Revised HUD/VA Addendum to the Uniform Residential Loan Application. On July 30, the FHA has posted on its HUDCLIPS website a revised Addendum to the Uniform Residential Loan Application (Form HUD-92900-A/VA Form 26-1802). This form is used for both FHA and VA mortgage originations.The Department of Veterans Affairs has updated its form to clarify what constitutes a valid marriage for the purpose of obtaining VA benefits. Although the changes to the form do not apply to FHA-insured mortgages specifically, lenders should begin using the revised form for new FHA mortgage originations as soon as possible, the FHA recommended. Processing Request for Execution of VA Quitclaim Deeds. The Department of Veterans Affairs has issued guidance (Circular 26-14-19) for handling of requests for execution of quitclaim deeds. A quitclaim deed is a legal document that is used to transfer a person’s rights to real estate to ...

Homebuyers with less-than-stellar credit as well as those with low income are finding it easier to purchase a house with an FHA mortgage than affluent buyers, according to recent research by an independent housing research and consulting firm. Based on Department of Housing and Urban Development data and interviews with industry executives, researchers at John Burns Real Estate Consulting concluded that ...

The Financial Accounting Standards Board has announced changes to the way it accounts for government-backed mortgage loans upon foreclosure. The change, which is being made through FASB’s rule, “Receivables – Troubled Debt Restructurings by Creditors,” is aimed at reducing diversity in the accounting treatment of FHA and VA loans that have been subject to foreclosure, according to FASB’s Emerging Issues Task Force. The EITF ...

Potential investors in non-agency MBS are calling for significant changes to the market before they’re willing to resume investing in new non-agency MBS. Non-agency MBS issuers indicate that they are willing to make some changes to attract investors, while other adjustments will require action by federal regulators or Congress. In June, the Treasury Department requested comments on how to increase non-agency activity and decrease the agency MBS share of mortgage financing. The comment period closed late last week, with about 25 industry participants submitting feedback. John Gidman, president of the Association of Institutional Investors, said...

Though mortgage securitizers, issuers, lenders and servicers support a proposal to consolidate Ginnie Mae’s two MBS program into a single security, certain specific issues appeared to divide them. In a recent joint letter to Ginnie Mae, the Securities Industry and Financial Markets Association and the Mortgage Bankers Association said many of their members agree on a number of the issues raised by the proposal, but in some cases disagree on the solutions. “It is clear that further discussion is warranted, and direct engagement with key stakeholders should be beneficial,” the trade groups suggested. Both industry groups were responding...

FHA Commissioner Carol Galante has announced plans to step down from her current post, leaving behind a Mutual Mortgage Insurance Fund that appears well on its way to recovery and a slumping FHA business. Industry response to Galante’s Aug. 12 announcement was mixed. Some stakeholders applauded her toughness and resolve in steering FHA through hard times, while others criticized her for policies that made it more difficult and costly for first-time homebuyers to obtain an FHA-insured mortgage loan. Galante’s nearly three-and-a-half year stint as FHA commissioner was highlighted by her efforts to stabilize the FHA’s ailing Mutual Mortgage Insurance Fund, reduce losses and improve lender oversight. She achieved these goals by creating a comprehensive risk-management structure at FHA, revamping FHA pricing and credit policies, and ...

The False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) not only have become strong enforcement tools in the fight against FHA mortgage fraud but also an efficient means of recovering taxpayer losses. Having used both federal statutes effectively to wrangle huge settlements from large banks, federal prosecutors now have their eyes set on mid-level banks, according to compliance experts during a recent webinar hosted by Inside Mortgage Finance Publications. “Because these FCA [and FIRREA] lawsuits have been a cash cow for the Department of Justice and the Inspector General of the Department of Housing and Urban Development, I think these agencies will target mid-level banks next,” said ...

Weighed down by high premium costs and lender overlays, FHA lost more primary market share to private mortgage insurers and the Department of Veterans Affairs during the second quarter of 2014. Although June’s FHA endorsement numbers have not yet been released, the trend seen in April through May, along with Ginnie Mae securitization data, suggest that FHA business was up a modest 11.5 percent from the first quarter. But that increase provides no comfort to FHA, which saw its market share go down to 33.7 percent, a six-year low. From April to May, FHA forward endorsements rose by 2.4 percent to $10.61 billion. On a year-over-year basis, however, endorsements were down from $21.9 billion in May 2013, according to an Inside FHA Lending analysis of agency data. On the other hand, private MI companies reported a total of $44.19 billion of new insurance written (NIW) during the ... [2 charts]

Reverse mortgages would be included in Home Mortgage Disclosure Act reports under a proposed rule published recently by the Consumer Financial Protection Bureau. The proposed rule would expand the definition of a “covered loan” under HMDA to include reverse mortgages and home-equity lines of credit (HELOCs), which include reverse mortgages structured as open-end HELOCs. Currently, HMDA regulations do not require reporting of HELOCs, although lenders may do so if they choose. Currently, financial institutions only have to report information on a closed-end reverse mortgage if the transaction involves a home purchase, home improvement or refinancing. Among other things, the CFPB has proposed to require that all reverse mortgages and HELOCs be identified by loan type to distinguish them from other categories of ...

Private mortgage insurance companies continued their roll during the second quarter of 2014, capturing a larger share of the primary MI market away from the faltering FHA program, according to a new Inside Mortgage Finance analysis. Private MIs reported a total of $44.19 billion of new primary mortgage insurance written during the second quarter, a 38.0 percent jump in new business from the first three months of 2014. Private MIs accounted for 41.4 percent of total primary MI new business, the industry’s highest share of the market since the second quarter of 2008, when the housing market landslide was gaining speed. The Veterans Administration’s home loan guaranty program is also building...[Includes three data charts]