Private mortgage insurers have been making a slow comeback and reclaiming market share, thanks in part to policy changes adopted by the FHA, according to MI industry executives. Executives say MI penetration of the market has grown from 2.8 percent in the first quarter of 2012 to anywhere between 8-10 percent in the third quarter, an increase they attributed in part to gaining market share from FHA. Currently, private MI companies account for approximately one-third of loans with loan-to-value ratios of 80 percent or more, which are also ...

FHA Loan Delinquencies Drop in 3Q. The number of delinquent loans with FHA insurance has dropped 75 basis points to 11.14 percent in the third quarter of 2012 from the previous quarter, according to the Mortgage Bankers Association’s latest delinquency and foreclosure rates survey. Foreclosure starts and the percentage of loans in foreclosure fell after a spike in the second quarter when some larger servicers restarted the foreclosure process after being stalled for more than a year by the “robo-signing” investigations and subsequent negotiations. Both rates, however, remain ...

Private mortgage insurers posted an impressive 26.5 percent increase in new insurance written during the third quarter of 2012, but four of the industry’s six active firms are gradually taking market share away from their rivals. Private MIs insured $51.76 billion in new mortgage originations during the third quarter, according to a new Inside Mortgage Finance ranking and analysis, making it the strongest quarter for the beleaguered industry since the second quarter of 2008. FHA and VA lending grew at a much slower pace, climbing just 2.1 percent and 4.0 percent, respectively, during the third quarter. The result was...[Includes two data charts]

The private mortgage insurance industry is expressing optimism with the positive changes seen lately in the housing market while hoping that Congress or the Obama administration do nothing to impede or spoil the market’s recovery. Industry executives say stabilizing home values, low interest rates, better quality mortgages and a shrinking FHA share of the mortgage market are helping MIs win back market share and write new business. “Everybody is trying to write as much business as they can to regain share,” said Michael Zimmerman, senior vice president for investor relations at Mortgage Guarany Insurance Corp. New insurance written is...

Although mortgage market watchers cautiously expect President Obama and the lame-duck session of the 112th Congress to come up with at least a stop-gap deal to avoid the looming “fiscal cliff” at year’s end, building uncertainty among homeowners and potential borrowers as to whether important mortgage tax deductions will exist in 2013 threatens to thwart housing’s fragile recovery. Unless Congress and the president create and sign new legislation to change existing law before Jan. 1, 2013, taxpayers are poised to be hit with a massive combination of expiring tax breaks, tax hikes and deep, automatic federal spending cuts. A report last week by the Congressional Budget Office concluded that a failure to avoid the cliff would push the economy back into recession with the unemployment rate shooting up to 9.1 percent by next fall. Fitch Ratings warns...

Wells Fargo has asked a federal district court in Washington, DC, to declare the U.S. government in violation of the terms of the landmark $25 billion mortgage servicing fraud settlement earlier this year that resolved federal and state claims against the bank and four other major servicers for alleged servicing malpractices. In a complaint filed last week, Wells Fargo also asked the D.C. court to order the Department of Justice to halt all legal actions seeking to impose additional liability on Wells Fargo based on a ...

There is substantial risk that the FHA may end up with a negative net worth, which would require congressional appropriations for the mortgage insurance fund and passage of legislation reforming the FHA, said a former top official at the Department of Housing and Urban Development. In remarks this week at the Urban Institute, John Weicher, former assistant secretary for housing and FHA commissioner in 2001-2005, said it is very unlikely in this weak economic recovery to see ...

The volume of loans guaranteed by the Department of Veterans Affairs rose 4.0 percent in the third quarter of 2012, reflecting an upward trend that the agency attributes to strong underwriting. A production increased to $33.3 billion from $32.0 billion in the second quarter and $28.3 billion in the first quarter. The agency reported $93.6 billion in total originations over the nine-month period, with refinancing accounting for 51.8 percent of guaranteed loans. “VA has had the best performing loans in the industry for quite some time, with the ... [1 chart]

Banks that say they were less likely to approve an application for an FHA-insured mortgage cited a higher risk of putback of delinquent mortgages by the FHA as an important reason for the change, according to the Federal Reserve’s latest survey of bank lending practices. Responding to a special question on FHA lending, 14 of the respondents (36.8 percent) ranked putbacks as a “very important” issue, nine banks (23.7 percent) thought it was the “most important” while an equal number said it was “somewhat important.” Nine of the 14 respondents were ...

A second-term Obama administration is expected to continue support for lowering maximum loan-to-value ratios and upward premium pricing to strengthen the FHA’s Mutual Mortgage Insurance Fund, according to the Mortgage Bankers Association. While President Obama has indicated an interest in reducing the FHA’s presence in the mortgage market for a larger private sector role in mortgage finance, he is inclined to proceed cautiously so as not to disrupt consumer access to affordable FHA financing, said MBA President/CEO David Stevens. Stevens observed that Obama has been ...