FHA reverse mortgage lenders capped the third quarter of 2016 with a 2.2 percent volume increase over the previous quarter, ending the first nine months with $11.0 billion in new Home Equity Conversion Mortgage loans. The year-over-year story, however, was different, as nine-month originations fell 10.5 percent from the same period last year. Purchase HECMs comprised the bulk of originations, 86.3 percent. Unlike in FY 2015, when the Mutual Mortgage Insurance Fund’s healthy HECM portfolio helped pushed the capital reserve ratio above the statutory 2.0 percent requirement, the portfolio appeared to be in bad shape in FY 2016. The fiscal 2016 actuarial audit of the MMIF projected a negative $7.7 billion economic value for the HECM program, dramatically down from last year’s estimated $6.8 billion. Auditors attributed the decline to adverse effects of “incorporating deeper ... [Chart]
The flow of rural housing loans into Ginnie Mae securities saw a significant spike in the third quarter of 2016, thanks to increased market activity. Approximately $13.7 billion in USDA loans were delivered into Ginnie Mae single-family pools over a nine-month period, punctuated by a 32.1 percent surge in volume in the third quarter. Production was up a mere 1.2 percent year over year. Top USDA issuer Chase Home Finance accounted for $3.4 billion of securitized rural housing loans while in distant second place, PennyMac closed the quarter with $1.4 billion. Wells Fargo ($951.3 million), Freedom Mortgage ($876.6 million), and Pacific Union ($394.4 million), in sequential order, comprised the rest of the top five USDA issuers. Freedom Mortgage saw its volume increase tenfold both on a quarter-to-quarter and year-over-year ... [Chart]
Housing counselors participating in the Department of Housing and Urban Development’s various programs must be certified to offer counseling services to consumers, according to a final rule issued this week by the agency. In order to become certified, housing counselors must pass a standardized written examination and work for a HUD-approved housing counseling agency (HCA). Applicants must demonstrate proficiency in six areas of housing counseling: financial management, property maintenance, responsibilities of homeownership and tenancy, fair housing laws and requirements, housing affordability, and avoidance of mortgage delinquency, eviction and default. Despite its recent release, the final rule will take full effect three years following the announcement of the certification exam. HUD will offer intensive training and study resources in English and Spanish to ...
The growing popularity of private-label servicing and the way it’s offered to lenders are raising regulatory questions, underscoring the need for guidance and supervision, according to legal experts. With the most comprehensive offerings of private-label servicing, the borrower never knows the subservicer exists, and that’s the point of the arrangement, according to Craig Nazzaro, of counsel at the Atlanta-based law firm Baker Donelson. Nazzaro attributes...
While the deal includes many non-QMs and IOs, along with a “tier 3” representation and warranty framework, the senior tranche of the MBS will include credit enhancement of 5.75 percent.
Home-equity lending cooled off in the third quarter of 2016 as consumers took advantage of low interest rates to refinance rather than draw down more second-mortgage debt. Lenders originated an estimated $50.7 billion of home-equity loans during the third quarter, including home-equity lines of credit and closed-end second mortgages. Although that was down 5.2 percent from the second quarter, it still marked the second highest three-month volume since the housing market collapse in 2008. And depository institutions, the dominant lenders in the HEL market, reported...[Includes three data tables]
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