FHA loan volume continued to decline in the first half of 2014 despite continuing improvement in the quality of new originations and a high demand for purchase mortgage loans, according to Inside FHA Lending’s analysis of agency data. Overall, FHA production for the first six months of the year, excluding reverse mortgages, totaled $61.1 billion. While originations were up 16.0 percent in the second quarter, it was down a hefty 51.8 percent on a year-over-year basis. Purchase loans accounted for $47.3 billion of new FHA-insured loans made over the six-month period while an estimated $58.4 billion of loans had fixed interest rates. For FY 2014, volume was down 19.0 percent. “In FY 2013, approximately 702,000 FHA-insured loans were originated and this year we’re running at 560,000 loans, which is roughly 20 percent of last fiscal year’s total,” said an FHA analyst. “In the first quarter, approximately ... [1 chart]
FHA lenders have been lending more aggressively to borrowers with FICO scores below 679 than to more affluent borrowers, according to recent research by an independent housing and consulting firm. Using data from the Department of Housing and Urban Development and interviews with mortgage industry executives, researchers at John Burns Real Estate Consulting found that homebuyers with less-than-stellar credit are finding it easier to buy a home below the FHA loan limit. In contrast, the study also found that automated underwriting prevents many highly qualified borrowers from obtaining a home loan because their “income situation does not fit squarely in the credit box.” This segment includes affluent retirees, self-employed, or commissioned salespeople. “In the aftermath of the housing crisis, the reality is that we are lending aggressively to the poor and conservatively to the rich,” said Lisa Marquis Jackson, senior vice president at John Burns. The study’s findings challenge ...
An estimated $65.5 billion of FHA-insured mortgages, excluding reverse and modified loans, were included in Ginnie Mae mortgage-backed securities issued during the first six months of 2014, according to an Inside FHA Lending analysis of agency securitization data. Ginnie Mae FHA MBS issued during the first half of the year nearly matches the total number of new FHA loans originated over the same period (see related chart, p. 4-5). FHA purchase home mortgages served as collateral on 76.3 percent of Ginnie Mae MBS issued over the six-month period, while loans to first-time homebuyers accounted for 63.0 percent of Ginnie MBS issued during the period. The FHA loans in Ginnie pools over the last two quarters showed an average FICO score of 681, a loan-to-value ratio of 92.5 percent and an average loan amount of $169,093. Except for fifth-ranked Freedom Mortgage, the rest of the top five ... [1 chart]
A decision by the Department of Housing and Urban Development to suspend a Texas mortgage firm and its top executive was not “arbitrary and capricious” and did not violate due process, according to a recent Houston district court ruling. The court granted HUD’s motion for summary judgment and dismissed all of the plaintiffs’ claims with prejudice. In Allied Home Mortgage Corp. v. Donovan, (No. H-11-3864, 2014 WL 3843561, S.D. Tex. Aug. 5, 2014), a U.S. Attorney’s Office sued Allied Home Mortgage Corp. and its chief executive officer, James Hodge, in Manhattan federal district court for allegedly lying about its compliance with FHA requirements. Specifically, the former Houston-based mortgage net branch operator (currently doing business as Allquest Home Mortgage Corp.) allegedly violated the False Claims Act and the Financial Institutions Reform, recovery and Enforcement Act by ...
Two states have passed legislation placing varying spins on the Department of Housing and Urban Development’s counseling requirements for lenders and borrowers of FHA-insured reverse mortgages. In California, the state Senate unanimously approved AB 1700, which would mandate a seven-day “cooling off” period between the time a borrower receives counseling and when an application is taken. AB 1700 passed the CA Assembly by a vote of 73 to 1. In addition, the bill would require a lender to provide a worksheet guide that addresses certain issues the borrower should consider and discuss with the counselor, such as income and ability to repay as well as taxes and insurance. The counselor and the borrower are both required under the bill to sign the worksheet guide before any reverse mortgage application is taken. No schedule has been set for ...
The Department of Housing and Urban Development is requesting feedback from stakeholders regarding proposed policy drafts covering appraiser eligibility and oversight, and conducting appraisals, among other things. The documents will be part of the FHA’s Single-Family Housing Policy Handbook, a consolidated and authoritative agency handbook that will make it easier for stakeholders to do business with the FHA. The drafts also cover appraiser requirements for performing an FHA appraisal, including property eligibility requirements for Title II forward and reverse mortgages, as well as forms and data delivery requirements. Comments must be submitted by Sept. 2, 2014. The Single-Family Policy handbook is a multi-phased initiative to develop a single, comprehensive source for FHA single-family housing policy using clear and direct language and an improved organization structure. In fall 2013, the FHA posted its first draft section, Application Though Endorsement for Title II Forward Mortgages. The FHA is finalizing ...
Due diligence providers that work on MBS and ABS also will have to provide certifications to the rating services which will be disclosed on each rating issued.
Back in the 1980s, when Fannie Mae was losing $1 million a day, it contemplated selling the property and came up with a value of $10 million to $15 million. Today, it's worth much more than that.
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