Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

Mortgage lenders are more willing to expand the credit box for FHA borrowers, but they appear to be getting more cautious about FHA lending, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. Over two thirds of FHA loans securitized in the first nine months of 2015 had credit scores below 700, and 6.2 percent of them had scores of 620 or lower. By comparison, 47.0 percent of VA loans were below 700 and just 4.4 percent were in the lowest category. But FHA lenders became more cautious as the year wore on. In the first quarter, 6.8 percent of FHA loans had scores of 620 or lower. That fell to just 6.0 percent in the third quarter. The FHA purchase-mortgage sector skews even further away from the riskiest borrowers and toward safer ground. The share of FHA purchase loans with scores of 620 or lower fell from 5.8 percent in the first ... [ 2 charts ]

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...

The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...

The Department of Veterans Affairs has issued a policy clarifying how VA lenders should process and underwrite mortgage loan applications when borrowers assert they are married. The policy, which took effect immediately, requires lenders to accept a veteran’s assertion of spousal status when he or she is applying for VA home loan benefits. The policy came a few months after the U.S. Supreme Court held, in Obergefell v. Hodges, that the Fourteenth Amendment of the U.S. Constitution requires a state to issue a license for same-sex marriages and to recognize as valid and legal such marriages performed out of state. The SCOTUS decision opened the door for VA to recognize all same-sex marriages regardless of a veteran’s state of residence. The policy also directs VA personnel to apply the same level of scrutiny to all veteran marriages, regardless of whether they are ...

FHA to Unveil FY 2015 MMIF Audit Results. On Nov. 16, the FHA will release its 2015 annual report to Congress, a document that historically has included the results of the annual actuarial audit of the Mutual Mortgage Insurance Fund, or MMIF. Early in the day, Ed Golding, principal deputy assistant secretary for the Department of Housing and Urban Development’s Office of Housing, is scheduled to brief reporters on the report and take questions. As reported by Inside FHA/VA Lending, the reduction in the annual mortgage insurance premium earlier this year has put the MMIF on an accelerated path to recovery. But whether the ensuing increase in FHA production – which translates into additional premiums – will be enough to get the fund back to its statutory 2 percent capital reserve ratio remains ...

The FHA has issued temporary guidelines to ease the condominium approval process and increase the number of condo projects eligible for FHA financing. The guidelines take effect immediately and will be in place for one year to give FHA enough time to write and implement a more comprehensive rule. With the issuance of the guidelines, FHA anticipates an increase in the pool of FHA-eligible condo projects, which in turn will provide more affordable housing options for first-time and low- to moderate-income borrowers. The interim guidelines modify three key areas where lender complaints have been common. First, the guidelines revise requirements for recertification of condo projects. FHA-approved condo projects require recertification after two years to ensure that the project is still in ...

The private mortgage insurance industry did more business during the third quarter than it has in any period since the housing market came unglued in early 2008 and rolled to another solid round of financial results, according to an Inside Mortgage Finance ranking and analysis. But early indicators suggest the FHA and VA government insurance programs continue to provide stiff competition in the primary MI market. While neither government agency has released new business data for the third quarter, trends in the Ginnie Mae program suggest that the private MI share of new primary coverage drifted down to 33.8 percent in the third quarter, the lowest it’s been since the beginning of 2013. Mike Zimmerman, senior VP for investor relations at Mortgage Guaranty Insurance Corp., said...[Includes three data tables]

American International Group this week cleared the air regarding a potential spinoff of its profitable mortgage insurance division, saying it likes the MI business very much and considers it a “core” asset. In other words, it’s not for sale. Then again, during AIG’s third-quarter earnings call, President and CEO Peter Hancock left open the door to a possible sale of United Guaranty, saying that “over time” the company likes to maintain its flexibility and that if the “right offer to monetize assets” came along, it would ponder a bid. “It gives...

The overall delinquency rates for VA and FHA mortgage loans rose in the third quarter of 2015 due to increases in both 30-60 and 60-90 day delinquencies, according to agency data. Approximately 96.5 percent of VA loans in Ginnie Mae mortgage-backed securities remained current in the third quarter, down slightly from the second quarter, suggesting more borrowers have become past due during the period. VA 30-day and 60-day delinquencies rose to 2.44 percent and 0.23 percent, respectively, while the percentage of VA loans 90 days or more past due fell to 0.84 percent. The remaining principal balance of securitized VA loans was $426.8 billion, up 5.1 percent from the prior quarter. Meanwhile, the share of FHA loans in Ginnie Mae pools that were current dropped to 93.8 percent in the third quarter from 94.2 percent in the prior quarter. FHA 30-day delinquencies increased to ... [ 1 chart ]