Correspondent-originated mortgages were the only segment of the VA market that saw an increase in activity during the second quarter, according to a new analysis and ranking by Inside FHA/VA Lending. Overall, VA loan securitization declined by 1.8 percent from the first to the second quarter of this year. But delivery of correspondent-originated VA loans was up 4.9 percent, while both the retail and wholesale-broker channels saw declines. It was a slightly different picture in the FHA segment of the Ginnie Mae mortgage-backed securities market. Overall volume was up 9.8 percent from the first quarter, with all three channels posting gains. Brokers saw the biggest increase in FHA business, with volume up 14.5 percent, although the correspondent channel also posted a 12.7 percent increase and remained the most active of the three production venues. Loan characteristics held steady in both ... [Charts]

Industry groups representing lenders, real estate agents and insurance providers are urging the FHA to adopt a policy allowing borrowers to purchase private flood insurance on FHA-insured loans. In a recent letter, eight industry groups said FHA’s current stance of accepting only policies authorized by the National Flood Insurance Program contradicts Congress’ intent to encourage the use of private flood insurance and conflicts with current lender requirements. Congress is putting together a comprehensive legislative package of flood-insurance reforms, which would extend the NFIP for another five years and require lenders to accept private flood insurance to meet statutory flood-insurance requirements. The group said FHA’s current policy appears to conflict with lender requirements in the Biggert-Waters Flood Insurance Reform Act of 2012. A number of home-loan transactions have failed to ...

The private mortgage insurance industry urged the Consumer Financial Protection Bureau this week to consider including the qualified-mortgage standards of the FHA, VA and the U.S. Department of Agriculture in its assessment of the ability-to-repay/QM rule. In a comment letter, industry trade group U.S. Mortgage Insurers said it would be impossible to perform a full assessment of the ATR/QM rule without considering the different federal agency QM rules. If it does not expand the scope of its assessment, the CFPB should at least consider the impact the rules have on consumers in relation to the agency QM rules. In May, the CFPB notified stakeholders of its plan to evaluate the effectiveness of the ATR/QM rule in terms of its benefits and costs. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which established new standards for mortgage lending, including requiring lenders to assess consumers’ ability to repay. The statute also established a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement.

NewLeaf Wholesale has announced Property Assessed Clean Energy (PACE) guidelines for its FHA and VA mortgage products. PACE financing allows homeowners to retrofit their homes to make them more energy-efficient. The homeowner pays the loan as part of their property tax bill. In some states, PACE liens have superior status over all other liens, including a mortgage loan. A PACE assessment is a debt of property, where the obligation is tied to the property as opposed to the property owner. Hence, when the property is sold the new owner assumes the PACE lien. Last year, the FHA and VA issued guidance for approving purchase and refinance of mortgaged properties with PACE liens provided certain requirements are met. One requirement is that past due PACE loan amounts retain a first-lien position and this has raised some concern among industry groups that are opposed to ...

A property management contractor for the Department of Housing and Urban Development has agreed to pay $4.3 million to resolve allegations that it billed the agency for FHA-related work it did not perform in violation of the federal False Claims Act. Cityside Management Corp. of Manchester, NH, allegedly failed to inspect the work of third-party vendors that it hired to perform termite inspections, treatments and repairs on repossessed houses in HUD’s real estate-owned inventory, as required by its contract with HUD. HUD’s inspector general investigated the case and referred it to the Department of Justice. Following the financial crisis, HUD held title to a large number of foreclosed homes acquired by borrowers with FHA financing. HUD contracted with various field service managers, including Cityside, to prepare the REO properties for resale. According to the Office of the U.S. Attorney for the ...

The Senate Committee on Appropriations last week unanimously approved legislation setting aside $40.2 billion in discretionary funding for the Department of Housing and Urban Development for fiscal 2018. The Senate HUD appropriations bill passed by a vote of 31-0 and, like the House version, did not include authority for HUD to charge a fee to cover FHA’s administrative costs and systems upgrades as proposed in the Trump administration’s budget request. Rather, both bills set aside $130 million for administrative expenses with the House adding another $5 million for technological improvements. In addition, the committee recommended...

House Democrats are trying to persuade Housing and Urban Development Secretary Ben Carson to reinstate a 25-basis-point FHA mortgage insurance premium cut scheduled under the Obama administration, citing continuing improvement of the FHA Mutual Mortgage Insurance Fund. In a letter to Carson last week, 21 Democrats led by Rep. Joyce Beatty, OH, called upon the secretary to place homeownership within the reach of families, especially millennials and minorities, by lowering the FHA annual MIP rates to the same level that was announced during the waning days of the Obama administration. On Jan. 9, 2017, encouraged by the strong recovery of the MMI Fund, former HUD Secretary Julian Castro announced...

The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...

The U.S. Department of Agriculture’s Rural Housing Service has clarified procedures for reevaluating approved lenders’ and servicers’ eligibility under the RHS Single Family Housing Guaranteed Loan Program. The guidance also provides procedures for updating lender information. The RHS intends to review and document lender eligibility in accordance with regulation and program requirements to protect government assets and minimize taxpayer losses. Office of Management and Budget regulations require federal agencies to reevaluate and record lender and servicer eligibility every two years. “For the [USDA single family loan guarantee program], it requires making sure that lenders and servicers participating in federal credit programs meet all applicable financial and program requirements,” wrote Richard Davis, acting RHS administrator. To meet the requirements, lenders must ...

The Department of Veterans Affairs is ratcheting up enforcement of its so-called Tidewater process to prevent veterans from paying more than the appraised value of the property when using a VA loan. In recent guidance, the VA reaffirmed its 2003 Tidewater Appraisal Initiative to help reduce the number of cases where appraisers have been asked to reconsider their initial appraisal, which had come in below the sales price. The guidance emphasizes procedures for improving communication of new sales data to VA fee and staff appraisers for a reevaluation of the low initial appraisal. “These guidelines should help limit the number of cases that reach the reconsideration-of-value phase and also provide a more timely response to those cases that are submitted for reconsideration,” the VA explained. The Tidewater procedure provides a designated “point of contact” (POC) the opportunity to ...