The FHA has proposed to bring its adjustable-rate mortgage (ARM) rules in line with those of the Consumer Financial Protection Bureau to enable FHA lenders to comply with the new servicing requirements under the Truth in Lending Act. Specifically, two proposed changes would align both agencies’ interest-rate adjustment and disclosure-notification regulations for ARM borrowers as required by the revised TILA. The CFPB issued its final TILA servicing rule in February 2013 but delayed the effective date for another year to allow the Department of Housing and Urban Development sufficient time to write rules for new notification requirements for FHA-insured ARMs with a 30-day look-back period. Hence, FHA ARMs must comply with the new TILA rule on or after Jan. 10, 2015. The FHA insures 1-, 3-, 5-, 7- or 10-year ARMs. The CFPB’s revised look-back period and notification requirements would ...

The Department of Housing and Urban Development is planning to auction $4.8 billion of nonperforming single-family mortgage loans in two offerings under the FHA Single Family Loan Sale (SFLS) initiative. The auction – HUD SFLS 2014-2 – will be next month. A national offering of roughly 23,200 loans totaling $4 billion in unpaid principal balance is scheduled for a bid on June 11. The second part of the auction is an offering of 4,800 loans totaling $800 million in UPB in designated geographic areas that are aimed at a neighborhood stabilization outcome or “NSO-targeted” loan pools. Bidding will be on June 25. The eight NSO regions for the June offering are Atlanta, Chicago, Detroit, Miami, Philadelphia, San Antonio, San Bernardino County, CA, and Cumberland County., NJ. SEBA Professional Services, a woman-owned contracting firm, has ...

Only an approved lender-servicer may subservice FHA 203(k) rehabilitation mortgages and their escrow accounts, according to a reminder issued this week by the FHA. The FHA said one of the functions of a servicer of FHA-insured property rehabilitation loan is to service the loan’s escrow account. The same rule applies when servicing is delegated to another party, the agency said. The FHA allows an approved FHA servicer to farm out the work as long as the delegated third party is also agency-approved. HUD regulations state that the lender remain fully responsible for proper servicing and that the subservicer’s actions is also considered to be the actions of the lender. The FHA further reminded lenders of the importance of updating FHA systems with any mortgage record changes as outlined in previous guidance. HUD requires that FHA systems ...

President Obama is expected to announce his intent to nominate Housing and Urban Development Secretary Shaun Donovan as director of the Office of Management and Budget and San Antonio Mayor Julian Castro to replace him. If confirmed by the Senate, Castro would be the second Hispanic after Henry Cisneros to assume the top post at the Department of Housing and Urban Development. Also a former mayor of San Antonio, Cisneros served as HUD secretary during the Clinton administration from 1993 to 1997. Currently in his third term as mayor, Castro is a strong advocate of affordable housing, neighborhood revitalization, inner-city investment and child education and works closely with the San Antonio Housing Authority. San Antonio mortgage bankers said they have had little interaction with Castro, who, they say is “big on housing issues.” “We’re hoping to hear a little bit more about his ...

House buyers are increasingly using mortgage financing when purchasing homes, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The shift has been prompted in part by a decline in the investor share of home purchases. Some 69.9 percent of homes purchased in April were completed with non-cash financing, up from a 69.7 percent share the previous month and 68.5 percent in April 2013, based on three-month moving averages. Tom Popik, research director of Campbell Surveys, said...

During the first quarter of 2014, private mortgage insurance companies may have seen a somewhat bigger decline in new business than their government competitors, but the industry recorded arare achievement in terms of profitability, according to a new Inside Mortgage Finance analysis. For the first time since early 2007, all four of the private MIs that survived the mortgage apocalypse reported a profitable quarter. Mortgage Guaranty Insurance Corp., Radian, United Guaranty and Genworth all finished in the black, with a combined $296 million in income on their domestic MI activities. Different combinations of these four had reported profitable quarters at various times, and the industry as a whole has been profitable since the second quarter of last year. Including Essent Guaranty and National MI, the industry earned...[Includes three data charts]

The Department of Housing and Urban Development this week announced several measures to expand underserved borrowers’ access to credit and to protect the FHA insurance fund, including a new pilot that would qualify borrowers for reduced mortgage insurance premiums through counseling. In remarks to the National Association of Realtors’ Regulatory Forum, HUD Secretary Shaun Donovan unveiled a new “Blueprint for Access,” which echoes plans outlined in the Obama administration’s 2015 budget proposal. Donovan said...

The Department of Veterans Affairs has issued an interim final rule establishing that almost all VA loans that meet current agency underwriting standards will be “safe harbor” qualified mortgages. Certain VA streamlined refinancing will be “rebuttable presumption” QMs instead. Specifically, under the VA rule, safe harbor QMs include all purchase-money mortgage loans and refinances other than certain Interest Rate Reduction Refinance Loans (IRRRLs) guaranteed by the VA. Such a designation would help assure veterans they can still obtain mortgage loans on favorable terms while easing lenders’ fear of liability if they originate VA loans as well as investors’ concern about putting their money in VA loans, the agency said. In addition, the interim final rule confers QM safe harbor status to all VA direct loans, Native American direct loans and vendee loans. The VA QM rule complies with ...

The Department of Veterans Affairs will soon begin looking closely at whether lenders are complying with the agency’s requirement for a quality control plan. Participants at a recent VA lender conference in Houston said officials warned of impending audits of lenders’ quality control regimes as the agency tightens its oversight. All lenders authorized to process VA loans automatically are required to maintain a QC plan and execute it in the course of making VA loans. Lenders were advised to familiarize themselves with VA’s QC plan requirements and be ready when VA scrutinizes the process in future lender-monitoring audits, participants said. This initiative is consistent with VA auditing an increasing percentage of loans to refine its ...

The Department of Housing and Urban Development will soon seek comment on a proposal to extend equal protection to reverse mortgage borrowers and their non-borrowing spouses from displacement due to eviction or foreclosure. The proposed rule would codify the changes to existing Home Equity Conversion Mortgage regulations and make other alternative revisions as appropriate, according to HUD. The FHA expects to publish a notice of proposed rulemaking soon. Currently, the National Housing Act provides for a “safeguard to prevent displacement of the homeowner.” The provision defers repayment of the HECM until the homeowner’s death, the sale of the home, or the occurrence of other events specified in the regulations. Such events include the homeowner’s failure to reside in the property or failure to pay the required taxes and insurance. Without this provision, a reverse mortgage is ...