The Mortgage Bankers Association called upon the FHA to update guidance regarding the assumption of FHA-insured loans and, separately, sought additional clarifications on many outstanding policies in the newly revised Single Family Policy Handbook. In a letter to FHA Commissioner Edward Golding, the MBA strongly urged the FHA to revisit and make changes to its loan-assumption policies and procedures, which have gone unchanged since the mid-1980s. With interest rates expected to rise over the next few years, the MBA anticipates the number of FHA loan-assumption requests to increase as well. Stale assumptions would make it virtually impossible for lenders to recover the actual costs incurred while processing them, warned Pete Mills, senior vice president for residential policy. Loan assumption enables a homebuyer to take on the obligations of the ...

The Mortgage Bankers Association urged lenders to review the Department of Housing and Urban Development’s new loan-level and lender-level certifications to assess the legal and reputation risks to FHA lending. In a statement, MBA President/CEO David Stevens further urged lenders to analyze whether the new certification language provides sufficient protection from unwarranted false claim enforcement action. The MBA statement came as the Department of Justice, commenting on the new certifications, warned that it will continue to pursue lenders that submit false statements and false claims with the intent to defraud taxpayers. The new loan-level certification language reinforces FHA’s position that lenders should not be penalized for minor mistakes on FHA loans. It requires lenders to certify “to what they know to be true to the best of their knowledge.” Lender-level certification, carved out of the initial loan-level certification, would require lenders to certify they have not ...

House Financial Services Committee Passes Flood Insurance Bill. The House Financial Services Committee recently voted to advance legislation that would provide a private flood insurance alternative to the federal National Flood Insurance Program for homeowners required to purchase flood insurance. H.R. 2901, the Flood Insurance Market Parity and Modernization Act, passed by a unanimous vote of 53-0 and was sent to the House floor for consideration. A Senate counterpart bill, S. 1679, which was reintroduced by Sen. Dean Heller, R-NV, last year, is awaiting action in the Committee of Banking, Housing and Urban Affairs. Both bills were introduced jointly in both the House and the Senate in 2015. Currently, due to uncertainty as to whether the coverage satisfies federal requirements, many lenders are reluctant to issue mortgages for homes with ...

The House Financial Services Committee recently voted to advance legislation that would provide a private flood insurance alternative to the federal National Flood Insurance Program for homeowners required to purchase flood insurance. H.R. 2901, the Flood Insurance Market Parity and Modernization Act, passed by a unanimous vote of 53-0 and was sent to the House floor for consideration. A Senate counterpart bill, S. 1679, which was reintroduced by Sen. Dean Heller, R-NV, last year, is awaiting action in the Senate Banking, Housing and Urban Affairs Committee. Both bills were introduced...

With only a few isolated exceptions, VA and FHA lending was up sharply across the country last year, outstripping the private mortgage insurance business in nearly every state of the U.S., according to a new analysis by Inside FHA/VA Lending. Overall, FHA single-family mortgages securitized by Ginnie Mae increased 60.5 percent from 2014 and VA production was up 39.4 percent. Meanwhile, Fannie Mae and Freddie Mac posted a more subdued 26.2 percent increase in privately-insured loan volume. California remained the biggest mortgage market for the FHA, VA and private MIs, as well as uninsured mortgages. The FHA clearly won the mortgage insurance battle, boosting its share of insured loans in the Golden State from 41.1 percent in 2014 to 49.2 percent last year thanks to a whopping 89.8 percent jump in business. California had one of the highest concentrations of ... [ 3 charts ]

Ginnie Mae securitization of rural home loans declined in 2015 as securitization volume in the segment fell in the fourth quarter, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. A total of $18.1 billion in USDA loans were securitized in 2015, with the top five issuers accounting for $10.2 billion delivered into Ginnie (based on numbers below) MBS pools. Some $4.5 billion of MBS backed by rural home loans with the U.S. Department of Agriculture guarantee were issued in the fourth quarter, down 12.5 percent from the previous quarter. USDA MBS issuance also dropped 9.0 percent in 2015 from 2014 volume levels, with all of the top five issuers losing ground year-over-year as well as in the fourth quarter. Chase Home Finance remained the top issuer of securitized rural home loans, accounting for $5.6 billion in Ginnie MBS issuances last year. Second-place Wells Fargo, ... [ 1 chart ]

Private mortgage insurers have announced changes in their premium rate structure to make their pricing more risk-based. The question is would this drive borrowers with lower credit scores toward FHA? Lenders say that while the private MI rate changes appear to make it more expensive for borrowers with lower credit scores to obtain a conventional mortgage, FHA’s life-of-loan policy could also cost borrowers more in the end. Analysts, too, are confident that private MI risk-adjusted pricing will not have any significant impact on FHA, positive or otherwise. Six private mortgage insurers have updated their premium rate cards in keeping with the new capital requirements under the government-sponsored enterprises’ Private Mortgage Insurer Eligibility Requirements (PMIERs) that were implemented in January 2016. The proposed rate changes are subject to ...

Radian Guaranty became the latest private mortgage insurer to announce proposed changes to its premium rate card as it followed the rest of the industry in moving more towards risk-based pricing. Radian’s announcement brings to six the number of private MIs that have updated rate cards to align with the new capital requirements under the government-sponsored enterprises’ Private Mortgage Insurer Eligibility Requirements (PMIERs) that were implemented in January 2016. United Guaranty has yet to make an announcement, and a spokesman declined to comment.Some MIs have opted for earlier effective dates for the new pricing, while others have decided on either April 4 or April 7, 2016, as their effective date.

The purchase-mortgage market took the biggest hit during the fourth-quarter slowdown in mortgage originations, but strength in first-time buyer activity helped soften the blow. According to a new Inside Mortgage Finance analysis and ranking, refi originations held steady at $175 billion during the fourth quarter. Although refinance activity in the second half of 2015 was down sharply from the first six months of the year, it was still significantly stronger than at any time in 2014 and year-to-date refi originations were up 60.0 percent in 2015. The purchase-mortgage market also grew...[Includes three data tables]

The FHA in 2015 posted significant shares overall among insured loans, except in purchase mortgages where private mortgage insurance enjoyed a slight edge over government-insured products, according to an Inside FHA/VA Lending analysis of agency loan-level mortgage-backed securities. The FHA accounted for the bulk of insured loans in mortgage-backed securities issued last year, writing coverage on an estimated $236.3 billion in mortgage originations, or 38.8 percent of all insured mortgage loans in 2015. Approximately $608.8 billion in securitized mortgages received...[Includes one data table]