Quicken Loans said it will be evaluating whether it should continue participating in the FHA single-family mortgage insurance program after the federal government formally accused the lender of improperly originating and underwriting mortgages that cost the FHA losses in paid claims. The Detroit-based mortgage lender two weeks ago took the unprecedented step of filing a lawsuit against the government for alleged harassment in what it deemed a long-running fishing trip to drum up charges against the company. Last week, the empire struck back. The Department of Justice filed...

The Federal Housing Finance Agency announced new changes to private mortgage insurer eligibility rules on April 17 and the GSEs said the revisions will play a role in helping to reduce the risk to taxpayers by making sure the MIs are financially and operationally strong. During the financial crisis, some MIs couldn’t fully pay their claims, resulting in losses to the GSEs and taxpayers. The FHFA hopes the revised requirements will help lessen the chances of falling back into the same boat should there be another crisis. United Guaranty, the highest-rated GSE-approved mortgage insurer, said PMIER revisions are “a critical and necessary step that will allow the entire mortgage insurance industry to move forward by incorporating lessons learned during the financial crisis.”

In an ongoing attempt to offer lenders more clarity and reduce buybacks, Fannie Mae has taken its new Collateral Underwriter program to the next phase and integrated it with other loan-processing systems.After introducing Collateral Underwriter in January, Fannie announced on April 20 that it incorporated the tool with Desktop Underwriter, an automated underwriting system, and Early Check, the company’s pre-delivery loan eligibility and data evaluation tool. The GSE said this will provide a better view of risk on a loan across multiple applications, allowing lenders to address potential issues prior to loan delivery. CU, Fannie’s proprietary appraisal analysis application that gives lenders access to analytics, public records and other data when...

The Federal Housing Finance Agency late last week announced a few changes to new private mortgage insurer eligibility rules that were first proposed in July 2014, and the private MI industry appears mostly ready for them. “The new PMIERs are really designed to promote the counterparty strength of private mortgage insurers. We feel like this will strengthen the industry,” said Gina Haly, Freddie Mac’s vice president in the mortgage insurance and risk transfer counterparty credit division. During the financial crisis, some MIs couldn’t fully pay...

With private mortgage insurance eligibility requirements now a done deal, the MI industry may have a new headache on its hands: concerns from Fannie Mae and Freddie Mac – and their regulator – about the discounting of lender-paid MI policies. Industry officials familiar with the LPMI issue have been telling Inside Mortgage Finance for weeks that the government-sponsored enterprises are taking a close look at the product. Although the Federal Housing Finance Agency declined to discuss LPMI, a spokesman for Freddie Mac offered...

Fannie Mae and Freddie Mac securitized $43.28 billion of single-family loans covered by private mortgage insurance during the first quarter of 2015, according to a new Inside Mortgage Finance analysis and ranking. First-quarter PMI business was down 7.7 percent from the fourth quarter of 2014, although overall mortgage-backed securities issuance by the two government-sponsored enterprises was up 5.9 percent over the same period. All of the increase ... [Includes two data charts]

The Department of Housing and Urban Development’s Office of the Inspector General has finalized settlements with two direct endorsement lenders to resolve allegations of violating FHA underwriting requirements. Golden First Mortgage Corp. and Group One Mortgage agreed to pay a total of $36.41 million to the federal government in reparation for losses incurred by the FHA on the defaulted loans. Based in Great Neck, NY, Golden First, a privately held company, and its owner/president, David Movtady, allegedly falsely certified to FHA and HUD that the loans the company endorsed for insurance met all FHA requirements. This went on from 2002 through 2010, the OIG alleged. The OIG accused the company and Movtady of violating the False Claims Act, which prohibits acts to defraud the federal government and which has been instrumental in ...

Beginning June 27, the FHA will require electronic appraisals for single-family forward and reverse mortgages to be delivered through an online electronic submission portal prior to endorsement. The Electronic Appraisal Delivery (EAD) portal is a web-based platform that would allow paperless submissions of single-family home loan appraisals, cutting down loan processing time significantly. FHA lenders and their authorized representatives can access the EAD portal by using electronic credentials and showing they are ready to use the new technology. Only appraisals that are compliant with FHA appraisal and data delivery guidelines can be uploaded to the portal. Lenders will be notified of a successful upload or if they need to correct and resubmit an appraisal. Once an appraisal is successfully submitted to the portal, FHA Connection will pull EAD appraisal data and pre-fill certain data fields in the ...

The percentage of FHA borrowers refinancing their mortgage into another government loan has fallen through the floor the past two years, with all indications pointing to a rule change that prevents mortgage insurance from being cancelled over the life of the loan. Of course, increases in premiums haven’t helped either, but thanks to a January reduction in the annual FHA premium of 50 basis points, at least some of that business is coming back to the agency. “The life-of-the-loan issue is...

Most analysts are confident that private mortgage insurance companies will not see their ratings downgraded due to increased competition from the FHA as well as new capital requirements for private MIs proposed by the Federal Housing Finance Agency. But Zacks Investment Research, a research firm that ranks and rates investment products for investors, went against the grain and downgraded MGIC Investment Corp. by two notches due exactly to those reasons. While private MIs have been gaining market share in the last couple of years, Mortgage Guaranty Insurance Corp. and its business competitors will find...