FHA lenders now face more stringent default monitoring and reporting requirements as federal housing regulators try to keep close tabs on loan performance to reduce losses to the FHA insurance fund. New guidance issued by the Department of Housing and Urban Development requires FHA lenders to use new status codes in their monthly reporting of delinquent single-family mortgages, special forbearances and trial payment plans. At the same time, HUD announced a new reporting requirement for FHA loan modifications in which the servicer receives no incentives. The requirement to use the new codes and to ...

FHA jumbo loan originations increased in the first quarter of 2013 as well as from the same period last year pending hikes in the mortgage insurance premium and the required downpayment on loans above $625,500, according to Inside FHA Lending’s analysis of FHA data. FHA jumbo lenders produced an estimated $5.44 billion in loans over $417,000 during the first three months of the year, up 6.6 percent from the fourth quarter of 2012 and 14.0 percent higher compared to the volume from a year ago. Consumers continued to use the FHA jumbo product despite FHA’s decision to raise the annual mortgage insurance premiums on ... [2 charts]

FHA loans saw an improvement in delinquencies even as the mortgage industry reported an increase in the overall delinquency rate for single-family mortgages at the end of the first quarter of 2013, according to the Mortgage Bankers Association’s latest national delinquency survey. Among loan types, the FHA saw the largest improvement on a seasonally adjusted basis as its delinquency rate dropped to 10.97 percent in the first quarter, down 20 basis points from the previous quarter. This was good news for an agency that has been battling to reduce losses and stabilize its Mutual Mortgage Insurance Fund. However, the refreshing change was ...

After some rough sailing, the FHA could use a bit of good news. In a recent audit, the Department of Housing and Urban Development’s Office of the Inspector General found that funds held by lenders have adequately reduced FHA’s payments of single-family mortgage insurance claims. Such funds include buydown funds remaining in escrow, unapplied assistance payments, rental income, escrow funds and others. The audit focused on the FHA’s Single Family Claims Branch and was performed in response to concerns that HUD may not have the ...

The Department of Housing and Urban Development’s Office of the Inspector General has announced a second round of mortgage note sales for this year under the expanded Distressed Asset Stabilization Program. Separate sales of approximately 20,000 severely delinquent loans have been scheduled for June 26 and July 10 as part of HUD’s effort to reduce its bulging inventory of foreclosed residential properties and to target relief to areas hit the hardest by foreclosures. HUD estimates the total unpaid balance of the loans in this sale at ...

Regulation by Mortgagee Letter. The Department of Housing and Urban Development this week urged House lawmakers to grant it statutory authority to make temporary changes to the Home Equity Conversion Mortgage program through mortgagee letters while working to formalize the change through rulemaking. In a hearing before the House Financial Services Subcommittee on Housing and Insurance this week, Charles Coulter, HUD deputy assistant secretary for single-family housing, sought specific authority to limit the amount that may be drawn from ...

AIG and its mortgage insurance subsidiary United Guaranty Corp. are combining their investment expertise and knowledge of the mortgage market to purchase residential whole loan mortgages as investments. The initiative is in a pilot phase and limited in scope, according to UGC executives. Closed loans will be purchased individually from correspondent lenders and held in portfolio. There are no plans for direct lending or securitization, executives added. Loans targeted for purchase will be subject to ...

Private mortgage insurers lost a little collective market share to the FHA and VA during the first quarter, although that may have been simply a timing distortion, according to a new market analysis and ranking by Inside Mortgage Finance. The more groundbreaking news is that the surviving private MIs, as a group, probably turned a profit during the first quarter of 2013. The four publicly traded companies reported a combined loss on their domestic MI business of just $14.6 million during the first quarter of 2013. Essent Guaranty, the fifth-largest MI in terms of new business, is...

Most mortgage industry observers expect the Federal Housing Finance Agency to raise Fannie Mae and Freddie Mac guaranty fees by about 20 basis points this year, but many are convinced that the impact on market practices may be bigger than the magnetic effect on private capital. The FHFA has said it wants to raise g-fees to the point that private capital comes into the market, according to Paul Mullins, a senior vice president and interim head of single-family at Freddie Mac. During remarks at the secondary market conference sponsored by the Mortgage Bankers Association this week, he said “The odds are reasonably good you will see higher guaranty fees.” Already around 50 bps and twice their historic level, the fees charged...

The mortgage industry has a window of opportunity to improve the secondary market without having to wait years for Congress to deal with Fannie Mae and Freddie Mac, according to the leadership of the Mortgage Bankers Association, which this week announced a three-prong agenda that doesn’t depend on new legislation. The conservatorships of the two government-sponsored enterprises, which will be five years old in October, were intended to be a short “time out,” and there is still no endgame in sight or any plan for transition, said MBA President and CEO David Stevens, during the group’s secondary market conference in New York this week. Stevens outlined...