The private mortgage insurance industry is expressing optimism with the positive changes seen lately in the housing market while hoping that Congress or the Obama administration do nothing to impede or spoil the markets recovery. Industry executives say stabilizing home values, low interest rates, better quality mortgages and a shrinking FHA share of the mortgage market are helping MIs win back market share and write new business. Everybody is trying to write as much business as they can to regain share, said Michael Zimmerman, senior vice president for investor relations at Mortgage Guarany Insurance Corp. New insurance written is...
Reportedly dire findings of the annual independent audit of the FHA insurance fund due for release late this week may set off alarms in Congress and calls for reform but not a taxpayer rescue as some FHA critics have suggested, according to the Mortgage Bankers Association. Recent news reports indicated that the fiscal 2012 actuarial review of the FHAs Mutual Mortgage Insurance Fund will show a negative economic value or capital reserve position, which some say could require the Treasury to bail out the FHA to boost its claims-paying ability. There is speculation that the fund could go from a predicted economic value of positive $9.4 billion in last years study to as much as negative $10 billion this year. A deficit should not be...
The mortgage lending industry won a couple of key legal challenges recently, including an unusual claim brought under the Racketeer Influenced and Corrupt Organizations Act. In Cabrera v. Countrywide Financial, the U.S. District Court for the Northern District of California recently dismissed, without prejudice, most of the complaint brought by two borrowers who accused the mortgage lender of engaging in fraudulent loan practices in violation of the RICO Act. In July 2007, Manuel Cabrera received...
A task force of state insurance regulators has agreed to require insurers to set aside additional capital to cover risks tied to residential and commercial MBS in an effort to buffer the industry from losses in the event of a severe downturn. The National Association of Insurance Commissioners Valuation of Securities Task Force voted 11-2 to support a proposed increase in the NAICs capital requirements for U.S. life insurers. The change in capital requirements is driven by year-end NAIC modeling assumptions related to RMBS and CMBS. The change raises...
Wells Fargo has asked a federal district court in Washington, DC, to declare the U.S. government in violation of the terms of the landmark $25 billion mortgage servicing fraud settlement earlier this year that resolved federal and state claims against the bank and four other major servicers for alleged servicing malpractices. In a complaint filed last week, Wells Fargo also asked the D.C. court to order the Department of Justice to halt all legal actions seeking to impose additional liability on Wells Fargo based on a ...
There is substantial risk that the FHA may end up with a negative net worth, which would require congressional appropriations for the mortgage insurance fund and passage of legislation reforming the FHA, said a former top official at the Department of Housing and Urban Development. In remarks this week at the Urban Institute, John Weicher, former assistant secretary for housing and FHA commissioner in 2001-2005, said it is very unlikely in this weak economic recovery to see ...
The volume of loans guaranteed by the Department of Veterans Affairs rose 4.0 percent in the third quarter of 2012, reflecting an upward trend that the agency attributes to strong underwriting. A production increased to $33.3 billion from $32.0 billion in the second quarter and $28.3 billion in the first quarter. The agency reported $93.6 billion in total originations over the nine-month period, with refinancing accounting for 51.8 percent of guaranteed loans. VA has had the best performing loans in the industry for quite some time, with the ... [1 chart]
Banks that say they were less likely to approve an application for an FHA-insured mortgage cited a higher risk of putback of delinquent mortgages by the FHA as an important reason for the change, according to the Federal Reserves latest survey of bank lending practices. Responding to a special question on FHA lending, 14 of the respondents (36.8 percent) ranked putbacks as a very important issue, nine banks (23.7 percent) thought it was the most important while an equal number said it was somewhat important. Nine of the 14 respondents were ...
A second-term Obama administration is expected to continue support for lowering maximum loan-to-value ratios and upward premium pricing to strengthen the FHAs Mutual Mortgage Insurance Fund, according to the Mortgage Bankers Association. While President Obama has indicated an interest in reducing the FHAs presence in the mortgage market for a larger private sector role in mortgage finance, he is inclined to proceed cautiously so as not to disrupt consumer access to affordable FHA financing, said MBA President/CEO David Stevens. Stevens observed that Obama has been ...
GSEs, Private MIs Agree to Drop Pre-Approval Requirements. Fannie Mae and Freddie Mac and the private mortgage insurance industry have agreed to eliminate pre-approval requirements for foreclosure alternatives, such as short sales and deeds-in-lieu of foreclosure. The separate agreements with MIs should help distressed homeowners avoid foreclosure by doing away with costly, time-consuming MI reviews that delay foreclosure-prevention transactions, according to the government-sponsored enterprises. WIMC Fully Acquires Reverse Mortgage Solutions. Walter Investment Management Corp. has completed its $120 million acquisition of ...