MGIC Investment announced late last week that it won certain concessions from Freddie Mac and the two are working to resolve a dispute regarding mortgage insurance pool pricing by the end of this month. Freddie cut a required capital contribution by MGIC Investment in half and allowed a significant expansion of the number of areas in which an MGIC subsidiary can write new business. “I am pleased with the spirit of cooperation all parties have shown in moving forward to reach this point,” said Curt Culver, chairman and CEO of MGIC Investment and Mortgage Guaranty Insurance Corp. “While there can be no guaranty that the open matters that remain can be successfully resolved, I am hopeful we will continue to make progress.” In May, MGIC filed...

New temporary guidelines for approving FHA financing for condominium projects should boost sales of condo units across the country and improve current housing market conditions, according to industry stakeholders. The Department of Housing and Urban Development announced the guideline changes on Sept. 13 after extensive consultations with industry participants. Effective for all condo project approvals and recertifications, the revised guidelines will apply until Aug. 31, 2014, unless extended by the FHA. Stakeholders are confident that the changes, though temporary, will be ...

CitiMortgage this week paid in excess of $122.8 million to the FHA Mutual Mortgage Insurance Fund as part of its agreement with the Department of Housing and Urban Development and the Department of Justice to settle alleged violations of the False Claims Act. The payment to the FHA insurance fund is part of the $158.3 million settlement, which CitiMortgage agreed to in order to resolve charges of submitting false certifications to HUD regarding its compliance with FHA’s direct endorsement lender rules and endorsement of poorly underwritten loans for FHA insurance. These violations allegedly occurred between ...

The FHA’s seriously delinquent rates and early payment defaults went virtually unchanged in the second quarter of 2012 from the previous quarter, according to the Department of Housing and Urban Development’s latest report on single-family programs covered by the FHA insurance fund. FHA data showed that the seriously delinquent rate for insured single-family mortgages (excluding streamline refinances) held at last quarter’s level of 9.4 percent, which is 1.4 percent higher than this period a year ago. The report attributed the elevated level to two factors. The first is the persistency of loans in 90-day delinquency as lenders try ...

The antiquated backbone of the FHA’s Home Equity Conversion Mortgage program will soon be history with the official launch of HERMIT on Oct. 9. HERMIT, or the Home Equity Reverse Mortgage Information Technology, is a second generation, web-based automated system, designed to improve the Department of Housing and Urban Development’s ability to track and monitor its HECM portfolio in real time. The system also automates the payments of insurance claims while increasing efficiency and mitigating risks to the FHA insurance fund. HERMIT consists of a servicing module and an accounting module to ...

Fixed-rate mortgages comprised most of August’s FHA production, which totaled $22.1 billion, up 13.2 percent from July and 37.9 percent from a year ago, according to an Inside FHA Lending analysis of FHA data. FRMs accounted for 98.9 percent of new loans with FHA insurance in August. In-house originations made up 79.6 percent of new endorsements while purchase loans accounted for 56.1 percent of FHA originations during the month. Wells Fargo is the only top FHA lender to exceed the billion-dollar mark. In fact, the bank reported $2.2 billion in new FHA originations, 76.0 percent of which were produced in-house. The purchase mortgage share of Well’s total FHA originations was ... [2 charts]

The FHA Short Sale program may have cost the Department of Housing and Urban Development more than $1 billion in ineligible claims but only a portion may actually be recovered, according to a report from HUD’s Office of the Inspector General. A HUD OIG audit estimated that the department paid $1.06 billion in claims for 11,693 preforeclosure sales that did not meet FHA’s criteria for participation in the program. The OIG said it began a nationwide review of the short sale program after finding significant deficiencies in borrower qualifications during an audit of CitiMortgage’s preforeclosure sale claims last year. Auditors found ...

The Consumer Financial Protection Bureau is pushing full-speed ahead with its probe of the mortgage industry’s use of captive reinsurance by directing PHH Corp. to comply with an earlier civil investigative demand – the functional equivalent of a subpoena – within three weeks, brushing aside the company’s numerous objections. “PHH’s petition to modify or set aside the CID in this matter is denied,” CFPB Director Richard Cordray ruled last week. “Within 21 days of this decision and order, PHH is directed to produce all responsive documents, items and information within its possession, custody or control that are covered by the CID.” Cordray added that PHH is...

Old Republic International Corp. is seeking state regulators’ approval of a revised run-off plan for its mortgage guaranty unit, Republic Mortgage Insurance Co., which proposes to pay 60 percent of all settled mortgage-insurance claims, up from 50 percent, and defer the remaining 40 percent until claim reserves are sufficient to pay the balance in full. The North Carolina Department of Insurance, RMIC’s primary regulator, is reviewing the so-called 60-40 corrective plan, which ORIC wants to remain in place at least through Dec. 31, 2021, while RMIC continues to operate under supervision of state regulators. The plan is designed...

The House of Representatives this week overwhelmingly approved legislation that would help the FHA remain solvent and avoid a potential taxpayer bailout. Lawmakers passed the FHA Fiscal Solvency Act of 2012 by a vote of 402-7 on the heels of a Department of Housing and Urban Development report to Congress showing a slight second-quarter decline in the single-family Mutual Mortgage Insurance Fund. The report, which provides a quarterly view of the composition and credit quality of new insurance, showed FHA capital decreasing slightly over the last quarter from $32.3 billion to $31.6 billion. FHA’s total capital is ...