Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...

The Department of Housing and Urban Development said it would review and update as necessary its requirements for servicers of FHA-insured loans in conjunction with the establishment of new standards by the Consumer Financial Protection Bureau. HUD wants to ensure coordination between the FHA and CFPB standards and that each set of standards provides effective solutions for borrowers, said an FHA spokesman. On April 9, the CFPB previewed some of the mortgage servicing rules, which the agency plans to propose this summer and adopt in January 2013. It is unclear whether ...

A national consumer advocacy group, whose own investigation of FHA credit overlays in 2010 triggered a federal probe of 19 FHA lenders, said it plans further undercover testing to ensure the unfair practices cease. The National Community Reinvestment Coalition said it is still waiting to hear from the Department of Housing and Urban Development about the results of the multiple investigations the group helped launch over a year ago in response to complaints about credit overlays. A HUD spokesman said the investigation is continuing and “nearing completion.” He did not say, however, why it was taking ...

Implementing proposed legislation aimed at improving the safety and soundness of the FHA single-family program would cost taxpayers $11 million over a four-year period if the bill is enacted in late 2012 and the necessary amounts are appropriated each year, according to the Congressional Budget Office. In an analysis of H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, the CBO estimated that $9 million would be spent on mandatory actuarial studies on the health of the FHA Mutual Mortgage Insurance Fund and $2 million for other costs over the 2013-2017 period. The legislation would not affect direct spending or revenues and, therefore ...

There is nothing in the FHA guidelines that would make a loan ineligible for FHA insurance if the property were located near high-voltage power lines, according to an agency official. Testifying during a recent congressional field hearing, Bobbi Borland, acting branch chief of the Department of Housing and Urban Development’s Santa Ana Homeownership Center, said FHA-insured mortgages are based on the property’s appraised value at the time of origination, as determined by an FHA-approved appraiser. “There is simply no easy way to identify whether ...

MetLife, Inc. has announced that it is leaving the reverse mortgage business as part of a broader business plan to exit the mortgage market and focus strategically on global insurance and employee benefits. Nationstar Mortgage will purchase MetLife’s reverse mortgage servicing portfolio. MetLife Bank will no longer accept new reverse mortgage loan applications and registrations. MetLife’s entire retail banking business, including mortgages, accounted for less than 2.0 percent of the company’s 2011 operating earnings. Last year, the company decided to ...

Mortgage industry participants have mixed views about the FHA’s revised policy on disputed debt despite a general concern over its impact on borrower eligibility and lenders’ bottom lines. This week, the FHA delayed implementation of the policy until July 1 to get more feedback from lenders and industry participants and to work on clarifying guidance. The policy’s initial effective date was April 1. Lenders felt the FHA had bypassed them when the agency decided to announce the policy revision in a Feb. 28 mortgagee letter, along with other FHA underwriting changes. Affected parties should have been able to ...

A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...

The focus on foreclosure documentation on forward mortgages has set the stage for similar scrutiny on reverse mortgages, and the extra documentation required in a reverse mortgage adds to this challenge, according to compliance experts. In a recent legal analysis, Christopher Willis and Mercedes Kelly Tunstall, litigation attorney and of counsel at the Washington law firm Ballard Spahr, respectively, said reverse mortgage lenders and servicers could avoid many of the problems encountered by forward mortgages by examining their foreclosure process carefully and learning from ...

American International Group, which at times has seemed reluctant to admit that it owned a private mortgage insurance business, is now considering using the MI subsidiary to expand its footprint in the mortgage business. In an interview with the Financial Times, AIG Chief Executive Robert Benmosche said that the company is considering purchasing the mortgages it insures, though it is still working on hammering out the program’s details. Citing the fact that AIG is still in the planning stages, a company spokesperson declined to comment further on the program, specifically on what kind of loans AIG will...