The Department of Veterans Affairs is updating its residual-income tables, with an eye to publishing revised guidelines in 2016. The last time the VA calculated and published the residual-income guidelines was in the 1990s, and a lot has changed since then, according to Mike Frueh, director of the VA Home Loan Guaranty program. Residual income is the monthly household income that remains after all primary obligations – mortgage and escrows, car payments, credit card bills, student loans, among others – have been paid. VA will not back a loan to a vet or service member if they do not meet or exceed residual-income requirements. The residual-income threshold varies by family size, borrower location and other compensating factors. Calculations for residual income vary for the Northwest Region, Midwest Region, South Region and West Region of the country. Frueh said they are ...

Beginning June 27, the FHA will require electronic appraisals for single-family forward and reverse mortgages to be delivered through an online electronic submission portal prior to endorsement. The Electronic Appraisal Delivery (EAD) portal is a web-based platform that would allow paperless submissions of single-family home loan appraisals, cutting down loan processing time significantly. FHA lenders and their authorized representatives can access the EAD portal by using electronic credentials and showing they are ready to use the new technology. Only appraisals that are compliant with FHA appraisal and data delivery guidelines can be uploaded to the portal. Lenders will be notified of a successful upload or if they need to correct and resubmit an appraisal. Once an appraisal is successfully submitted to the portal, FHA Connection will pull EAD appraisal data and pre-fill certain data fields in the ...

VA mortgage servicers disputing a final reconveyance decision must submit the information themselves to the Department of Veterans Affairs, not the foreclosure attorney, according to new guidance issued by the agency. The new policy became effective on March 13, 2015, and spells out the process for a servicer to dispute a final reconveyance decision. Reconveyance is the transferring of a clean property title to a buyer after a secured debt, such as a deed of trust or mortgage, has been paid in full. The VA developed a reconveyance dispute process with Vendor Resource Management, a real estate asset management company, to address servicer disagreements pertaining to the reconveyance of an asset. Servicers are now required to complete and submit information regarding reconveyance disputes to VRM via email. Disputes must be received directly from ...

Fannie Mae Updates Reverse Mortgage Loan Servicing Manual. Fannie Mae has updated its reverse mortgage servicing manual with changes and clarifications to policies pertaining to Home Equity Conversion Mortgages. For HECMs, Fannie now requires servicers to place a real estate-owned hazard insurance policy upon completion of a foreclosure sale. It also outlined servicers’ responsibilities regarding the documentation and cancellation of REO hazard insurance claims; reimbursement of REO hazard insurance premiums; and remittance of insurance loss proceeds. The revised policy changes must be implemented no later than April 1, 2015. House Democrats Reintroduce Housing Finance Reform Bill. Democrats on the House Financial Services Committee have introduced legislation that would provide private and government risk-share coverage to all mortgages, create a ...

Department of Housing and Urban Development Secretary Julian Castro has named one of his senior advisors, Ed Golding, as principal deputy assistant secretary temporarily in charge of HUD’s Office of Housing and the FHA. Golding is currently with the Office of Policy Development & Research and will assume his new post April 7. His appointment, however, has raised a few eyebrows on Capitol Hill because it had not gone through formal Senate confirmation, which some lawmakers say could get HUD in hot water. Golding, a former senior economist at Freddie Mac, is replacing...

The percentage of FHA borrowers refinancing their mortgage into another government loan has fallen through the floor the past two years, with all indications pointing to a rule change that prevents mortgage insurance from being cancelled over the life of the loan. Of course, increases in premiums haven’t helped either, but thanks to a January reduction in the annual FHA premium of 50 basis points, at least some of that business is coming back to the agency. “The life-of-the-loan issue is...

Most analysts are confident that private mortgage insurance companies will not see their ratings downgraded due to increased competition from the FHA as well as new capital requirements for private MIs proposed by the Federal Housing Finance Agency. But Zacks Investment Research, a research firm that ranks and rates investment products for investors, went against the grain and downgraded MGIC Investment Corp. by two notches due exactly to those reasons. While private MIs have been gaining market share in the last couple of years, Mortgage Guaranty Insurance Corp. and its business competitors will find...

In efforts to expand mortgage access and get more homeowners in the door, Housing and Urban Development Secretary Julian Castro said the FHA is looking into alternative credit scoring models. Speaking at a credit access symposium at the National Association of Realtors this week in Washington, DC, Castro said, “We want to make it more affordable, realistic and more feasible for folks to become homeowners.” He acknowledged...

The Mortgage Bankers Association took issue this week with two proposals pending before the Basel Committee on Bank Supervision that could have negative repercussions on U.S. mortgage financing and on American homebuyers. Back in December, the Basel Committee put out a “consultative document” that included proposed revisions to its Standardized Approach for credit risk, including updated risk-weight calibrations. As applied to the U.S. ...

Nearly half of the troubled loans that were sold through the FHA’s single-family loan sale program have been resolved, and a significant portion of them are now re-performing, according to an agency report on the Distressed Asset Stabilization Program. Of the 48.6 percent of distressed loans that have been resolved, 43.5 percent have avoided foreclosure, the report said. The single-family loan sale (SFLS) has proven to be a borrower-friendly alternative to the ...