American International Group is working to “rebalance its exposure to residential mortgages” after the company’s sale of United Guaranty, a private mortgage insurer. Douglas Dachille, an executive vice president and CIO at AIG, detailed a number of plans late last week in a presentation to investors. He said the insurance giant is structuring direct investments in residential and commercial mortgages and other whole loans. “The team is...

A strong purchase market helped push FHA and VA originations in the third quarter of 2016, according to an Inside FHA/VA Lending analysis of agency data. FHA forward originations increased by 17.4 percent from the second quarter for a total of $72.3 billion. That brought total FHA-insured loans originated over the first nine months to $187.3 billion, up 3.9 percent from the same period last year. Purchase mortgages comprised 70.0 percent of FHA’s total origination over the last three quarters. Quicken Loans reported only a 3.3 percent increase in FHA originations in the third quarter but still managed to retain its top ranking with $10.8 billion in FHA originations in the first nine months of 2016. Freedom Mortgage worked extra hard, ending the nine-month period with $5.0 billion on the strength of refinances. Third-quarter originations were up 69.6 percent from the prior quarter, and up 51.4 percent for the ... [3 charts]

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...

State housing finance agencies’ downpayment assistance poses minimal risk to the FHA, and the scope of the problem is nowhere near the size suggested by the Department of Housing and Urban Development’s inspector general, according to a new study by the Urban Institute. The study’s conclusion would appear to bolster HUD’s defense of permissible downpayment assistance in a disagreement with the agency’s inspector general. The dispute arose from an IG audit of NOVA Financial & Investment Corp., an originator of FHA-insured mortgages with downpayment assistance provided by state housing finance agencies (HFAs). In a July 2015 report on NOVA’s audit, the IG alleged that some HFAs were allowing downpayment assistance that was being paid for through higher mortgage rates, in violation of FHA requirements for downpayment assistance. It also put FHA’s mortgage insurance fund at ...

VA lenders must now submit their condominium approval requests electronically to the VA Home Loan Program to enable the agency to lower condo-approval costs and speed up the process. The process of shifting from paper to electronic submission of VA condo-approval documents began on Nov. 3. Lenders and other program participants are required to upload their condo association documents into WebLGY in PDF format. A condo record must exist in WebLGY in order to upload the required paperwork. Directions on how to search condo records and create a new record may be found in the Quick Reference Document. Users can access the site via a link in Section 6 of VA Circular 26-16-35. When creating a new record, documents within the file or that uploaded individually must be stacked and labeled in the ...

FHA and VA loan performance improved in the third quarter of 2016 as the delinquency rate on government-backed loans declined on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest mortgage delinquency survey. The FHA delinquency rate fell by 16 basis points to 8.30 percent, its lowest level since 4Q97, with all categories – 30-days, 60-days and 90 days + past due – reflecting the decline. Over the quarter, the delinquency rate of FHA loans with payments 30 days past due dropped 4 bps from the previous quarter. Insured loans that were 60 days behind on their payments saw a 6 bps drop in their delinquency rate, while that for seriously delinquent loans fell 9 bps during the period. FHA mortgages showed some declines in performance on a non-seasonally adjusted basis. Approximately 8.70 percent of outstanding FHA loans were past due as of the end of the third quarter, up 25 bps from the ...

Industry Groups Urge Congressional Leaders to Pass ‘Tax Extenders’ Legislation. Three industry groups called upon House and Senate leaders to pass “tax extenders” legislation, including two critical tax provisions that are scheduled to expire at the end of 2016. In a joint letter this week, the Mortgage Bankers Association, National Association of Realtors and the National Association of Home Builders called for the “rapid enactment” of a broad “tax extenders” package, including mortgage-debt forgiveness and tax deduction for mortgage insurance premiums. Passing a legislative package of tax extenders that includes the two provisions would provide much-needed certainty to the residential real estate markets, the letter said. Federal Agencies Propose Rule to Expand Access to Private Flood Insurance. Federal banking and credit union regulators and the Farm Credit Administration have published a ...

The FHA Mutual Mortgage Insurance Fund may be healthy enough to support a cut in forward-mortgage premiums, but officials at the Department of Housing and Urban Development aren’t yet willing to pull the trigger. HUD this week released its annual FHA audit showing strong improvement in the MMI Fund from the forward-mortgage side of the ledger. During a press briefing, Edward Golding, principal deputy assistant secretary for housing, said the strong audit results “do indicate there is room to return pricing to that which reflects the risks in the program.” He noted that the $245 billion in new FHA business in fiscal 2016 clearly added to the strength of the MMI Fund, “with indications we’re pricing above the risk of the program.” At the same time, Golding made...

The primary mortgage insurance market remained on track for its best year ever during the third quarter of 2016, as the government-insured sectors gained some ground on private MIs, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders originated a record $220.46 billion of home loans with some form of primary MI during the third quarter, a 16.6 percent increase from the previous period. That brought year-to-date primary MI activity to $553.77 billion, just $92.40 billion less than the all-time annual record of $646.17 billion set in 2015. The government-insured market – mostly FHA and VA – was...[Includes three data tables]