Fitch Ratings just released its finalized criteria for analyzing loans securing non-agency residential mortgage-backed securities under the qualified mortgage standard and ability-to-repay rule. Fitch said it will require more credit enhancement to loans that do not benefit from the QM safe harbor protection. Second, credit enhancement will be based on pool probability of default, which projects the maximum number of borrower challenges, as Fitch expects borrowers will only make a claim that the lender violated the rule as a defense to foreclosure.

Coping with the potential for fair lending violations in the new qualified-mortgage world is a source of high anxiety for many compliance professionals in mortgage finance. But Gregory Imm, chief compliance officer and director of community affairs and fair lending and responsible banking at Fifth Third Bank, recently shared some lesser-known considerations that should increase industry representatives’ confidence in their compliance and readiness. Speaking to participants in a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Imm said the first area is measurement. “Institutions need to establish key performance risk indicators of what should be measured, and not what is convenient to measure,” he said. “I say ‘convenient’ because those are the activities that are easy to measure because you have the data at your fingertips.”

According to industry sources, UGI wanted the new trade association to operate on the principle of unanimous consent both for budgetary and policy matters, which was opposed by other MIs.

"The facts regarding the department's work on mortgage fraud tell a much different story than this report," said a spokeswoman for the Department of Justice.

The residential MBS issued in 2013 equaled 78.5 percent of primary market originations, the highest securitization rate since 2010, according to a new Inside MBS & ABS analysis. The mortgage securitization rate typically moves higher when primary-market originations are declining because of the time lag between loan closing and MBS issuance. Last year started with a bang – $560 billion in new originations – and ended with a whimper, $305 billion. In the conventional conforming market, Fannie Mae and Freddie Mac MBS issuance – even after excluding loans that were more than three months old when they were securitized – represented...[Includes one data chart]

For those of you tracking the lawsuits filed by GSE preferred investors against the federal government, one attorney told us this week that: “These cases won’t be resolved for years." Meanwhile, it appears that the CSP still has no CEO.

Nationstar Mortgage joined Ocwen Financial last week under the glare of the New York Department of Financial Services’ spotlight. Ben Lawsky, superintendent of the NYDFS, said the state regulator has received hundreds of complaints about Nationstar’s practices, including problems with loan modifications, improper fees and lost paperwork. “Our department has significant concerns that the explosive growth at Nationstar and other nonbank servicers may create capacity issues ...

The Chinese Year of the Horse welcomed the FHA with a hard kick in the head as total originations fell 20 percent in January from December 2013. Even as rising interest rates slowed refinancing activity last year, the expected increase in purchase-mortgage lending barely materialized and, in fact, appears to be dropping off. Lenders reported $8.7 billion in new originations in January, down from $10.9 billion in December and $23.7 billion from a year ago. Most were fixed-rate mortgages and 77.1 percent were purchase transactions. Three of the top five FHA lenders – Quicken Loans, JPMorgan Chase and LoanDepot – reported purchase origination totals below 40 percent. Top-ranked Wells Fargo and Bank of America each reported 64.0 percent of total FHA originations as purchase transactions. Wells Fargo closed the month with $519.0 million despite a ... [2 charts]

Legislation seeking a recalculation of the Department of Housing and Urban Development’s loan limits for 2014 was introduced this week in the House of Representatives. Authored by Rep. Gary Miller, R-CA, H.R. 4208 (The Stabilizing FHA Loan Limit Calculation Act of 2014), would address credit availability problems caused by the statutory change in the way FHA loan limits are calculated and by revised median housing prices. More than 650 counties throughout the country saw their median house prices drop, some by as much as 20 percent to 50 percent, because of the 2014 calculation. Approximately 93 percent of California’s housing market or 54 counties have experienced severe declines in their FHA loan limits in 2014. For example, in Miller’s Riverside-San-Bernardino-Ontario district, the median price for a one-unit property fell from $500,000 in 2013 to $355,350 in 2014 – a 30 percent difference. In 2013, an estimated 8,000 home sales with ...

The Department of Housing and Urban Development has completed modifications to its Home Equity Reverse Mortgage Information Technology (HERMIT) system to accommodate new premium structures and initial disbursement limits that were implemented last September. Launched in October 2012, HERMIT is HUD’s online-web-based automated system for monitoring and tracking its Home Equity Conversion Mortgage portfolio, collecting mortgage insurance premiums (MIP) and paying insurance claims. Lenders also access HERMIT to notify HUD of a borrower’s death and the initiation of foreclosure. While HUD had already modified FHA Connection and released an updated version of the HECM calculation software to accommodate the latest modifications, changes to the HERMIT system were delayed until now. HUD instructs FHA lenders to follow the mapping instructions for borrowers’ mandatory obligations in HERMIT to ...