Mortgage underwriting standards have loosened slightly recently, though nowhere near levels seen during the subprime boom. Federal regulators are concerned that not enough lending is being directed toward borrowers with lower credit scores. In November 2012, the average credit score on newly closed loans was 750, according to Ellie Mae. Average scores have largely declined each month since then, to 742 in April. During that time, credit scores on conventional mortgage originations declined by ...

After increasing for three consecutive months, the first-time homebuyer share of home purchases declined in April, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Industry analysts suggest that the decline of first-time buyers is due to an increase in pricing for FHA mortgages and other changes aimed at reducing the FHA’s market share and losses. First-time homebuyers accounted for 35.8 percent of home purchases in the April HousingPulse survey, based on the three-month moving average, down from a 36.1 percent share the previous month. At the beginning of April, the annual premium for all FHA forward mortgages with a downpayment of less than 5 percent increased by 10 basis points. The upfront mortgage insurance premium also increased 75 basis points to 1.75 percent. Thomas Popik, research director for Campbell Surveys, said...

Shellpoint Acceptance Corp. hopes to come to market with its first non-agency MBS by summer, securitizing not only jumbo loans, but a host of mortgages that fall outside Fannie Mae and Freddie Mac underwriting guidelines for different reasons. According to a recent filing with the Securities and Exchange Commission, the company has committed $2 billion in capital to its shelf registration, though its first deal will be smaller than that. Shellpoint refers...

SunTrust Mortgage is in settlement discussions with the Department of Housing and Urban Development and the Department of Justice over alleged violation of the False Claims Act in connection with the bank’s origination of FHA loans. The Atlanta-based mortgage lender disclosed the ongoing talks in a recent regulatory filing after being notified by the agencies of the results of their preliminary investigation during the first quarter of 2013. Even with the ongoing settlement talks, SunTrust continued to deny any wrongdoing, making clear its disagreement with the government’s analysis and methodology. It gave no further ...

Changes to the FHA’s mortgage insurance premium cancellation policy, which take effect on June 3, could ultimately cause some FHA loans closed after the effective date to become a “higher-priced mortgage loan” that no investor would want to purchase, lenders warned. Eliminating the MIP cancellation and requiring insurance to be kept for the life of the mortgage loan will raise the annual percentage rate 150 basis points above the average prime offer rate (APOR) index. This will trigger a higher-priced mortgage loan (HPML) designation for some ...

FHA lenders now face more stringent default monitoring and reporting requirements as federal housing regulators try to keep close tabs on loan performance to reduce losses to the FHA insurance fund. New guidance issued by the Department of Housing and Urban Development requires FHA lenders to use new status codes in their monthly reporting of delinquent single-family mortgages, special forbearances and trial payment plans. At the same time, HUD announced a new reporting requirement for FHA loan modifications in which the servicer receives no incentives. The requirement to use the new codes and to ...

FHA jumbo loan originations increased in the first quarter of 2013 as well as from the same period last year pending hikes in the mortgage insurance premium and the required downpayment on loans above $625,500, according to Inside FHA Lending’s analysis of FHA data. FHA jumbo lenders produced an estimated $5.44 billion in loans over $417,000 during the first three months of the year, up 6.6 percent from the fourth quarter of 2012 and 14.0 percent higher compared to the volume from a year ago. Consumers continued to use the FHA jumbo product despite FHA’s decision to raise the annual mortgage insurance premiums on ... [2 charts]

FHA loans saw an improvement in delinquencies even as the mortgage industry reported an increase in the overall delinquency rate for single-family mortgages at the end of the first quarter of 2013, according to the Mortgage Bankers Association’s latest national delinquency survey. Among loan types, the FHA saw the largest improvement on a seasonally adjusted basis as its delinquency rate dropped to 10.97 percent in the first quarter, down 20 basis points from the previous quarter. This was good news for an agency that has been battling to reduce losses and stabilize its Mutual Mortgage Insurance Fund. However, the refreshing change was ...

After some rough sailing, the FHA could use a bit of good news. In a recent audit, the Department of Housing and Urban Development’s Office of the Inspector General found that funds held by lenders have adequately reduced FHA’s payments of single-family mortgage insurance claims. Such funds include buydown funds remaining in escrow, unapplied assistance payments, rental income, escrow funds and others. The audit focused on the FHA’s Single Family Claims Branch and was performed in response to concerns that HUD may not have the ...

The Department of Housing and Urban Development’s Office of the Inspector General has announced a second round of mortgage note sales for this year under the expanded Distressed Asset Stabilization Program. Separate sales of approximately 20,000 severely delinquent loans have been scheduled for June 26 and July 10 as part of HUD’s effort to reduce its bulging inventory of foreclosed residential properties and to target relief to areas hit the hardest by foreclosures. HUD estimates the total unpaid balance of the loans in this sale at ...