The Department of Housing and Urban Development’s Mortgagee Review Board sanctioned 57 lenders in FY 2013 and withdrew the authority of 29 others to originate, underwrite and service FHA-insured loans due to various offenses. The MRB meted out civil fines of more than $2.5 million and imposed sanctions from Oct. 1, 2012, through Sept. 30, 2013, according to an agency report. Additionally, the FHA reached 21 settlement agreements with various lenders in FY 2013, and entered into indemnification agreements with 10 more lenders during the period. The agreements covered 187 FHA-insured mortgage loans. Cases heard by the MRB from ...

The Department of Housing and Urban Development has replaced the information brochure that goes with FHA lenders’ mandatory cover letter alerting delinquent borrowers of the possibility of foreclosure. HUD requires lenders to notify FHA borrowers in default no later than the 60th day of delinquency via cover letter and a copy of a brochure, “Save Your Home: Tips to Avoid Foreclosure.” This resource replaces the previous brochure, HUD-PA-426, and includes information on the revised loss-mitigation tools available for delinquent FHA borrowers. The new brochure has been ...

FHA endorsements fell 25.1 percent in the third quarter of 2013 from the previous quarter as interest rates roller-coastered and refinancing lost steam, according to Inside FHA Lending’s analysis of FHA data. After delayed reporting for two months, the FHA also released data showing a 27.9 percent decline in new endorsements in November from October, with lenders reporting $8.7 billion in total originations for the month. Purchase mortgages accounted for 77.1 percent of November’s FHA volume. Fixed-rate mortgages comprised 97.2 percent of total originations for the month. On a quarter-to-quarter basis, production fell to ... [2 charts]

Private mortgage insurers have launched a number of initiatives to help lenders comply with the qualified-mortgage rule that took effect Jan. 10. The rule issued by the Consumer Financial Protection Bureau puts new emphasis on capping debt-to-income ratios at 43 percent – except for agency mortgages – and limiting points and fees to 3 percent. Radian has announced 45-minute webinars discussing how QM impacts mortgage insurance as well as new, lower pricing for borrower-paid MI. The firm’s Loan Amount Estimator enables lenders that are capping their debt-to-income ratios at 43 percent to calculate maximum loan amounts and sale prices based on the MI product selected. In addition, the tool can be used for non-MI loans and is available through the MI’s rate finder application, Radian Rates. United Guaranty’s QMI product allows...

The Federal Housing Finance Agency – via Fannie Mae and Freddie Mac – is preparing new eligibility standards for mortgage-insurance firms and plans to show a first draft of the rules to state insurance regulators, Inside Mortgage Finance has learned. Private MIs may not get a peek at the rules until sometime in March. Also, insurance regulators may be required to sign a “non-disclosure” agreement with the FHFA or the government-sponsored enterprises regarding the content they see. Among other things, the eligibility standards will establish...

Recent announcements of revised loan-level price adjustments for the government-sponsored enterprises and risk-based pricing are fueling fears of FHA resurgence in the market. Consistent with the Federal Housing Finance Agency’s stated intent to raise the GSE guaranty fees by about 11 basis points, Fannie Mae and Freddie Mac released revised loan-level price adjustments (LLPAs) on Dec. 16. The upfront fee hike takes mortgage rates for affected borrowers close to FHA pricing levels, according to industry analysts.

The Department of Housing and Urban Development is seeking comment on a policy change that would reduce the FHA’s credit-score threshold from 620 to 580 to allow more manually underwritten borrowers to use compensating factors that would help them qualify for an FHA-insured mortgage loan. The change would strengthen manual underwriting and reduce FHA’s underwriting losses, resulting in more revenue per loan for FHA, HUD said. “The FHA can control costs through risk management practices,” the agency explained in a notice of rulemaking. “The lower costs are a gain to FHA.”

The Department of Housing and Urban Development this month expects to issue a final rule that would eliminate the process of requesting alternative FHA maximum loan limits due to improved access to, and availability of, home sales data. With the availability of comprehensive national databases of home sales transactions and continuing data-collection efforts, the regulations governing requests for alternative maximum mortgage limits have become outdated and unnecessary, the agency said.

The Department of Housing and Urban Development warned of tougher enforcement against servicers who do not make full use of HUD’s loss mitigation tools, as it announced the implementation of a newly revised tiered servicer ranking system. The new system, Tiered Ranking System II, features a new scoring mechanism that would help HUD determine which lenders get higher reimbursement rates on claim expenses based on their servicing performance.

FHA and VA loans backing Ginnie Mae pools in 2013 showed an average mid-range FICO score of 693, lower debt-to-income ratio and an average loan size of $187,268, confirming strict underwriting in both government programs, according to an Inside FHA Lending analysis of Ginnie Mae loan-level disclosures. Issuers securitized $370.4 billion of mortgages with first payment date in 2013 through November. Loan characteristics exclude loans with no information reported.