While a number of structural issues continue to limit activity in the non-agency mortgage-backed security market, reform of the government-sponsored enterprises would dramatically help the sector’s recovery, according to officials at the Securities Industry and Financial Markets Association. “Issuers and investors are not likely to build the infrastructure necessary for a vibrant private-label securities market until they have a better understanding of how the government’s role ...
Increases to guaranty fees charged by the government-sponsored enterprises along with cross-subsidization policies could prompt bank lenders to shift more of their originations from the GSEs to portfolio. According to a report released last week by the Federal Housing Finance Agency, Fannie Mae and Freddie Mac charged an average g-fee of 60 basis points for 30-year fixed-rate mortgages in 2014, up from 55 basis points the previous year and ...
For the non-agency market, the impact of anticipated action by the Federal Reserve on short-term interest rates depends on whether interest rates on mortgages also increase, according to industry analysts. Industry participants continue to wait for the Fed to increase the federal funds rate and ponder the impact higher rates will have on originations and performance. “The effect of an interest rate increase on new residential mortgage-backed security transactions will ...
Rising home values could present a new opportunity for FHA borrowers to refinance into a conventional loan and enable those borrowers who choose to stay with FHA financing to take advantage of FHA’s reduced annual mortgage insurance premium, according to lenders. With house prices on the rise, FHA borrowers are seeing a build-up in equity. This might be a good time for them to remove that monthly payment and get out of their FHA loan, said Faramaz Moeen-Ziai, vice president of national sales and production at Commerce Home Mortgage in Huntington, CA. With an FHA-insured loan, coverage is for the life of the loan while private mortgage insurance on a conventional is cancellable when paid down to 79 percent of the loan amount. This might be especially beneficial to homeowners living in homes valued far less than what they owe on the property, or to holders of ...
Lending to veterans and members of the U.S. military is expected to trend up in the second half of 2015 as the economy improves further, wages rise and unemployment declines, predicts the country’s top VA lender. “We’re seeing increased activity in housing while house values have gone up modestly, which I expect will continue in the next couple of years,” said Stan Middleman, president and chief executive of Freedom Mortgage. It is a great time for veterans to purchase a home, Middleman said, and he would he like to see more vets become homeowners. However, despite the low interest rates, crisp and clear underwriting and no downpayment required, many veterans are still not taking advantage of the VA program as they should, he noted. Middleman feels he should advertise and market the VA product more. In the past seven months, Freedom Mortgage has added ...
Industry experts are sharply divided on whether the FHA’s financial condition is actually getting better or worse. Potomac Partners, a business consultancy group, is optimistic that the FHA’s Mutual Mortgage Insurance Fund has finally turned a corner with great signs of improvement in the first quarter of 2015. Changes and adjustments made by the Department of Housing and Urban Development since last year have placed the MMI Fund on a positive trajectory to reach its required 2.0 percent capital ratio in 2016. Last year, the fund’s capital ratio improved from a negative 0.11 percent to a positive 0.41 percent and its economic value appears to be improving. Potomac Partners’ analysis looked at FHA risk, loan performance, delinquency rates, debt-to-income ratios, loan-to-value ratios, originations and claims, loss rates as well the effect of the ...
An FHA multifamily lender will face the Department of Housing and Urban Development’s Mortgagee Review Board for violations that caused more than $10 million in losses to the FHA Mutual Mortgage Insurance Fund. HUD’s inspector general recommended that Prudential Huntoon Paige Associates be brought before the board to explain how it underwrote a $19.9 million loan to develop a multifamily project for seniors in Lewisville, TX. Prudential is a Multifamily Accelerated Processing (MAP) approved lender authorized to prepare, process, review and submit loan applications for FHA multifamily mortgage insurance. The 151-unit “Amaranth at 544” project caught the IG’s eye because of early default, assignment and the significant dollar amount involved. The IG identified several underwriting deficiencies, including inadequate cash reserves at loan closing, unsupported ...
The Department of Veterans Affairs has announced measures lenders may employ to provide relief to VA borrowers whose lives and homes were upended by recent severe storms, tornados and flooding in Texas, Oklahoma and Guam. VA mortgage relief would be available to the families of borrowers who died during these natural catastrophes and to borrowers whose homes were badly damaged or destroyed. Relief is also available to those whose work environments were destroyed or severely damaged. Other people have been indirectly affected as well, and the impact may continue to ripple throughout the country, as evacuees travel nationwide to seek support and shelter from family members in unaffected areas, according to the VA. VA encourages holders of guaranteed loans to extend forbearance to distressed borrowers and to provide counseling to them. Lenders are also authorized under VA regulations to reapply prepayments to ...
RSS