Continued abuses has caused single-family loan originations to remain a top priority for reviews and targeted audits, according to the Department of Housing and Urban Development’s Office of the Inspector General. A specialized audit program has been developed to target lenders, considering a number of high-risk indicators, the OIG said. Although the agency did not elaborate, it did note Congress’ keen interest in FHA solvency and in eradicating policies and practices that contribute to the agency’s current financial woes. The OIG said it plans to ...

The real estate industry recommended establishing a new FHA condominium program structure to ease the burden on condo projects seeking FHA certification without posing more risk to the Mutual Mortgage Insurance Fund. Commenting on FHA’s proposal to collect information on the agency’s condominium certification process, a coalition of real estate groups said the current program is too burdensome for condo owners and potential buyers with an FHA-insured mortgage. Comprised of the National Association of Realtors, National Association of Home Builders, Institute of Real Estate Management and the ...

The FHA’s FY 2013 commitment authority for its multifamily programs will run out on Aug. 15, forcing loan applicants to suspend their projects until Congress can approve a new funding commitment for FY 2014. The FHA has informed multifamily, risk share and healthcare program participants that the $25 billion commitment authority allotted by Congress for FY 2013 is nearly gone. The agency said it does not have enough funds for all applications currently in the pipeline. The agency continued to ...

The VA home loan program was up 23.5 percent in the first six months of 2013, although activity slowed by 1.5 percent from the first quarter, according to Inside FHA Lending’s analysis of VA data. The VA reported $74.4 billion in purchase and refinanced loans during the first six months, with refis accounting for 52.9 percent of total volume. The program’s share of the overall mortgage insurance market fell to 22.2 percent in the second quarter from 24.3 percent in the previous quarter. Combining their year-to-date results, the FHA and VA reported a combined ... [1 chart]

HUD Seeks Comment on Proposed Multifamily Rule. The Department of Housing and Urban Development is seeking comment on proposed changes to regulations covering contract rights and obligations of FHA multifamily lenders. When a lender finances multifamily loans through bonds or bond anticipation notes, it uses the FHA insurance claim funds to pay off the remaining bond debts. At times, the claims payments are greater than the remaining bond debts. The proposed rule would require lenders to return to the FHA the excess bond funds that remain after ...

The four private mortgage insurers that survived the housing market collapse reported a combined $38.3 million in net income during the second quarter of 2013, the first positive result for the group since the second quarter of 2007, according to a new Inside Mortgage Finance analysis. Over that time, the four firms racked up a staggering $19.23 billion in losses, watched three competitors go down the drain, cobbled together various regulatory compliance strategies to stay in business and saw a huge chunk of the market get gobbled up by the FHA. But one new entrant gained...[Includes two data charts]

President Obama this week affirmed his view that Fannie Mae and Freddie Mac should be wound down through a “responsible transition” to a new mortgage finance system that preserves the 30-year fixed-rate mortgage while emphasizing private capital. In a highly anticipated speech in Phoenix this week, Obama listed among his key reform principles that private capital should be in a first-loss position and the government should provide an appropriately priced, explicit guaranty to ensure continued access to the 30-year FRM. Those are the major components of the bipartisan reform legislation drafted by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, although the president did not mention the bill by name. Obama also said...

The wrath of Wall Street has descended upon Richmond, CA, after the city council adopted a plan using eminent domain to seize underwater mortgages, as a last resort, and resell them to beleaguered homeowners at a lower price. The American Securitization Forum, the Securities Industry and Financial Markets Association and the Association of Mortgage Investors condemned Richmond’s decision to implement an April 2 agreement with Mortgage Resolution Partners (MRP) to use eminent domain to address the city’s severe foreclosure problem. The city became the first municipality in the country to adopt such an approach, though not the first to consider the idea. Richmond, like many California cities and municipalities, was hit...

The Senate Committee on Banking, Housing and Urban Affairs this week approved bipartisan legislation to strengthen FHA solvency and oversight authority over lenders, paving the way toward dealing with the larger issue of housing finance reform. Introduced by Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, the FHA Solvency Act (S. 1376) passed by a vote of 21-1. The approved bill included...

Fannie Mae, Freddie Mac and their government conservator are all calling on the Consumer Financial Protection Bureau to amend proposed changes to its mortgage servicing rule because certain provisions would inhibit similar servicing goals put forth by the Federal Housing Finance Agency. In a comment letter, the FHFA said its servicing alignment initiative has pushed for improved practices that are similar to the goals of the CFPB rule, but “several provisions in the recently proposed amendments would actually make those goals more difficult to achieve.” The four areas of the CFPB proposal that are especially important cover...