An adverse independent actuarial report on the FHA’s Mutual Mortgage Insurance Fund would set off another round of debate on higher downpayments, tighter credit and increased insurance premiums, along with dire warnings from lawmakers about a potential FHA taxpayer bailout, according to the Mortgage Bankers Association and other industry observers. The annual FHA actuarial review is expected to be released next week and reportedly has troubling news about the state of the MMI Fund, particularly its capital reserve ratio. The strength of the MMI Fund is conveyed through this capital reserve ratio, which has fallen far below its statutory mandate of 2 percent but has still remained positive in the past three annual actuarial reports. The Department of Housing and Urban Development reassured...

In the past four years, Ocwen Financial has gone from the 24th-largest residential mortgage servicer with a declining portfolio of distressed mortgages to, on paper, the fifth largest servicer with a portfolio increasing in volume and product type. The growth of the nonbank has involved unique tactics, including a reliance on offshore employees and tax structures. Ocwen handled a $121.8 billion portfolio as of the end of the third quarter, including subservicing, but pending acquisitions of servicing from Residential Capital and Homeward Residential, will push that to $361.7 billion. And Ocwen is...

Mortgage lenders reported solid increases in loan originations during the third quarter of 2012, leading to a surge in securitization activity at Fannie Mae and Freddie Mac. Single-family mortgage originations totaled $475.0 billion during the third quarter, according to a new Inside Mortgage Finance analysis. That was up 9.2 percent from the second quarter of the year and marked the highest quarterly origination volume since the end of 2010, when an earlier refi surge pushed production to $520.0 billion. The strong third quarter suggests...[Includes two data charts]

The use of conventional conforming mortgages in the home purchase market, which fell to the lowest level in more than a decade last year, is staging a comeback in 2012. A combination of events – particularly increased home buying by higher-income current homeowners and more attractive pricing for higher loan-to-value ratio conventional financing – appears to be fueling the growth. Perhaps the most visible sign of the growth in the conventional side of the home purchase market can be found in Fannie Mae’s and Freddie Mac’s latest mortgage activity numbers. According to data compiled by Inside Mortgage Finance, the combined home purchase mortgage business of Fannie and Freddie climbed to $77.6 billion in the third quarter of this year. That was not only up 33.6 percent from the second quarter’s volume, but put...

The Department of Justice’s recent civil lawsuit against Bank of America/Countrywide over allegedly defective loans sold to Fannie Mae and Freddie Mac is a clear sign of the government’s more aggressive use of the False Claims Act and the 1989 thrift bailout law to target not only participants in government loan programs but any lender who sold loans to the government-sponsored enterprises, according to industry lawyers. Filed last week by the U.S. Attorney for the Southern District of New York, the suit is another example of the government’s increasingly aggressive effort to recoup taxpayer losses from the financial meltdown and to remind potential violators of the significant whistleblower provisions in the FCA and the Financial, Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), noted the Washington, DC, law firm BuckleySandler. The DOJ is following...

FHA loan originations, driven largely by streamline refinancing, increased 5.3 percent to $60.9 billion in the third quarter of this year, the highest level it has been in almost two years, according to Inside FHA Lending’s latest analysis of FHA data. The third-quarter volume reflected an upward trend that began in the first quarter with nearly $48.5 billion in total FHA single-family production and which later rose to $57.8 billion in the second quarter. The last highest point in FHA production was in the fourth quarter of 2010 when ... (2 charts)

New pool level data issued by Ginnie Mae reveal a rising share of FHA-insured loans that have refinanced with grandfathered mortgage insurance premiums (MIP) in new Ginnie Mae mortgage-backed securities issuances, according to analysts. Of particular interest to investors is the share of borrowers with existing FHA-insured home loans who took advantage of an opportunity to refinance on advantageous terms under the FHA Streamline Refinance program, said analysts at Bank of America Merrill Lynch. Under the revised rules of the FHA Streamline Refi program, FHA-insured mortgages endorsed before June 1, 2009, were ...

The Department of Housing and Urban Development is mulling a recommendation by its Inspector General to consider indemnifications, civil fines or remedies under the False Claims Act against an approved California lender for allowing the recording of restrictive covenants that put the FHA insurance fund at risk for losses. The IG audit report also recommended that HUD require the lender, Shea Mortgage of Aliso Viejo, CA, to reimburse the FHA for $1.47 million in claims paid on 11 FHA-insured loans that contained prohibited restrictive covenants. Under HUD rules, any recorded agreement between the ...

A weakened mortgage revenue bond market and the unreliability of its primary and pool credit enhancement structure has prompted the Wisconsin Housing and Economic Development Agency to turn to FHA and Ginnie Mae to finance its affordable housing program. Launched in December last year, WHEDA’s $100 million FHA Advantage program is still in its infancy, generating less than $1 million a month. Although marketing has not been aggressive as it should be, Geoff Cooper, WHEDA director of single-family operations, said the housing finance agency will soon announce ...

Legislation that would delay foreclosures on mortgages of certain military servicemembers, retirees and surviving spouses of soldiers and sailors who died on active duty would cost taxpayers more to enact and implement rather than as a revenue raiser, according to Congressional Budget Office. The CBO estimates that enacting S. 3322, the Servicemembers’ Protection Act of 2012, would increase direct spending by $16 million over the 2013-2022 period. Implementing it would hike discretionary costs by ...