House lawmakers this week overwhelmingly approved legislation that would essentially codify some of the measures already adopted by the Department of Housing and Urban Development to help strengthen the FHA Mutual Mortgage Insurance Fund as well as improve risk management and tighten oversight of FHA lenders and third-party originators. The long-awaited bill, the FHA Emergency Fiscal Solvency Act of 2012, passed by a vote of 402-7, nearly six months after it was voted out of the House Committee on Financial Services. Rep. Judy Biggert, R-IL, who chairs the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, introduced the bill after her subcommittee approved an initial draft in early February. The MMI Fund has been below minimum capital reserve levels and is not projected...

The Department of Housing and Urban Development appears to have lost a round in its fight to bring an alleged FHA defrauder to justice. HUD suffered a setback recently after U.S. District Judge Gray Miller in Houston granted declaratory relief to Allied Home Mortgage Corp. (AHMC) to challenge HUD’s suspension of the lender’s authority to originate and underwrite FHA-insured loans. The Houston-based lender contends that HUD acted capriciously and arbitrarily without due process of law. It based these claims on ...

The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

Industry trade groups last week gave the Department of Housing and Urban Development another nudge to lift the moratorium on investor participation in the FHA 203(k) property rehabilitation program. Following up on an industry request in June, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders in a joint letter to HUD reiterated the importance of the 203(k) program in reducing the current real estate-owned (REO) inventory and addressing the oversupply of housing. The groups said the program ...

The Department of Housing and Urban Development has issued new rules for qualifying borrowers who list Social Security income on their application for an FHA-insured mortgage loan.The number of FHA borrowers with verified Social Security income is unknown because HUD does not track borrowers’ source of income, according to a department spokesperson. But industry observers said the number may not be significant. Nonetheless, lenders would need to request several important documents from borrowers who would rely on SS income to qualify for an FHA home loan, the new rules state. These documents include ...

As some aggregators scale back or add overlays to their FHA Streamline Refinance mortgage loans, First Mortgage Corp. stands out because of its confident approach to the product. While other lenders impose overlays or charge more for the additional risk, FMC, an FHA-approved direct lender in Ontario, CA, imposes no restrictions on streamline refinancing other than those required by FHA guidelines. “First Mortgage prides itself in serving historically underserved borrowers and so we have a commitment to underwrite loans to FHA guidelines for the most part,” said FMC spokesperson Sharon Magnuson. The FHA streamline refi program allows certain borrowers ...

FHA jumbo activity kicked into high gear in the second quarter of 2012 as originations jumped more than 30 percent from the first quarter, Inside FHA Lending’s analysis of FHA data showed. The volume of FHA loans exceeding $417,000 totaled $6.33 billion in the second quarter, up from $4.78 billion during the first quarter. FHA jumbo production was robust during the first half of the year as the top lenders reported $11.1 billion in total originations, which was 9.1 percent more compared to the same period a year ago. Purchase jumbo loans accounted for ...

VA Flunks ‘Plain Writing’ Test. The Department of Veterans Affairs got an “F” for not following the requirements of the Plain Writing Act, which directs federal agencies to take steps to ensure they are communicating clearly with businesses, consumers and stakeholders. The statute went into effect July 2011 and the Center for Plain Language, a nonprofit organization that grades government agencies on their efforts to comply with the Act, evaluated and graded 12 agencies for compliance. The center gave two grades – the first grade represents how well the agency followed the requirements of the act, and the second grade reflects ...

Freddie Mac’s government conservator is stepping up to shut down a potentially costly lawsuit filed against the GSE by the Mortgage Guaranty Insurance Corp. both by legal and by extra-legal means. Last month, the Federal Housing Finance Agency told a Wisconsin federal court that it lacks jurisdiction over the pool insurance suit the mortgage insurer filed against Freddie. Given that the suit would impede FHFA in its capacity as the GSE’s conservator, the court should dismiss MGIC’s suit, according to court papers filed by the Finance Agency on July 20.

The mortgage credit-enhancement business has been no place to be the past few years, but many observers think the market has touched bottom and is starting to come back. After hemorrhaging losses since 2008, the two biggest mortgage credit-enhancement providers – Fannie Mae and Freddie Mac – reported positive net income on their single-family guaranty businesses during the second quarter. The private mortgage insurance industry hasn’t gotten there yet. Fannie and Freddie reported...[Includes two data charts]