The FHA Single-Family Policy Handbook’s effective date has been changed from June 15 to Sept. 14, 2015, the agency has announced. The affected sections include the following: Doing Business with FHA – Lenders and Mortgagees; Doing Business with FHA – Other Participants – Appraiser; and Quality Control, Oversight and Compliance. The section for Origination through Post Closing/Endorsement (OTPC/E) becomes effective for FHA case numbers assigned on or after Sept. 14. All applicable existing single-family handbooks, mortgagee letters and policy documents continue to apply until the OTPC/E section becomes effective, the agency said. A number of competing initiatives prompted the change of effective date. The FHA expects lenders to be fully compliant by Sept. 14. The FHA will continue to issue mortgagee letters periodically to ...

Sen. Chuck Grassley, R-IA, chairman of the Senate Committee on the Judiciary, has asked the Department of Housing and Urban Development to explain the duties and functions of two officials who were appointed as “principal deputy assistant secretary.” The appointments make it appear that HUD is deliberately circumventing the nomination process by creating new official titles for appointees without obtaining Senate confirmation, said Grassley. If that is the case, HUD Secretary Julian Castro may be in violation of the Vacancies Reform Act of 1998, the lawmaker warned. The statute provides several mechanisms to fill job positions that require candidates to be nominated by the President with the advice and consent of the Senate. “The Vacancies Act also declares that those mechanisms are the exclusive means of filling vacancies,” Grassley said. “Creating new job titles is not ...

The Department of Veterans Affairs has found a defect in “transfer of custody” (TOC) processing, wherein TOC reports are being rejected when submitted to the agency. The reports are not being accepted apparently because servicers are not filling out the “Date of Confirmation/Ratification of Sale” fields, the agency said. Servicers have 15 days after loan termination to report if they want to transfer custody of a foreclosed property to the VA. Loan termination for a foreclosure and loan termination for a deed-in-lieu of foreclosure are defined separately under VA rules. The VA said the defect will be fixed once the agency’s VALERI (VA Loan Electronic Reporting Interface) Manifest 3.4 is released in June. VALERI 3.4 comes in the wake of VALERI 3.3, which the VA deployed on April 11, 2015. The updated version included a revised description of a ...

The FHA has automated the delivery of notices to targeted lenders that receive an “unacceptable” rating following a post-endorsement review of a sample of their FHA-insured mortgage loans. The agency’s notification process shifted from manual to electronic effective on April 27, with the deployment of a new automated system for delivering notices of unacceptable findings, or eFindings letter. The change speeds up the process of determining whether a direct-endorsement lender should be subject to an indemnification request from FHA because of faulty underwriting. The enhanced delivery process will make it easier for lenders to do business with the FHA, the agency said. The post-endorsement audit is crucial to the success of the FHA’s direct-endorsement program. The FHA performs a post-endorsement technical review (PETR) on selected cases to evaluate the risk loans pose to ...

The reduced capital requirements for certain vintage mortgages under recently issued financial standards for private mortgage insurers might embolden MI companies to step up competition with the FHA, according to a new Barclays Research analysis. Such a move, however, would be bad for private MIs at this time, Barclays analysts warned. Buoyed by the changes in the final Private Mortgage Insurer Eligibility Requirements (PMIERs), MI firms could attempt to steal away market share from FHA by going after the agency’s traditional base, the lower-FICO borrower segment. “Such a move would entail significantly more credit risk, something the MI companies may not be comfortable with just a few years after the recent housing downturn,” said analysts. In addition, analysts estimated that return-on-equity after taxes on the lower FICO cohorts are already below the MI’s targeted ...

Mortgage lenders originated an estimated $360.0 billion of first-lien home loans during the first three months of 2015, lifting the market to its strongest quarterly volume since the third quarter of 2013, according to a new Inside Mortgage Finance analysis and ranking. The first-quarter total originations estimate does not include home-equity lending, which many lenders consider a separate business from traditional mortgage lending. In the past, Inside Mortgage Finance included home-equity in total originations, and those market estimates are not being revised. In 2014, about 5.7 percent of total originations ($71.0 billion) were home-equity loans. A number of survey participants have reported...[Includes two data charts]

Quicken Loans said it will be evaluating whether it should continue participating in the FHA single-family mortgage insurance program after the federal government formally accused the lender of improperly originating and underwriting mortgages that cost the FHA losses in paid claims. The Detroit-based mortgage lender two weeks ago took the unprecedented step of filing a lawsuit against the government for alleged harassment in what it deemed a long-running fishing trip to drum up charges against the company. Last week, the empire struck back. The Department of Justice filed...

The Federal Housing Finance Agency announced new changes to private mortgage insurer eligibility rules on April 17 and the GSEs said the revisions will play a role in helping to reduce the risk to taxpayers by making sure the MIs are financially and operationally strong. During the financial crisis, some MIs couldn’t fully pay their claims, resulting in losses to the GSEs and taxpayers. The FHFA hopes the revised requirements will help lessen the chances of falling back into the same boat should there be another crisis. United Guaranty, the highest-rated GSE-approved mortgage insurer, said PMIER revisions are “a critical and necessary step that will allow the entire mortgage insurance industry to move forward by incorporating lessons learned during the financial crisis.”

In an ongoing attempt to offer lenders more clarity and reduce buybacks, Fannie Mae has taken its new Collateral Underwriter program to the next phase and integrated it with other loan-processing systems.After introducing Collateral Underwriter in January, Fannie announced on April 20 that it incorporated the tool with Desktop Underwriter, an automated underwriting system, and Early Check, the company’s pre-delivery loan eligibility and data evaluation tool. The GSE said this will provide a better view of risk on a loan across multiple applications, allowing lenders to address potential issues prior to loan delivery. CU, Fannie’s proprietary appraisal analysis application that gives lenders access to analytics, public records and other data when...

The Federal Housing Finance Agency late last week announced a few changes to new private mortgage insurer eligibility rules that were first proposed in July 2014, and the private MI industry appears mostly ready for them. “The new PMIERs are really designed to promote the counterparty strength of private mortgage insurers. We feel like this will strengthen the industry,” said Gina Haly, Freddie Mac’s vice president in the mortgage insurance and risk transfer counterparty credit division. During the financial crisis, some MIs couldn’t fully pay...