The Department of Veterans Affairs has issued guidance to servicers regarding the use of an auction service in lieu of a foreclosure sale to terminate a VA loan. The goal is to get more from foreclosure-sale proceeds to lower the veteran’s mortgage debt. Mortgage holders may find it better to pursue VA loan termination through an auction service, rather than having to waive a greater amount at foreclosure, the VA said. It also may raise awareness among potential bidders and increase marketability and competition, the agency said. While traditional foreclosure methods have long been a part of the loan termination process, they limit servicers’ chances of obtaining greater proceeds at sale, which are applied to lower the veteran’s debt. Consequently, VA ends up paying more for a claim and assuming the liability of managing and marketing a conveyed real estate-owned property. In addition, state and county ...

Lending to veterans and members of the U.S. military is expected to trend up in the second half of 2015 as the economy improves further, wages rise and unemployment declines, predicts the country’s top VA lender. “We’re seeing increased activity in housing while house values have gone up modestly, which I expect will continue in the next couple of years,” said Stan Middleman, president and chief executive of Freedom Mortgage. It is a great time for veterans to purchase a home, Middleman said, and he would he like to see more vets become homeowners. However, despite the low interest rates, crisp and clear underwriting and no downpayment required, many veterans are still not taking advantage of the VA program as they should, he noted. Middleman feels he should advertise and market the VA product more. In the past seven months, Freedom Mortgage has added ...

Industry experts are sharply divided on whether the FHA’s financial condition is actually getting better or worse. Potomac Partners, a business consultancy group, is optimistic that the FHA’s Mutual Mortgage Insurance Fund has finally turned a corner with great signs of improvement in the first quarter of 2015. Changes and adjustments made by the Department of Housing and Urban Development since last year have placed the MMI Fund on a positive trajectory to reach its required 2.0 percent capital ratio in 2016. Last year, the fund’s capital ratio improved from a negative 0.11 percent to a positive 0.41 percent and its economic value appears to be improving. Potomac Partners’ analysis looked at FHA risk, loan performance, delinquency rates, debt-to-income ratios, loan-to-value ratios, originations and claims, loss rates as well the effect of the ...

The Department of Veterans Affairs has announced measures lenders may employ to provide relief to VA borrowers whose lives and homes were upended by recent severe storms, tornados and flooding in Texas, Oklahoma and Guam. VA mortgage relief would be available to the families of borrowers who died during these natural catastrophes and to borrowers whose homes were badly damaged or destroyed. Relief is also available to those whose work environments were destroyed or severely damaged. Other people have been indirectly affected as well, and the impact may continue to ripple throughout the country, as evacuees travel nationwide to seek support and shelter from family members in unaffected areas, according to the VA. VA encourages holders of guaranteed loans to extend forbearance to distressed borrowers and to provide counseling to them. Lenders are also authorized under VA regulations to reapply prepayments to ...

Private mortgage insurance volume was up sharply in the second quarter, based on a new Inside Mortgage Finance analysis of Fannie Mae and Freddie Mac mortgage-backed securities data. The two government-sponsored enterprises securitized $52.59 billion of single-family loans with private MI coverage during the period. That was up 21.5 percent from the first quarter, and it lifted year-to-date volume 42.4 percent above the level during the first six months of last year. It was...[Includes two data tables]

There is merit to a rule proposed this week by the Department of Housing and Urban Development to establish a maximum filing period for FHA claims, but the penalty for missing the new deadline may be excessive for the offense, according to industry participants. Under the proposed rule, the FHA insurance contract would be terminated if a lender fails to file a claim for a property acquired through foreclosure within three months from the date they obtain marketable title to the property or successfully sell the property to a third party. The requirement applies to both pre-foreclosure sale and deed-in-lieu-of-foreclosure. Although the proposal addresses problems caused by delayed multiple filings, lenders could still submit...

Fannie Mae and Freddie Mac completed 65,960 foreclosure-prevention actions during the first quarter of 2015, a slight increase from the previous period, according to a recently released report from the Federal Housing Finance Agency. Of that number, there was a 1.0 percent uptick in the number of loan modifications in the first quarter. The number of completed repayment and forbearance plans rose somewhat faster, by 7.2 percent and 8.2 percent, respectively. The FHFA said...[Includes one data table]

Residential MBS production continued to gain speed in the second quarter of 2015 while non-mortgage securitization remained strong, according to a new Inside MBS & ABS analysis. A total of $419.42 billion of single-family MBS and non-mortgage ABS were issued during the second quarter, an increase of 21.2 percent from the first three months of the year. It was the strongest new issuance total since the third quarter of 2013 and marked the fifth straight quarterly increase since the market hit a cyclical low at the beginning of last year. Most of the gain came from the agency MBS sector, which totaled $352.73 billion in new issuance, a gain of 29.7 percent from the first quarter. All three agencies posted hefty gains, with the biggest coming at Ginnie Mae, where new issuance jumped 46.7 percent to hit $120.36 billion. A lot of Ginnie’s growth is coming from an unusual surge of refinance activity, which accounted for ... [ charts]

Ginnie Mae securitized $6.6 billion of VA jumbo loans in the first three months of 2015, up 15.9 percent from the prior quarter, according to an Inside FHA/VA Lending analysis of Ginnie Mae data.Jumbo loans – single-family mortgages with loan amounts exceeding $417,000 – comprised 18.7 percent of total VA originations in the first quarter. VA jumbo originations outpaced FHA jumbo production, which totaled $2.8 billion in the first quarter, up 17.0 percent from the prior quarter, according to the Inside Mortgage Finance database. VA jumbos in Ginnie mortgage-backed securities issued in the first quarter included modified VA loans as well as those originated in Alaska, Guam, Hawaii and the U.S. Virgin Islands. Wells Fargo ranked first among securitizers of VA jumbos in the first quarter, with $1.3 billion in production. Second-ranked Freedom Mortgage conveyed $652.7 million in ... [ 1 chart ]

FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]