in the new HECM rules to be made available to all reverse-mortgage loans,” he said. Some of those procedures apply only to loans originated on or after the new rules became effective, such as “cash for keys.” Cash for keys is a cash offer by a lender to a ...
All home loans with a VA guarantee, including Interest Rate Reduction Refinance Loans, require a lender’s certification, according to the Department of Veterans Affairs. In recent guidance, the agency clarified that the lender certification requirement applies to all VA-backed loans, and is not contingent upon the type of VA loan. Jeff London, director of the VA Loan Guaranty Service, said there have been inquiries from lenders and the VA regional loan centers regarding the validity of the lender certification on an IRRRL. The lender certification is required on IRRRLs, whether or not underwriting is required, London clarified. Under VA rules, lenders must certify that the VA loans they originate comply fully with the law and meet VA’s underwriting standards. The IRRRL is a streamlined program that requires very little verification yet allows veterans to refinance at a lower rate based on their ...
One policy issue that could land on FHA Commissioner Brian Montgomery’s desk soon is whether potential borrowers who were granted temporary status under the Obama-era Deferred Action for Childhood Arrivals are eligible for FHA-insured loans. Mortgage lenders are divided on the issue and may soon ask the newly installed head of the FHA for guidance, said Brian Chappelle, a mortgage industry consultant. President Obama created the DACA program in 2012 to allow undocumented immigrant children to stay temporarily in the U.S. for two years without fear of deportation. They have an opportunity to renew their DACA status towards the end of their second year. To qualify for DACA, the undocumented child must have arrived in the country before they were 16 years old or be younger than 31 on June 15, 2012. They must have lived continuously in the country since June 2007. A person protected under DACA is ...
The U.S. Department of Agriculture Rural Housing Service has issued guidance detailing requirements for refinancing its direct and guaranteed rural-housing loans. Direct and guaranteed are both Section 502 loan programs but are different from each other. The lender for guaranteed home loans is a privately owned thrift, bank or mortgage company, which is also the servicer of the loan. The lender for the direct program is the RHS, while USDA Rural Development, which includes RH, is the servicer. Guaranteed borrowers are capped at 115 percent of the area median income while income levels for direct borrowers must not exceed 80 percent of AMI. Guaranteed borrowers are not eligible for payment assistance, which can lower the interest rate on the mortgage to as low as 1 percent. The assistance is for direct borrowers and is based on borrower income as a percentage of AMI. Finally, borrower protections differ ...
It’s official: The Treasury Department’s goal is to reduce the footprint of Fannie Mae and Freddie Mac. Who says so? Treasury counselor Craig Phillips...
Expanded-credit products look to be a ray of sunshine in an otherwise gloomy mortgage market. Originations of the loans increased in the first quarter of 2018 while production in many other product categories declined, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $10.1 billion of expanded-credit mortgages were originated in the first quarter of 2018, up 3.1 percent from the previous quarter and a 13.5 percent ... [Includes one data chart]
Demand for jumbo mortgages was expected to decline due to various provisions included in tax reform legislation but applications for jumbos didn’t dip in early 2018, according to CoreLogic. The analytics firm tracked loan applications in high-cost areas, concentrated in California and the northeast. Applications for purchase mortgages in the first quarter of 2018 were compared with trends seen in the prior four years. “We didn’t observe any meaningful change in purchase loan application ...
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