Originations of interest-only mortgages increased significantly in the second quarter of 2016, particularly at PHH Mortgage, according to a new ranking by Inside Nonconforming Markets. A group of 12 lenders had $12.65 billion in IO originations in the second quarter, up 44.7 percent compared with the previous quarter. A large amount of the increase in volume was driven by PHH, which more than doubled its IO originations in that span. PHH had $6.25 billion ... [Includes one data chart]
Originations of non-qualified mortgages could reach $100.0 billion a year, according to officials at three prominent nonprime lenders. Since QM standards from the Consumer Financial Protection Bureau took effect at the start of 2014, non-QMs such as jumbo mortgages with interest-only terms have predominantly gone to affluent borrowers. However, officials at Angel Oak Mortgage Solutions, Deephaven Mortgage and Citadel Servicing see promise in originations for ...
The Department of Veterans Affairs is working on a change to its existing streamline refinancing policy to address a problem that is giving VA and Ginnie Mae the fits. Under the VA’s qualified-mortgage rule, a VA borrower must wait six months and show six months’ worth of mortgage payments before they can refinance into an IRRRL (Interest Rate Reduction Refinance Loan) and take advantage of the lower rate. However, it seems not all VA lenders are adhering to the rule and that a good number are refinancing veterans into IRRRLs even before the mandatory seasoning period ends for fear interest rates might rise and the borrower might not benefit from the lower rate. “I’ve redone the numbers in 20 different directions on how much a borrower would save if they had to wait two more months and the rate went up a quarter of a point because they lost those two months ...
VA lenders recorded a strong first half for 2016, thanks to a substantial boost in production in the second quarter, agency data show. VA guarantees on purchase and refinance mortgages totaled $83.5 billion for the first six months, as lenders made a strong second-quarter push that brought production up by 29.9 percent. Streamlined refinancing, also known as Interest Rate Reduction Refinance Loans (IRRRLs), comprised a hefty portion of total VA originations – 21.7 percent. VA has been particularly strong in the refinance segment over the last six months, racking up $44.3 billion in total refi volume, far exceeding FHA’s $36.4 billion and private mortgage insurers’ $21.6 billion. (see IFHA/VA Lending, 8/9/16.) Overall, FHA remained the top mortgage insurer in the government-backed lending market with $123.0 billion, compared to VA’s $84.8 billion. Loans with primate MI totaled $102.7 billion ... [ 1 chart ]
The Department of Veterans Affairs has made recommendations to VA lenders and borrowers calling in with questions and problems at VA regional centers to avoid long wait times and have their concerns resolved as quickly as possible. In a recent memo to lenders, the VA Loan Guaranty Service is reporting that many of its regional loan centers (RLC) are being swamped with calls due to record increases in VA originations in recent months. While this suggests that more veterans are using their housing loan benefit than ever before, the large volume of calls to VA has caused long hold times for callers and delayed processing of borrower certificates of eligibility (COE). To cut down on the waiting time, the VA urged lenders and borrowers to consider several things before making the call. First, do not call to check on the status of a COE request if there is no urgent need, like an ...
VA Home Loan Guaranty has issued clarification regarding title requirements for manufactured or mobile homes conveyed to the Department of Veterans Affairs. Effective immediately, VA is requiring proof of noteholders’ compliance with the agency’s requirements for guaranteed mobile-home financing. Foreclosure title packages that do not include the required documents will be rejected, the agency warned. Under federal law, a manufactured home must be permanently affixed and classified as real property in the state where it is located. VA will not guarantee financing if the property does not meet the criteria. To ensure that a guaranty claim is fully payable and that the holder has the option to convey the manufactured home to VA, servicers must ensure that home loans with a VA guarantee meet federal requirements. Under the clarified VA guidelines, servicers may submit the ...
New FHA guidance for dealing with mortgages with a Property Assessed Clean Energy (PACE) obligation went into effect last week but uncertainty lingers and its full impact remains to be seen, according to an industry attorney. The Department of Housing and Urban Development has issued guidance specifically allowing properties encumbered by a PACE lien to be eligible for FHA mortgage financing for both purchase and refinance loans. The department of Veterans Affairs has issued similar guidance. According to Erika Sonstroem, an attorney with the law firm Bradley Arant Boult Cummings, the PACE industry is touting the guidance in its pitches to lenders as posing no risk to mortgage investors. PACE is a program that lends money to homeowners for home-energy savings projects. It is treated much like a tax lien on a property and is included in the ...
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