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]

There will be no further reductions of the FHA annual mortgage insurance premium or any change in the agency’s life-of-loan pricing, according to the Department of Housing and Urban Development’s top officials.Testifying recently before a House Financial Services subcommittee, FHA Commissioner Edward Golding attributed a 27 percent increase in FHA purchase endorsements last year to a 50 basis point MIP reduction and continued low interest rates. Although he did not provide any updated guidance on MIP adjustments, Golding assured...

Morningstar Credit Ratings changed the way it rates residential MBS to allow credit for mortgage insurance. After getting a number of inquiries about the use of mortgage insurance in new MBS, the firm said it decided to enhance its methodology to provide a clearer framework for how the ratings agency approaches mortgage insurance. While mortgage insurance does not necessarily affect a borrower’s probability of default, it may decrease loss severities, according to Morningstar. “Our methodology now gives credit to mortgage insurance in some cases up to the AAA ratings level,” said Brian Grow, managing director of RMBS for Morningstar. “MI’s potential impact on default is...

The FHA insured more loans that were packaged in agency mortgage-backed securities last year than any of its rivals in the primary mortgage-insurance business, but private mortgage companies came out on top in the purchase-mortgage sector. FHA loans accounted for 38.8 percent of insured mortgages securitized by Fannie Mae, Freddie Mac and Ginnie Mae last year, according to a new Inside Mortgage Trends analysis of MBS loan-level data ... [Includes one data chart]

Private mortgage insurers saw spirited competition in 2015, both within their own ranks and against a surge in government-insured products, especially the FHA program, according to a new market analysis and ranking by Inside Mortgage Finance. Private MIs wrote coverage on an estimated $219.64 billion in mortgage originations last year, a 23.2 percent increase from 2014. The estimate includes $315 million in coverage on Home Affordable Refinance Program loans provided by the three MIs in run-off mode. The private MI business surge included...[Includes three data tables]

Top officials of the Department of Housing and Urban Development have explicitly ruled out lower FHA premiums or making other significant changes in the program any time soon. Testifying before a House Financial Services subcommittee late last week, FHA Commissioner Edward Golding did not provide any updated guidance on mortgage insurance premiums but made clear there are no plans to revise FHA’s current life-of-loan policy. Under the existing FHA policy, borrowers are required...

Panelists speaking at a seminar on Fannie Mae and Freddie Mac credit-risk transfers this week agreed that the program, while successful, could use some fine-tuning such as creating a deeper mortgage-insurance version and broader participation by real estate investment trusts. While REITS are active in credit risk transfers, their participation is small when compared to their role in non-agency MBS, said experts at the seminar sponsored by the Urban Institute and CoreLogic. Bill Roth, chief investment officer of Two Harbors, noted that REITs have purchased or retained the subordinate tranches in at least 60 percent of the non-agency MBS issued over the past three years, but just 2 percent of CRT deals issued by the government-sponsored enterprises as of July 2015. “REITs would love...

Fannie Mae and Freddie Mac last year securitized just $14.40 billion of refinance mortgages with high loan-to-value ratios and no private mortgage insurance coverage, according to a new analysis by Inside MBS & ABS. That was down 51.7 percent from the total for 2014 and amounted to a drop in the bucket compared to the high-water mark for the Home Affordable Refinance Program back in 2012. The sharpest downturn was...[Includes two data tables]

The FHA Mutual Mortgage Insurance Fund is projected to generate $9.1 billion in profits in FY 2017 but officials say they will not be reducing mortgage insurance premiums any time soon. Released this week, the White House’s proposed budget projects FHA will insure $204 billion in new forward, single-family mortgages with a negative credit subsidy of 4.42 percent for each loan, resulting in a projected profit of $9.1 billion. In fiscal 2016, the program is expected to generate $7.7 billion in profits. Separately, for the Home Equity Conversion Mortgage program, the proposed budget is projecting $18.5 billion in new reverse mortgage loans with a negative credit rate of 0.33 percent, netting $61 million in profits. During a budget briefing, Housing and Urban Development Secretary Julian Castro said there are no plans to change the current mortgage insurance premium. “We want to ensure our ...

On Jan. 20, the Department of Veterans Affairs published a Frequently-Asked-Questions (FAQ) guide to its qualified mortgage interim final Rule. We are picking up from where we left off last issue: Will VA still guaranty the loan if the Interest rate Reduction Refinance Loan (IRRRL) does not meet the recoupment period of less than 36 months, or does not meet the six-month seasoning requirements? Yes, VA will guaranty the loan. However, the loan will not have a safe harbor QM status. Instead, it will be a rebuttable presumption QM. VA does not condition the guaranty on satisfaction of all of the QM requirements. Lenders should consult their legal staff regarding safe harbor and rebuttal presumption QMs. What is the date that begins the seasoning and recoupment periods? The date of the note is the date on which legal obligations are established between borrower and lender. Therefore, to calculate the ...