FHA forward originations increased modestly in the second quarter while Home Equity Conversion Mortgage production hit its lowest three-month volume since late 2012. Forward endorsements totaled $51.6 billion in the second quarter, up 5.4 percent from the previous period. It was a different story, however, at midyear where volume was down 16.6 percent from the previous year. Fixed-rate mortgages accounted for the majority of FHA forwards produced from April through June, ending the quarter with $51.3 billion, up 5.1 percent from the first three months of 2018. FHA adjustable-rate mortgages posted a whopping 88.7 percent increase to end the quarter with $307.4 million. FHA purchase activity rose 19.7 percent, closing the quarter with $41.7 billion, while streamlined refinancing dropped 41.3 percent from the prior period. Conventional-to-FHA refi business also was off ... [Charts]

The Mortgage Bankers Association is seeking clarification from FHA on a number of issues in the agency’s Single Family Housing Policy Handbook following Brian Montgomery’s swear-in as FHA commissioner. The MBA identified seven priority issues which lenders say need further guidance. The issues include the following: Deferred Action for Childhood Arrivals and employment authorization documents; Third-party underwriting and vendor verification of borrower income, employment, and assets; Student loan debt calculation; Rent below fair market; Minimum decision credit scores; Contract for deed; and Community transfer fees. In September 2017, President Trump rescinded DACA, a special program created by the Obama administration to provide temporary legal status and work permits to underage persons who entered the U.S. illegally until the government decides ...

The U.S. Department of Agriculture’s Rural Housing Service is considering whether to modify the maximum interest rate charged on single-family rural mortgages with a USDA guarantee. The RHS, which administers the USDA’s guaranteed rural housing program, is seeking public input on how establishing a maximum interest rate could affect lending to potential borrowers. The agency is also seeking comments on how the maximum rate could be modified to help those rural folks who could not obtain a conventional loan become homeowners, finance housing repairs and rehabilitation costs in relation to a home purchase, and refinance an existing USDA loan to lower the rate. The USDA Section 502 Handbook defines the maximum allowable interest rate as “the current Fannie Mae posted yield for 90-day delivery (Actual/Actual), plus one percent for 30-year fixed-rate, conventional loans, rounded up to the ...

Guild noted that unlike other low-down payment programs, the 3.0 percent downpayment can be funded by a gift.

Borrowers cited “best interest rate” as the reason they went with a particular lender in only 2.0 percent of purchase-mortgage transactions and 6.0 percent of refinances.

“After carefully evaluating market conditions and consumer needs, we are reducing to better align with current volumes,” Wells said.

Originations of expanded-credit mortgages failed to keep pace with total first-lien originations in the second quarter, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $11.40 billion of expanded-credit mortgages were originated in the second quarter, a 12.9 percent increase from the previous quarter. Total first-lien production increased by 17.1 percent during that time, according to Inside Mortgage Finance. Expanded ... [Includes one data chart]

Aggregators of jumbo mortgages have seen margins on their business decline as competition increases for the loans. Redwood Trust had $9.0 million in net income from its residential mortgage banking segment in the second quarter of 2018, down from $21.0 million in the previous period. Officials said the decline was due to lower margins during the second quarter. The real estate investment trust didn’t disclose specific figures other than to note that during the second quarter ...

The residential mortgage market took an unusual turn in the second quarter as retail production gained ground under conditions that generally favor third-party channels. [Includes four charts.]

Despite stiff headwinds, first-time homebuyers still play a key role in the mortgage market and that’s not expected to change anytime soon, according to industry insiders.