The Department of Veterans Affairs expects to issue a final rule establishing ability-to-repay (ATR) standards and defining a “qualified mortgage” in October, according to the agency’s regulatory agenda for the second half of 2015. Proposed in May 2014, the rule would implement provisions of the Dodd-Frank Act, which, among other things, would require the VA to define the types of loans that are QMs under the new ATR provisions of the Truth in Lending Act. VA loans that are designated as QM would have either safe-harbor protections or the presumption that the borrower is able to repay the mortgage loan, in accordance with the new ATR provisions. The final rule would not change VA’s regulations or policies regarding mortgage originations, except when lenders want to originate QMs, the VA said. A VA spokesman clarified that action dates on any particular rulemaking are not ...
The FHA is planning to propose a number of rules for the single-family mortgage insurance program through the second half of 2015 and is expecting to act soon on a long-anticipated rule on seller concessions. In its semiannual regulatory agenda, the FHA appears poised to take final action this month on a five-year-old proposed rule seeking to lower FHA seller concessions or contributions toward a buyer’s closing cost. The proposed rule is one of three FHA initiatives to help restore the FHA’s Mutual Mortgage Insurance Fund, which was severely depleted during the housing crisis. Similar to what was proposed in the President’s FY 2012 budget, the proposed rule would limit concessions to 3 percent or $6,000, whichever is greater. The proposal would limit acceptable use of concessions to borrower closing costs, prepaid items, discount points, FHA upfront insurance premium and ...
Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]
The National Reverse Mortgage Lenders Association is seeking guidance from the Consumer Financial Protection Bureau on how to design reverse mortgage advertisements without triggering regulatory scrutiny. Peter Bell, NRMLA president and chief executive, said he had sent a Freedom of Information Act request seeking access to the particular ads that the CFPB sought comment on in a recent study on reverse mortgage advertisements. The study found that consumers who viewed the ads were left with misimpressions about reverse mortgages. For example, consumers were confused about reverse mortgages being loans. Some thought that home-equity conversion mortgages are a “government benefit” or that they could ensure that homeowners could stay in their homes for the rest of their lives. Others complained of difficulty reading the fine print and that ...
The FHA plans to issue a proposed rule in the fall that would allow it to insure single-family condominium units in multifamily projects, according to the agency’s regulatory agenda for the second half of 2015. The proposed rule would cover condo units that are attached, detached, semi-detached or manufactured. It would apply as well to undivided interests in the common areas and facilities that serve the project. The proposed change would clarify and ensure lender compliance with the Housing and Economic Recovery Act of 2008. HERA moved FHA’s authority to insure single-family condominiums from Section 234 to Section 203 of the National Housing Act. However, because Section 203 does not provide the same authority for FHA, rulemaking became necessary. HERA also granted FHA the authority to issue administrative notices to convey condominium policy guidance until a ...
Deadline Extended for Submission of Due-and-Payable Request. On April 23, the FHA issued guidance to reverse-mortgage servicers on the types of loss mitigation options they may provide when a Home Equity Conversion Mortgage loan goes into default. If the default occurred before April 23, 2015, the guidance’s publication date, servicers have 180 days to submit a due-and-payable request if the borrower is unable to pay property charges and goes into default. Under the revised guidance, FHA is allowing a one-time extension through Oct. 20, 2015, for lender-servicers to submit the due-and-payable request. The FHA said the extension would ensure that the April 23 guidance is successfully implemented. Lenders Get First Look at FHAC Improvements. The FHA is providing an overview of the FHA Connection (FHAC) system enhancements to help lenders get ready before the ...
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