Ginnie Mae is considering a tiered rating system to ensure that all participants in its mortgage securities program have sufficient liquidity and capital to meet their counterparty obligations. The agency is still fleshing out the idea of an “A-tier” issuer, which would likely develop into a policy in the near future, said Michael Bright, executive vice president and chief operating officer, during a recent interview with Inside FHA/VA Lending. “An A-tier issuer would be [a company that] has gone above and beyond in helping put together for us a risk management and liquidity plan that does not rely on liquidity providers, and whose defect and cure rates are low,” he explained. Such issuer/servicers also would be well capitalized. Ginnie is developing the metrics for such a system, as well as incentives for the A-tier issuers, Bright said He added that top-rated firms would be eligible for “concierge services” from the ...
The Department of Veterans Affairs recently withdrew a directive that was part of an early disclosure requirement for Interest Rate Reduction Refinance Loans just days after the measure took effect. Although the early disclosure measure became effective for IRRRLs closed on or after April 1, 2018, VA’ “Frequently Asked Questions” guidance issued on April 5 clarified some of the earlier provisions and removed a new disclosure to address lender concerns. The current VA Lenders Handbook requires a veteran to sign a statement showing he or she understands the effects of the IRRRL and how long it would take to recoup all closing costs. If the veteran’s monthly payment increases by 20 percent or more, the lender must certify that the borrower qualifies for the new monthly payment. The handbook, however, is unclear as to when the statement and lender certification must be delivered. Consequently, some ...
FHA-insured loans accounted for a modest chunk of mortgage-related consumer complaints submitted to the Consumer Financial Protection Bureau last year. According to the CFPB’s annual report on consumer disputes, the bureau received approximately 37,300 mortgage complaints in 2017, 13 percent of which were related to FHA mortgages. Loans with a VA guaranty and FHA-insured reverse mortgages accounted for 4 percent and 2 percent of the complaints, respectively. Conventional home mortgages had the biggest share of mortgage complaints – 48 percent – followed by “other type of mortgage” at 28 percent. Six percent of mortgage complaints were about home-equity loans or home-equity lines of credit. For mortgage complaints, 41 percent involved making payments (such as those involving servicing, escrow accounts and posting of payments), while 37 percent were related to borrowers’ ....
Lenders will now be able make VA loans to veterans who wish to purchase or refinance a home that needs alteration or repair, under new guidance issued by the VA. According to the VA, it has received inquiries from lenders that have expressed interest in originating and processing loans to finance home alteration and repair. The agency noted that the aging housing stock in the U.S. has spurred an increased demand for such loans. Due to their physical condition, older homes are often sold as “cash or conventional financing,” which immediately excludes VA financing and deprives veterans the opportunity to use their VA benefit. The new policy guidance makes the VA guaranty available to lenders looking to finance home alteration, repair, renovation and improvement. It also allows improvements to be included in the value and completed after the loan is closed. The lender disburses the loan proceeds to the ...
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