The FHA has proposed to bring its adjustable-rate mortgage (ARM) rules in line with those of the Consumer Financial Protection Bureau to enable FHA lenders to comply with the new servicing requirements under the Truth in Lending Act. Specifically, two proposed changes would align both agencies’ interest-rate adjustment and disclosure-notification regulations for ARM borrowers as required by the revised TILA. The CFPB issued its final TILA servicing rule in February 2013 but delayed the effective date for another year to allow the Department of Housing and Urban Development sufficient time to write rules for new notification requirements for FHA-insured ARMs with a 30-day look-back period. Hence, FHA ARMs must comply with the new TILA rule on or after Jan. 10, 2015. The FHA insures 1-, 3-, 5-, 7- or 10-year ARMs. The CFPB’s revised look-back period and notification requirements would ...

Housing-finance reform legislation is stalled for the remainder of this year and perhaps throughout the next congress after last week’s majority vote by the Senate Banking, Housing and Urban Affairs Committee to approve the bill, say industry observers. The committee voted 13 to 9 to report out a revised version of S. 1217, the Housing Finance Reform and Taxpayer Protection Act, just one vote more than the minimum to advance the bill for floor vote consideration. The committee approval likely marks...

The Senate Banking, Housing and Urban Affairs Committee voted 13-to-9 to report out a revised version of the controversial housing-finance reform legislation, but the bill’s tweaks weren’t enough to win the support of the panel’s liberal Democrat members. Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, released their initial draft in March, which built upon the bill submitted last year by Sens. Bob Corker, R-TN, and Mark Warner, D-VA. Though the Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, cleared committee with one more than the minimum 12 votes required, an affirmative vote of at least 16 of the 22 members of the panel had been seen...

In a few months, mortgage insurance giant Radian Group will close on its $305 million cash purchase of Clayton Holdings, ending the “independent” status of one of the nation’s largest MBS due-diligence firms. Almost all the larger due-diligence companies have been gobbled up by larger players over the past 18 months. Most of the acquirers have other interests in the residential finance industry and are betting on the eventual return of the non-agency MBS market. That could be...

Expect eligibility standards for mortgage insurance firms that rely on the GSEs later this year, according to MI executives’ reading of the long-awaited strategic plan released this week by the Federal Housing Finance Agency. Although the plan didn’t say much about MI eligibility, it does carry the veiled promise that pending standards, including risk-to-capital rules – are forthcoming. “FHFA hasn’t dropped the ball on the issue,” said one MI consultant who has met with the agency over the topic. “They now know that the [GSE reform bill] is dead and they want to make sure they get it right.”

The Federal Housing Finance Agency, under recently installed Director Mel Watt, will continue to ensure that the 12 Federal Home Loan Banks play their “important role” in providing reliable funding and secondary mortgage market access to member institutions, as well as maintain the Banks’ statutory affordable housing requirements, so said the man himself. Last week, in his first public speech before a financial services group, Watt cautioned FHLBank directors to keep a close watch on captive insurers that are seeking membership in the FHLB system.

The new Fannie Mae and Freddie Mac policy on loan-seller representations and warranties will likely burn off some of the fog that’s made mortgage lenders skittish about the product they deliver to the two government-sponsored enterprises, but it won’t eliminate industry buyback concerns. The new policy tinkers at the edges of the buyback safe harbor for loans with acceptable payment history. Loans with two 30-day late payments in the first three years can get a buyback waiver if they are current at the 36-month mark; until now such loans would only get a waiver if they performed for five years. More significant is...

During the first quarter of 2014, private mortgage insurance companies may have seen a somewhat bigger decline in new business than their government competitors, but the industry recorded arare achievement in terms of profitability, according to a new Inside Mortgage Finance analysis. For the first time since early 2007, all four of the private MIs that survived the mortgage apocalypse reported a profitable quarter. Mortgage Guaranty Insurance Corp., Radian, United Guaranty and Genworth all finished in the black, with a combined $296 million in income on their domestic MI activities. Different combinations of these four had reported profitable quarters at various times, and the industry as a whole has been profitable since the second quarter of last year. Including Essent Guaranty and National MI, the industry earned...[Includes three data charts]

When the Federal Housing Finance Agency unveiled its long-awaited strategic plan for Fannie Mae and Freddie Mac this week, it provided scant guidance on pending eligibility standards for mortgage insurance firms that rely on the government-sponsored enterprises. But the good news for the MI sector is that there was a mention of the topic and a vague promise that eligibility standards – including capital-to-risk rules – will see the light of day this year. Although the agency did not offer a specific timetable, MI executives told Inside Mortgage Finance that they expect to see the standards early in the second half. “FHFA hasn’t dropped...

The Department of Housing and Urban Development this week announced several measures to expand underserved borrowers’ access to credit and to protect the FHA insurance fund, including a new pilot that would qualify borrowers for reduced mortgage insurance premiums through counseling. In remarks to the National Association of Realtors’ Regulatory Forum, HUD Secretary Shaun Donovan unveiled a new “Blueprint for Access,” which echoes plans outlined in the Obama administration’s 2015 budget proposal. Donovan said...