Upcoming changes from the Internal Revenue Service will allow for a completely paperless mortgage application process, according to industry participants. Beginning Jan. 7, the IRS will allow electronic signatures for IRS Form 4506-T, request for transcript of tax return. The electronic signatures will be allowed for tax transcripts ordered through the IRS Income Verification Express Services. “The requirement of a manual signature on the IRS 4506-T was the last significant impediment to a truly ...

In a development that might catch the attention of officials at the CFPB who are working on improving consumer disclosures under the Real Estate Settlement and Procedures Act and the Truth In Lending Act, more evidence has emerged that consumers aren’t very big on using TILA forms to comparison shop for mortgages.A new study from Fannie Mae found that nearly half of lower‐income respondents and more than a third of higher‐income respondents get quotes from only one mortgage lender. The survey also confirms findings in other reports that “a substantial portion of all consumers do not understand key mortgage elements.”

Originations of non-agency jumbo mortgages through three quarters in 2012 increased by 23.3 percent compared with the same period in 2011. While 12 non-agency jumbo mortgage-backed securities have been issued this year, jumbo originations are largely being held in portfolio by banks competing for high-quality borrowers. An estimated $148.0 billion in non-agency jumbos were originated through the first nine months of 2012, including an estimated $52.0 billion in ... [Includes one data chart]

Wells Fargo announced that the Securities and Exchange Commission recently completed an investigation of the company’s disclosures from mortgage-backed security offering documents and no enforcement action will be taken. Arcus Lending, a mortgage broker and a direct lender in California, recently started offering an 80/10/10 mortgage in an effort to allow borrowers to avoid private mortgage insurance. “There is a huge need for such a program and very few lenders ... [Includes two briefs]

The FHA is working on a statistical model that incorporates new factors to help the agency target loan-level compliance reviews and in-depth lender examinations more precisely, according to a top agency official. The model’s selection criteria is not lender-specific but focus instead on attributes in the loan file that have the highest propensity or probability of containing a material deficiency or defect that could result in a loss for the FHA insurance fund, said Justin Birch, director of the FHA Quality Assurance Division. The model was developed for post-endorsement reviews, which currently are ...

The mortgage banking industry is urging Congress to reject the FHA’s call to eliminate the existing “knew or should have known” standard in the National Housing Act in connection with an agency proposal to extend indemnification authority to all direct-endorsement lenders. Both proposals are part of legislative and administrative measures sought by the FHA to strengthen its capability to manage risk and protect its Mutual Mortgage Insurance Fund. A recent independent actuarial review of the fund found that in FY 2012 the economic value of the FHA’s single-family portfolio had dropped to negative $13.5 billion (excluding Home Equity Conversion Mortgage loans) and that ...

The Department of Housing and Urban Development this week clarified that mortgages using cash investment funds provided under a government housing assistance program to meet the FHA’s 3.5 percent downpayment requirement are eligible for FHA insurance. HUD issued the interpretive rule to clarify the confusion caused by a provision in the National Housing Act that prohibits certain sources of a homebuyer’s funds for the required minimum FHA downpayment on a home loan. Because of this provision, cash investment funds provided by federal, state and local homeownership assistance programs to first-time and lower-income homebuyers may be deemed ...

The FHA has extended a temporary waiver of its regulation that prohibits property flipping in the single-family mortgage insurance program to encourage more investors to participate in agency efforts to ease its burgeoning inventory of real estate-owned properties. First issued in January 2010, the regulatory waiver is now effective through Dec. 31, 2014, after two previous adjustments since issuance. Prior to the waiver, a mortgage was not eligible for FHA insurance if the purchaser sold the property within 90 days of its acquisition and is ...

FHA endorsements jumped 18.8 percent in October from the previous month and by more than half from a year ago, with mortgagees accounting for 80 percent of production, according to Inside FHA Lending’s analysis of FHA data. FHA originations, excluding Home Equity Conversion Mortgage loans, totaled $22.8 billion in October, up from $19.2 billion in September and 56.4 percent more than a year ago. Fixed-rate forward mortgages accounted for nearly all FHA loans produced during the month, with purchase mortgages having a slight edge in the mix over refinances. Top-ranked Wells Fargo outdid other lenders in October with ...

Thanks to the Federal Reserve’s aggressive support for the agency mortgage market and continuing strength in the refinance program for underwater Fannie Mae and Freddie Mac borrowers, mortgage refi activity has accounted for 73.1 percent of 2012’s surging production volume. But home-purchase lending started to regain some market share during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. An estimated $143 billion of home-purchase mortgages were originated during the third quarter, up 10.9 percent from the previous three-month period. By comparison, refinance production was up just 2.8 percent from the second quarter. The purchase-mortgage sector still has...[Includes three data charts]