Many condominium properties continue to struggle to meet stringent FHA requirements while many condo projects are being denied approval despite the easing of FHA approval requirements in recent years. Panelists at a recent National Association of Realtors conference in New Orleans said condos are often the most affordable homeownership option for first-time homebuyers, single borrowers and senior citizens, especially when purchased with FHA financing. Condominium loans are among the strongest performing loans in the FHA portfolio, they added. However, FHA data show that ...

Imprecise rules, triple-damage claims and increasingly political enforcement of agency rules could make it more dangerous for lenders to do business with the FHA than to originate non-qualified mortgage loans, according to a top compliance expert. Larry Platt, a partner with K&L Gates, said that when lenders originate and underwrite FHA loans they are subjected to rules that are unevenly applied and politically enforced. It is a prescription for a financial bloodbath, especially if you add to it the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, he added. Throwing the Department of Justice into the mix ...

FY 2013 Actuarial Review of Insurance Fund Out in Mid-December. The Department of Housing and Urban Development expects to issue the long-anticipated FHA FY 2013 independent review of the state of the FHA’s Mutual Mortgage Insurance Fund during or before the middle of December. The report’s release was delayed due to the three-week government shutdown in October. The report will show FHA taking a mandatory appropriation of $1.7 billion to close out FY 2013. HUD has clarified that the draw is an accounting transfer required to close out the FHA’s FY 2013 books and not a reflection of ...

The regulatory regime currently contemplated in government-sponsored enterprise reform legislation in the Senate doesn’t go far enough, according to officials at the Federal Housing Finance Agency and others. At a hearing this week by the Senate Committee on Banking, Housing and Urban Affairs, Alfred Pollard, general counsel at the FHFA, testified that the regulatory functions included in GSE reform legislation from Sens. Bob Corker, R-TN, and Mark Warner, D-VA, should be enhanced. “Making regulatory authority clear and explicit, including where appropriate the ability to establish prudential standards, set capital requirements and take enforcement actions, would enhance...

Current homeowners have increasingly purchased homes with cash in lieu of a mortgage in recent months, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Analysts suggest that the trend is driven by frustrations with the mortgage process and seasonal factors. Some 28.6 percent of home purchases completed in October relied solely on cash for financing, based on the three-month moving average. That was the second consecutive monthly increase in the cash-financing share, after it fell to 26.8 percent in August. While investors predominantly use cash to purchase homes, homeowners tend...

Industry stakeholders called upon lawmakers to delay the implementation of hefty increases in flood-insurance premiums as a result of the Biggert-Waters Flood Insurance Act of 2012. However, support among lawmakers for delaying the mandated changes appear to be weak. In a hearing this week in the House Financial Services Subcommittee on Housing and Insurance, Republicans and Democrats apparently were unswayed by community advocates, academics, the National Association of Realtors and the National Association of Home Builders regarding the financial pain being inflicted by the Biggert-Waters Act on homeowners. The sudden, dramatic increase in flood insurance premiums – some by as much as 1,000 percent – are leaving...

Republic Mortgage Insurance Corp. – which hopes to re-enter the MI space sometime in the next year – on Friday agreed to a $100,000 settlement with the CFPB, settling allegations that it paid illegal kickbacks to lenders for at least 10 years. In a statement, the CFPB said RMIC “provided kickbacks to mortgage lenders by purchasing captive reinsurance that was essentially worthless but was designed to make a profit for the lenders. The kickbacks were in exchange for referrals of private mortgage insurance business from the lenders.”...

The FHA is working to create a quality-assurance framework with enhanced reporting built around QA results as well as a refined approach to identifying underwriting defects, according to a top agency official. There is much uncertainty in the mortgage market today and one way to address that is to create a clear framework for lenders explaining FHA’s view of underwriting defects, how they are defined as well as their consequences, said Charles Coulter, deputy assistant secretary for housing with the Department of Housing and Urban Development. Speaking at the recent Mortgage Bankers Association annual convention, Coulter said the ...

The FHA’s effort to reduce its presence in the mortgage market to make room for private capital would be derailed if Fannie Mae and Freddie Mac raised their guaranty fees, warned an agency official. Responding to a question during the Mortgage Bankers Association’s annual convention, Charles Coulter, deputy assistant secretary for single-family housing at the Department of Housing and Urban Development, said the FHA is currently “priced appropriately” and sees no need to further increase mortgage insurance premiums. The FHA has lost about 20 percent of its share of originations after five MIP increases in ...

Applying certain private mortgage insurance practices and requirements to FHA may not be as ideal as some proponents suggest because they do not fit in the business environment in which the FHA operates, according to a new study from the Government Accountability Office. Nonetheless, the regulatory framework for private mortgage insurers has features that could enhance the transparency of the FHA’s Mutual Mortgage Insurance Fund and Congress’ oversight of FHA’s operations, the study concluded. The GAO did the study at the request of ...