The Trump administration has revived a controversial proposal to tap FHA lenders to help pay for technology upgrades at the Department of Housing and Urban Development. HUD is among nine federal agencies facing significant cuts in their discretionary budgets, al-though guarantee commitments for FHA’s single-family mortgage insurance program and Ginnie Mae mortgage-backed securities programs were kept at their previous fiscal levels, $400 billion and $500 billion, respectively. The White House budget plan incorporates...

The CFPB had numerous lapses in protecting sensitive, confidential enforcement information, according to a new report from the agency’s Office of Inspector General. The objective of the OIG’s evaluation was to determine whether the bureau’s Office of Enforcement has effective controls to manage and safeguard access to its confidential investigative information (CII). “We found that the Office of Enforcement’s sensitive information has not always been restricted to Office of Enforcement employees who needed access to that information to perform their assigned duties,” the OIG said. The watchdog said it found that 113 unique users had access to at least one electronic application when it was no longer relevant to the performance of their assigned duties. “These users continued to have ...

Officials at Fannie Mae and Freddie Mac say pilot deals that feature added primary mortgage insurance at the front end of the securitization process are a useful addition to their credit-risk transfer programs even if their future looks somewhat limited. Speaking at a CRT conference in New York City this week, Robert Schaefer, Fannie’s vice president for credit enhancement strategy and management, called the transactions “a good tool in the toolkit,” but said he doesn’t see them taking over the majority of CRTs. Gina Healy, Freddie’s vice president of credit risk transfers, agreed...

The Financial Services Roundtable recently called for enacting comprehensive housing finance reform, including reform of the FHA’s single-family mortgage insurance program while focusing the agency’s mission on first-time and low- and moderate-income borrowers. The FSR’s call came in a detailed response to President Trump’s executive order earlier this year directing the Treasury Department to conduct an assessment of financial regulations. For starters, the trade group urged...

The Securities and Exchange Commission has opened an investigation into certain single-family rental securitizations and is requesting information from market participants, including Green River Capital, a subsidiary of a private mortgage insurance company. The investigation first came to light when Radian Group disclosed in a recent 10-Q filing that Green River received a letter from the SEC requesting information regarding broker price opinions that GRC provided on properties included in SFR transactions. Green River, which falls under Radian’s Clayton Holdings affiliate, is...

An affiliate of NMI Holdings, Emeryville, CA, has issued a $211.3 million, 10-year credit-linked bond aimed at laying off risk at its mortgage insurance affiliate National MI. The notes were issued by NMI affiliate Oaktown Re Ltd. in three tranches: $98.61 million that filled the M-1 class, $98.61 million (M-2), and $14.1 million (B-1). The yields, respectively, are LIBOR plus 225 basis points, LIBOR plus 400 basis points, and LIBOR plus 575 bps. According to Robert Smith, National MI senior vice president of pricing and portfolio analytics, investors that bought the credit-linked notes were...

Nonbank lenders far out-produced depository institutions in originating FHA mortgages during the first quarter of 2017. A new Inside FHA/VA Lending analysis reveals that nonbank lenders produced over 83 percent of FHA forward loans endorsed during the first quarter. With over 8,000 entities listed as originators and sponsors in FHA loan-level data, the overwhelming majority of them were independent mortgage banks, mortgage brokers and other nonbank lenders. The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot. One sign of the overwhelming fragmentation in the FHA primary market is the fact that these three lenders accounted for just 11.3 percent of first-quarter endorsements. The largest depository originator of FHA loans was PrimeLending, an affiliate of PlainsCapital Bank. It ranked 15th in production with a ... [charts ]

What is an “egregious” VA mortgage loan? Panelists at last month’s VA Lending Conference in Kansas City, MO, helped shed light on such loans by describing them as flawed and in violation of VA requirements. “But there’s more,” said Greg Nelms, VA chief of loan policy. Unstable income and use of active-duty income when that income will be extinguished within one year could taint a VA loan and make it egregious, said Nelms. High debt-to-income ratio, residual income that is below VA requirements and failure to consider a spouse’s debts or credit in a community-property state also could have an adverse effect on a VA loan, he added. The panel presented several “egregious loan” scenarios involving reviews of several mortgages from 2016 in which lenders were required to sign indemnification agreements. The first example consisted of a VA home loan for $102,047, which closed in ...

The Department of Veterans Affairs has issued guidance clarifying its requirements for completing the Interest Rate Reduction Refinance Loan Worksheet. The guidance is effective for all IRRRL applications originated on or after July 2, 2017. The VA said it has received many inquiries from lenders regarding the proper completion of IRRRL Worksheet (VA Form 26-8923) since the implementation of the TRID-LE and CD (Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Loan Estimate and Closing Disclosure.) The guidance clarifies and establishes VA policy regarding the following: Amount of the existing allowable loan balance (Line 1); Principal reduction from veteran (Line 2); Maximum allowable discount points (Line 5); Maximum allowable closing costs (Line 8); Maximum allowable closing costs (Line 11); and Maximum loan amount (Line 18). VA said it understands the ...

PennyMac has announced that, effective immediately, for FHA, VA, Fannie Mae and Freddie Mac transactions, lenders may provide Equifax’s The Work Number verification of employment, or a written VOE from an equivalent income-verification company in lieu of tax transcripts for salaried borrowers. The Work Number is a user-paid VOE database acquired by Equifax in February 2007. The written VOE must have full income figures supporting the qualifying income, said PennyMac. For all loans closed on or after June 15, 2017, the 2016 tax transcript will be required, unless the file contains evidence an extension was filed along with a copy of the Internal Revenue Service notice for 2016 showing “no record of return filed.” For all loans closed on or after Dec. 15, 2017, 2016 tax returns and tax transcripts will be required. PennyMac reminded lenders that its underwriting system cannot respond to ...