Private mortgage insurers had one of their strongest quarters in recent memory in the spring of 2018, thanks to a surge in new insurance written and a healthy upturn in profitability, according to a new Inside Mortgage Finance ranking and market analysis. [Includes two data charts]

The GSEs have recently updated their policies as they look to simplify borrower-initiated requests to cancel private mortgage insurance coverage. Fannie is the latest to announce plans to update the various methods it uses for verifying current property values and said it will require servicers to implement the new policy by March 1, 2019. Borrower-initiated requests to terminate mortgage insurance based on the home’s original value no longer need to depend on servicers to warrant the property value, under Fannie’s new policy. The GSE said lenders can use the GSE’s Automated Property Service tool to verify the current...

Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

The U.S. Department of Agriculture wants to begin charging lenders a fee on each guaranteed rural-housing home loan beginning Jan. 2, 2019, to fund future information-technology upgrades. In a notice published in the July 13 Federal Register, the agency said it expects to levy a $25 user fee for using the Rural Housing Service’s automated loan-guarantee systems. Comments are due Sept. 11, 2018The fee collection is authorized under the 2016 Housing Opportunity Through Modernization Act as a “technology fee” to improve program delivery and “reduce burden to the public.” The authorized fee can be up to $50 per loan. It will be collected at closing. The Department of Housing and Urban Development has been trying unsuccessfully to obtain authority from Congress to charge a similar fee to modernize its aging information technology. The USDA said it would notify lenders before the ...

The Mortgagee Review Board’s improvement of its processes and use of administrative actions has greatly eased its backlog of lender recertification cases, according to the Department of Housing and Urban Development’s internal watchdog. An audit by HUD’s inspector general found a vastly improved enforcement of MRB mandates and application of penalties to lenders compared to previous findings. An analysis of the board’s FY 2016 activities found, among other things, that 19 lenders with the same violation received the same penalty. The report attributed the change to the board’s decision to assign staff to implement recommendations in the IG’s evaluation report in May 2009. The 2009 audit raised concerns about the speed of the MRB process, the number of cases on which the board rules, and the magnitude of penalties it levies. The MRB rules on cases against FHA lenders where there ...

Fannie Mae recently announced plans to simplify its private mortgage insurance cancellation policy. In a letter that went out to lenders last week, the government-sponsored enterprise updated the different methods for verifying current property values.

Fannie Mae’s new mortgage insurance pilot announced last week is troubling to mortgage insurers who continue to question the GSEs’ blurring of lines between primary and secondary markets. Fannie’s Enterprise-Paid Mortgage Insurance program is billed as just a way to give lenders another option for obtaining mortgage insurance for high loan-to-value loans. Under the pilot, Fannie will arrange primary MI coverage for existing private MIs or a panel of affiliated reinsurers. Fannie said the new option allows the GSE to streamline the operational requirements of participating lenders, increase the certainty of coverage and better manage Fannie’s counterparty risk. Fannie officials explained that they expect traditional mortgage insurance to be the primary cover for loans with LTVs over 80 percent.

Analysts speculate that the new capital requirements expected for private mortgage insurers will be higher than current standards. Reinsurer capital requirements under Fannie Mae’s new Enterprise-Paid Mortgage Insurance pilot may be an indicator of upcoming private mortgage insurance eligibility requirements (PMIERs), according to analysts with Keefe, Bruyette & Woods. KBW said with PMIERs expected to be finalized around the time the EPMI starts, it’s possible that reinsuer capital standards could be similar to PMIERs 2.0. “If the capital requirements for reinsurers end up being the same as PMIERs 2.0, we estimate the capital requirements for the MIs would be roughly 10 percent higher than under PMIIERs 1.0,” said KBW.

California remained the biggest market in the U.S. for primary mortgage insurance during the second quarter, but other states had higher proportions of insured loans, according to an Inside Mortgage Trends analysis of agency loan-level data. In Florida, Virginia and Georgia, more than 60 percent of agency loans carried some form of primary mortgage insurance ... [Includes one data chart]

The seasonal surge in housing sales produced a strong increase in primary mortgage insurance activity during the second quarter, especially for private MIs, according to an Inside Mortgage Finance ranking and analysis. [Includes three data charts.]