Industry groups view recently-issued temporary guidelines for approving condominium projects for FHA finance as limited but positive, with the hope that other issues can be addressed in a more comprehensive rulemaking. Announced on Nov. 13, the interim guidelines took effect immediately and will remain for one year to give FHA sufficient time to implement more comprehensive condo rule changes. They include certain changes to the current lengthy and complex ...

Mortgage lenders are more willing to expand the credit box for FHA borrowers, but they appear to be getting more cautious about FHA lending, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. Over two thirds of FHA loans securitized in the first nine months of 2015 had credit scores below 700, and 6.2 percent of them had scores of 620 or lower. By comparison, 47.0 percent of VA loans were below 700 and just 4.4 percent were in the lowest category. But FHA lenders became more cautious as the year wore on. In the first quarter, 6.8 percent of FHA loans had scores of 620 or lower. That fell to just 6.0 percent in the third quarter. The FHA purchase-mortgage sector skews even further away from the riskiest borrowers and toward safer ground. The share of FHA purchase loans with scores of 620 or lower fell from 5.8 percent in the first ... [ 2 charts ]

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...

The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...

Nationstar Mortgage is looking to enhance its FHA and VA lending and increase the recapture rate for the two loan products, according to the company’s top executives. In its third-quarter earnings call, Nationstar CEO Jay Bray told analysts the company has initiated targeted marketing efforts for refinancing opportunities for FHA and VA borrowers. In the third quarter, Nationstar’s overall origination segment increased funding to nearly $5 billion and raised its recapture to 28 percent. The company has reported profitability for five consecutive quarters and posted $50 million in earnings. Servicing profitability improved for the third quarter to 3.6 basis points, a 57 percent improvement from the prior quarter. In addition, the company generated strong cash flows of $172 million during the period. Ranked 17th among the top FHA lenders in the third quarter, Nationstar originated ...

The Department of Veterans Affairs has issued a policy clarifying how VA lenders should process and underwrite mortgage loan applications when borrowers assert they are married. The policy, which took effect immediately, requires lenders to accept a veteran’s assertion of spousal status when he or she is applying for VA home loan benefits. The policy came a few months after the U.S. Supreme Court held, in Obergefell v. Hodges, that the Fourteenth Amendment of the U.S. Constitution requires a state to issue a license for same-sex marriages and to recognize as valid and legal such marriages performed out of state. The SCOTUS decision opened the door for VA to recognize all same-sex marriages regardless of a veteran’s state of residence. The policy also directs VA personnel to apply the same level of scrutiny to all veteran marriages, regardless of whether they are ...

The population of young veterans in the U.S. military could surge to one million over the next five years and likely lead to a boom in VA loan originations, according to a new Deutsche Bank analysis. Citing data from the U.S. Census Bureau, the analysts said there are an estimated 21.8 million veterans residing in the U.S and that number has held steady since 2013. The analysts further observed a shrinking in the mortality rate of veterans as more troops returned home from overseas in recent years. That contention is supported by the fact that the number of young vets has risen while the older 35- to 64-year-old bucket has shrunk, the analysts said. “The population of younger veterans is expected to continue growing,” they predicted. “This means the number of prospective new homebuyers taking out a VA loan is likely to increase.” As of 2014, there were roughly ...

FHA to Unveil FY 2015 MMIF Audit Results. On Nov. 16, the FHA will release its 2015 annual report to Congress, a document that historically has included the results of the annual actuarial audit of the Mutual Mortgage Insurance Fund, or MMIF. Early in the day, Ed Golding, principal deputy assistant secretary for the Department of Housing and Urban Development’s Office of Housing, is scheduled to brief reporters on the report and take questions. As reported by Inside FHA/VA Lending, the reduction in the annual mortgage insurance premium earlier this year has put the MMIF on an accelerated path to recovery. But whether the ensuing increase in FHA production – which translates into additional premiums – will be enough to get the fund back to its statutory 2 percent capital reserve ratio remains ...

The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...

The FHA has issued temporary guidelines to ease the condominium approval process and increase the number of condo projects eligible for FHA financing. The guidelines take effect immediately and will be in place for one year to give FHA enough time to write and implement a more comprehensive rule. With the issuance of the guidelines, FHA anticipates an increase in the pool of FHA-eligible condo projects, which in turn will provide more affordable housing options for first-time and low- to moderate-income borrowers. The interim guidelines modify three key areas where lender complaints have been common. First, the guidelines revise requirements for recertification of condo projects. FHA-approved condo projects require recertification after two years to ensure that the project is still in ...