The FHA is decreasing the owner-occupancy rate for approved condominium developments that meet certain requirements, the agency announced recently. Currently, the FHA requires a minimum of 50 percent of the units be occupied by owners. The agency, however, said it would allow a 35 percent owner-occupancy rate if the project meets certain conditions that would make it more financially stable and less of a liability to the Mutual Mortgage Insurance Fund. While having too few owner-occupants could financially weaken a condo project, requiring too many could make...

Investors said that market is in the “sweet spot” when it comes to mortgage credit, while speaking at a symposium in Washington sponsored by the Urban Institute and CoreLogic this week. John Vibert, managing director and co-head of structured products for Prudential, said his company is much more interested in financing nonperforming loans than in owning such assets. “We think...

In the next few weeks, FHA will be releasing an actuarial report to Congress regarding the health of the Mutual Mortgage Insurance Fund that could boost or weaken the argument for another mortgage insurance premium cut. In anticipation of the report, stakeholders this year have reignited the debate, preceded by the Community Home Lenders Association’s call renewing for a reduction in FHA annual premiums down to their pre-crisis level of 0.55 percent. The CHLA said...

The Department of Veterans Affairs is proposing to establish fees for originating and servicing vendee loans. Vendee loans are not veterans’ benefits and are distinct from VA-guaranteed loans, the agency clarified in a proposed rule published in the Oct. 26 Federal Register. Vendee financing is...

With sea levels rising and flood risks increasing, federal housing regulators are proposing new base elevation standards for all properties with an FHA-insured mortgage located in flood hazard areas. Under the Department of Housing and Urban Development’s proposed rule, elevations for “non-critical” properties would be raised two feet above the site’s base flood elevation or 100-year floodplain. The proposed rule also would revise...

VA Announces Five-Digit Builder ID Number. VA Loan Guaranty (LGY) has announced that builder identification numbers are now five digits. Four-digit builder numbers will appear as 0 and four digits (01234). LGY does not approve builders. As such, builders need only register with LGY to obtain an ID number. All five digits must be...

Many industry experts are advising Fannie Mae and Freddie Mac to expand so-called front-end approaches to credit-risk transfers that have so far relied heavily on structured debt notes and reinsurance contracts arranged long after loans are sold to the two government-sponsored enterprises. In a comment letter filed with the Federal Housing Finance Agency, Redwood Trust suggested that “a more robust front-end CRT program [should] at least match the volume of back-end transactions.” Through the end of September, Fannie and Freddie have issued $35.88 billion of back-end debt notes covering $1.223 trillion of single-family mortgages, according to Inside MBS & ABS, an affiliated newsletter. Redwood is...

Fannie Mae this week joined Freddie Mac in announcing a front-end credit-risk transfer pilot that will use additional levels of private mortgage insurance, but the so-called deep MI option looks like a long shot. “Credit-risk transfer is the next big thing, and though we’re already three years into it, it’s still very much a work in progress,” said Donald Layton, Freddie’s CEO, during the annual convention of the Mortgage Bankers Association in Boston this week. “About 50 percent of the credit risk that’s coming in is...

Fannie Mae and Freddie Mac must approve the change of control of Genworth Mortgage Insurance, whose parent company is slated for sale to Asia Pacific Global Capital Co., a Chinese limited liability corporation. The approval, noted one GSE official, is pursuant to the Private Mortgage Insurance Eligibility Requirements, which were sanctioned by the Federal Housing Finance Agency. If Genworth wants to remain an approved MI, the two GSEs have to approve the transaction. Industry observers who keep a close eye on the GSEs believe the sale approval process could be lengthy given the fact that Genworth’s new parent is a Chinese company. The purchase by Asia Pacific was unveiled earlier this week.

The U.S. mortgage market produced an estimated $580.0 billion of first-lien originations during the third quarter of 2016, according to a new Inside Mortgage Finance analysis and ranking. That was up 13.7 percent from the second quarter, and it marked the strongest origination cycle since the fourth quarter of 2012, when $584.0 billion of new loans flowed through the pipes. The robust third quarter brought year-to-date originations to $1.470 trillion, up 8.9 percent from the first nine months of 2015. Lender feedback and agency mortgage-backed securities data suggest...[Includes two data tables]