Wells Fargo recaptured its crown as the leading VA jumbo securitizer, pushing Penny Mac back to second place even as the market dropped further in the second quarter. The volume of VA jumbo loans securitized during the second quarter declined by 5.2 percent from the prior quarter and by 11.8 percent during the first half of 2017 compared to the same period last year. VA jumbo mortgage originations were off by 4.3 percent from the first quarter, according to an analysis by Inside FHA/VA Lending affiliate Inside Mortgage Finance. Agency-jumbo production sagged in the second quarter but the results were not uniform. Fannie Mae production was up 6.5 percent from the prior quarter, while FHA jumbo securitization gained 7.2 percent during the period. At the same time, VA jumbo securitization was down 5.2 percent to $7.4 billion from $7.8 billion, while Freddie Mac saw a hefty 27.8 percent drop in ... [Charts]

A previously obscure FHA program for properties in designated disaster areas is getting more interest from lenders in the wake of hurricanes Harvey and Irma. According to FHA data, there has been a noticeable increase in loans originated under the FHA 203(h) mortgage insurance program, which is designed specifically for hard-hit homeowners in presidentially declared major disaster areas (PDMDA). Origination under the 203(h) program rose from $17.8 million in 2015 to $64.1 million in 2017, data showed. Use of the 203(h) product spiked in the fourth quarter of 2016, when 180 loans totaling $34.0 million were originated, up from 47 in the previous quarter and 26 loans from the same period in 2015. The U.S. experienced more floods in 2016, 19 in all, than any year on record, according to an analysis by Munich Re, a global reinsurance firm. In post-hurricane guidance, FHA urged lenders to ...

The Congressional Budget Office has put forth a white paper with several options to minimize taxpayer risk in the FHA program. Although FHA delinquencies are at historical lows, the CBO would like less government exposure to FHA risk, fearing that the growing popularity of private sector programs will leave the government stuck with bad loans. CBO estimates that “the share of FHA-insured mortgages going to such borrowers is likely to keep shrinking as credit standards in the private market continue to ease. That change would leave FHA with a riskier pool of borrowers, creating risk-management challenges similar to the ones that contributed to the agency’s high levels of insurance claims and losses during the recession.” According to Inside Mortgage Finance’s database, FHA lending accounted for approximately $70.6 billion, or 15.4 percent, of all first-lien lending in the second quarter. CBO’s white ...

The Mortgage Bankers Association has asked the Department of Housing and Urban Development to tweak its current re-inspection policy, which may be interfering with certain home-sale transactions. In a recent letter, the MBA asked HUD to realign its re-inspection policy with those of the government-sponsored enterprises and the VA to prevent it from hindering sales that were in progress prior to hurricanes Harvey and Irma but had not closed when the storms hit. The MBA said the current policy requires that the inspection be completed after the Federal Emergency Management Agency’s “incident period.” HUD interprets this to mean the end date of the incident period. Because such periods can run anywhere from a few weeks to a couple of months and could be reopened or extended, many borrowers face needless delay from completing a home sale, even where there is no ...

LoanDepot has announced a key FHA disaster-related mortgage loan product to help families whose homes have been damaged or destroyed by hurricanes Harvey and Irma. Loans made through the FHA 203(h) Mortgage Insurance for Disaster Victims program are designed specifically for hard-hit homeowners in presidentially-declared major disaster areas (PDMDA) and can be used in tandem with a similar FHA product, the 203(k) property rehabilitation loan. Use of the 203(h) product spiked...

The CFPB’s much-criticized arbitration rule issued earlier this year took effect last week, as a successful vote in the Republican-controlled House of Representatives to overturn it failed to generate enough interest and support for a comparable move in the Senate. It’s likely that the massive Equifax data breach and the company’s seeming attempt to manipulate affected individuals to waive their rights to arbitration in order to sign up for free credit-monitoring services effectively killed what little interest senators may have had in following up on the House’s success. The failure is another blow to a political party that ostensibly controls the Senate, the House and the White House but is struggling to accomplish much legislatively, thanks in part to the ...

Although flood insurance is required for Fannie Mae and Freddie Mac loans in designated flood areas, the recent hurricane activity in Houston and Florida has revealed that a number of borrowers didn’t have the coverage they were supposed to have. But getting to the root of the disconnect is complicated. Both government-sponsored enterprises said that it’s up to servicers to evaluate whether loans are in compliance with flood insurance requirements. But Fannie and Freddie said they also have their own systems in place to help ensure compliance. “Servicers are required...

Most rated residential MBS in regions affected by Hurricanes Harvey and Irma have limited exposure that will mitigate the losses resulting from the devastation, according to rating services. Residential MBS rated by Moody’s Investors Service, including securities backed by single-family rental properties, have minimal exposure to the storm-affected counties of Texas and Louisiana thereby easing the losses due to reduced property values, rising delinquencies and longer foreclosure and liquidation timelines, the rating agency said. The analysis is...

Rapid, aggressive refinancing of VA loans has made a comeback with some issuers using strategies to mask the practice and avoid possible penalties, including expulsion from the Ginnie Mae program, according to a top agency official. Responding to concerns raised by Sen. Elizabeth Warren, D-MA, Michael Bright, acting Ginnie Mae president and chief operations officer, said a joint Ginnie Mae/VA lender-abuse task force is analyzing monthly data and developing additional policy measures to deal with the problem. Bright confirmed the resurgence of inappropriate streamline refinancing in Ginnie securitization pools in recent weeks and has promised to crack down on the questionable practice. The problem surfaced last year when Ginnie Mae noticed unusually fast prepayment speeds in its mortgage-backed securities, particularly MBS backed by VA loans. Ginnie found that certain lenders and ...

The White House this week officially nominated industry veteran Brian Montgomery to be the next FHA commissioner and assistant secretary for the Department of Housing and Urban Development. In a related development, the Senate on Thursday confirmed the nomination of Pamela Pantenaude as HUD deputy secretary, three months to the day the Senate Committee on Banking, Housing and Urban Affairs approved her nomination. Montgomery, currently vice chairman of the Washington-based business-consulting firm The Collingwood Group, is no stranger to the job. He previously served as FHA commissioner/HUD assistant secretary during the second Bush administration and as acting HUD secretary in January 2009. As FHA commissioner, Montgomery lead legislative efforts to preserve the nation’s affordable rental housing stock while reducing rental-assistance costs and the cost of ...