The FHA has issued guidance to clarify new servicing requirements in the Home Equity Conversion Mortgage final rule that will take effect on Sept. 17, 2017. The HECM final rule codifies previously issued policies as well as new policies contained in the HECM proposed rule published on May 19, 2016. The guidance provides more detail on three servicing policies contained in the HECM final rule that HUD published in the Federal Register on Jan. 19. These policy areas include default for unpaid property charges, sale of property securing a due and payable HECM, and cash-for-keys and relocation incentives. The comment period ends on Sept. 24. Specifically, the guidance clarifies when a lender must submit a due-and-payable request if a borrower is unable or unwilling to repay funds advanced by the lender to pay property charges. In addition, the guidance updates the ...

The FHA this week extended temporary rules for approving condominium projects for FHA financing indefinitely. The extension will remain in place until the condominium rulemaking process is completed, the agency said in a mortgagee letter. Temporary approval requirements were first issued in 2012 and later modified in 2015. The current temporary provisions expired on Aug. 31, 2017. Under a proposed rule issued for comment on Sept. 27, 2016, elderly condominium owners would find it easier to obtain a Home Equity Conversion Mortgage. FHA proposes to reinstate “spot condo” approvals whereby individual units are approved by FHA rather than the entire condominium project as required under current rules. Spot-condo approvals would require property recertification every three years rather than the current two-year requirements. Processing recertifications would be streamlined under the ...

As Hurricane Harvey’s floodwaters recede, federal agencies that provide guarantees on mortgages are faced with the daunting task of identifying and assisting borrowers with government-backed mortgages in disaster-stricken areas of Texas. FHA, VA, the U.S. Department of Agriculture’s Rural Housing Service and Ginnie Mae have issued special relief guidance for approved lenders following Hurricane Harvey. The FHA has issued guidance to remind lenders and servicers that FHA-insured mortgages secured by properties in a presidentially-declared major disaster area are subject to a 90-day moratorium on foreclosures following a natural disaster. FHA also provides lenders an automatic 90-day extension upon expiration of the moratorium to begin or re-start foreclosure action or evaluate the borrower’s need for loss mitigation. In addition, FHA urged servicers to brush up on the 203(h) and the ...

The FHA has posted a quick-reference sheet on its website to help lenders navigate the agency’s new Loan Review System. The quick-reference sheet summarizes the most important information in the LRS user manual. The LRS is an electronic platform for single-family, quality-control processes that includes post-endorsement loan reviews, direct endorsement authority test cases, lender-monitoring reviews, and lender-self-reporting of fraud and other material findings. Defect taxonomy, a key LRS component, provides a streamlined method of identifying and capturing information about loan defects uncovered through individual loan reviews. Lenders have four opportunities to respond to FHA reviews. They may access the LRS to view the results of the review in detail but they may not edit or submit responses, upload documents, manage binder requests or create self-reports. When FHA requests a ...

The political calendar in Ohio may compel CFPB Director Richard Cordray to resign shortly – perhaps even this week – so that he can announce his candidacy for governor at the Sept. 4 Cincinnati AFL-CIO Labor Day picnic. According to CFPB watcher Alan Kaplinsky, a practice leader in the Philadelphia office of the Ballard Spahr law firm, Cordray is scheduled to deliver remarks at the event. “Assuming the speculation that Director Cordray plans to run for Ohio governor is accurate, that event seemed to be an ideal venue for him to announce his candidacy,” the attorney said in a recent blog post. The thing is, Cordray would have to resign from the bureau before declaring, according to Kaplinsky. That bolsters the argument ...

Relatively stable pricing and fairly healthy returns are giving mortgage reinsurers hope for a more robust market, according to a new analysis from Standard & Poor’s. Reinsurers seeking respite from a deteriorating property casualty reinsurance sector have found mortgage reinsurance a promising business diversification and source of growth – at least for now, said the rating service. However, reinsurers coming late to the feast might find...

The Home Affordable Refinance Program was arguably one of the most successful initiatives aimed at delivering consumer relief in the wake of the housing meltdown. It’s proving hard to kill. The Federal Housing Finance Agency this week extended HARP for another year, until the end of 2018. It was slated to sunset at the end of this year. The program has been extended several times since it was authorized back in 2009. The extra year is...

Simplifying and aligning the default servicing policies of the conventional conforming and the government-backed mortgage markets would better serve the mortgage industry and homeowners, according to industry experts. In a recent discussion on how regulatory burden and high servicing costs might impede lending, members of the Mortgage Servicing Collaborative agreed on the need for streamlined and harmonized federal, state and agency policies and rules on servicing. Increased regulatory requirements have caused mortgage-servicing costs to skyrocket in recent years, experts said. Even though the quality of servicing has improved, the new regulations are complex and costly, they noted. Multiple pressures placed upon servicers have suppressed mortgage lending, making it harder for borrowers with tainted credit to obtain a mortgage, according to the ...

FHA production increased slightly even as VA originations fell by a larger percentage in the second quarter of 2017, an analysis of the agencies’ lending activities found. FHA ended the quarter with $60.8 billion in forward mortgage endorsements, up 1.8 percent from the previous quarter. In contrast, VA originations declined by 4.9 percent over the same period, closing the second quarter with $40.8 billion. FHA and VA production typically gain share when the purchase-mortgage lending increases. For example, Inside Mortgage Finance reported that purchase mortgages comprised 71.3 percent of loans securitized in Ginnie Mae mortgage-backed securities in 2Q17, compared to 59.9 percent in Fannie Mae and Freddie Mac MBS. FHA endorsements over the first half of 2017 totaled $120.6 billion, of which $86.0 billion were purchase loans. This was up 4.8 percent from the same six-month period ... [Charts]

Reverse mortgage lenders are asking FHA to clarify the applicability of state statutes of limitations on collections and foreclosures involving Home Equity Conversion Mortgage loans. In a comment letter to the Department of Housing and Urban Development, the National Reverse Mortgage Lenders Association sought clarification to avoid any potential risk to the department and reverse mortgage lenders. Since federal agencies are not subject to state statutes of limitations, the NRMLA asked the FHA to confirm that HECM loans assigned to HUD are not covered by state statutes of limitations on collections and foreclosure. The trade group also requested FHA to clarify whether HECM regulations and program guidelines preempt any such state law. “Requiring mortgagees to assign loans to HUD and make certifications that such loans are and will be ...