Half of the six active private mortgage insurers in the market reported solid earnings gains on their core MI business during the fourth quarter of 2017, enough to offset losses at the other three firms. As a group, the private MI industry generated $834.7 million in pre-tax income from their U.S. mortgage insurance operations during the fourth quarter. That was up 7.1 percent from the previous period and raised full-year income to $3.06 billion. The full-year ... [Includes one data chart]

FHA and VA single-family originations fell in the fourth quarter of 2017 due to a decline in purchase mortgage originations that was offset somewhat by an increase in refinance business. FHA endorsed $237.3 billion in forward single-family mortgages in 2017 notwithstanding an 11.9 percent drop in the fourth quarter. FHA production also dropped 7.1 percent year-over-year. Market observers attributed the decline in FHA originations to high mortgage insurance premiums, stiffer competition from private lenders’ low-downpayment programs, and a more aggressive conventional-conforming mortgage market. A new analysis by Inside Mortgage Finance also found that government-backed lending and the jumbo market saw the biggest production declines from the prior quarter. In particular, IMF’s research found that FHA, VA and U.S. Department of Agriculture rural-housing originations fell ... [Charts]

The Trump administration is seeking additional budget allocations in FY 2019 for FHA and Ginnie Mae to pay technology upgrades, additional staffing, and increased issuer oversight. The budget request seeks an additional $20 million above the 2017 enacted level of $130 million for FHA to upgrade its aging information technology – some still based on the antiquated COBOL programming language – and contract support. The additional funding would be offset by charging lenders an IT fee of no more than $25 per loan, according to the proposed budget for the Department of Housing and Urban Development. In addition, the 2019 HUD budget requests $400 billion in new loan guarantees under the Mutual Mortgage Insurance Fund for forward single-family mortgages Home Equity Conversion Mortgages, multifamily housing, and manufactured housing. The requested $400 billion would remain available ...

A greater focus on reverse-mortgage servicing and loss mitigation would be effective in addressing property-charge foreclosures while also preserving the Home Equity Conversion Mortgage program’s core mission of helping cash-strapped senior citizens, says a new study from the National Consumer Law Center. The study by staff attorney Odette Williamson and Sarah Mancini, of counsel to the NCLC, said the government’s mistaken response to surging insurance claims and increasing defaults on property tax and insurance obligations was to change origination policies. Specifically, the Department of Housing and Urban Development reduced the proceeds available through a reverse mortgage and imposed new underwriting guidelines to curb rising reverse-mortgage foreclosures and stem increased losses to the FHA insurance fund. Although the repercussions of the two distinct problems related to ...

IG Looking into Role Secretary’s Family Plays at HUD. The Department of Housing and Urban Development’s inspector general is looking into the role members of Secretary Ben Carson’s family have played at the agency, CNN reported this week. According to the report, Carson himself called for the IG review following an earlier Washington Post report that HUD officials are raising ethics questions about the activities of Carson’s son and daughter-in-law at the agency, including helping to organize a listening tour for the new secretary in Baltimore last year. HUD’s lawyers reportedly warned Carson of a potential violation of federal ethics rules, according to an internal memo the Post obtained through the Freedom of Information Act. Ginnie Mae MBS Outstanding Increases to $1.9 Trillion. Ginnie Mae’s mortgage backed-securities issuance totaled $36.4 billion in January, which included ...

Private mortgage insurers took a bigger share of the primary MI market last year, although the VA program rebounded in the fourth quarter, a new Inside Mortgage Finance analysis reveals.

The U.S. Department of Agriculture provided $19.3 billion in rural housing loan guarantees under its largest single-family housing program in FY 2017, according to the USDA Rural Housing Service. Last year’s total guarantees were $2.92 billion more than in fiscal 2016. Approximately 137,071 USDA loans were securitized in 2017. According to RHS, in October 2017, the loan guarantee upfront fee fell from 2.75 percent plus a monthly 0.5 percent fee to 1.0 percent plus an annual fee of 0.35 percent. The fee drop helped reverse a decline in obligations from the previous year, RHS noted. The average income for a Section 502 single-family guaranteed loan borrower was $59,191 in fiscal 2017, up from $57,962 in the prior fiscal year. For the lower-income Section 502 Direct program, USDA provided approximately $1.0 billion in housing loan guarantees, about $41.7 million higher than the ...

FHA delinquencies rose sharply in Puerto Rico following the devastation brought by hurricanes Maria and Irma last year. At the end of 2017, 28.8 percent of FHA mortgages on the island were at some stage of delinquency, including 15.8 percent that have fallen 90 days behind on their mortgage payments. Deutsche Bank Securities analysts believe the spike in delinquency rates overall is “a short-term phenomenon.” They noted that FHA, Fannie Mae and Freddie Mac have declared temporary moratoria on evictions and foreclosures in Puerto Rico and other hurricane-ravaged regions. Issuer exposures in devastated areas remain unclear and Ginnie Mae has not updated its MBS hurricane exposure data since October last year. In the initial disclosure, the agency reported 9.7 percent (1,066,028 loans) of its total MBS portfolio were impacted by Harvey, Irma and Maria. The affected loans’ unpaid principal ...

Several private mortgage insurers have announced they will no longer insure mortgage loans with a debt-to-income ratio exceeding 45 percent when combined with weaker credit profiles.

The severe hurricanes that tormented a handful of markets during late summer of 2017 continued to push FHA default rates higher in the fourth quarter, a new Inside FHA/VA Lending analysis reveals. The number of FHA loans paying on time fell from 92.8 percent at the end of September to 91.9 percent at the end of the fourth quarter. Most of the deterioration took place in the more severe default categories. The number of FHA loans 90 days past due more than doubled during the three-month period, climbing to a hefty 0.92 percent of outstanding loans. And the number of FHA loans more than three-payments late increased by 39.7 percent, reaching 1.01 percent of the total outstanding. Three jurisdictions that bore the brunt of hurricanes Harvey, Irma and Maria – Texas, Florida and Puerto Rico – saw huge increases in FHA defaults. Puerto Rico saw a devastating impact in rising ... [Charts]