Refinancing borrowers with negative equity through the FHA Short Refinance Program would result in $24,000 in net benefits per refinanced loan, according to the Department of Housing and Urban Development. In its economic impact analysis, HUD said it expects the program to generate $24.5 billion of aggregate net benefits, assuming one million homeowners with underwater mortgages participated in 2011 through 2013. However, the benefits come with a cost and the process is not that easy. The enhanced FHA refinance program is intended to maintain affordable homeownership, prevent foreclosures and mitigate the potential for strategic defaults. The program drew attention in recent weeks ...

The FHA could be the vehicle of a new refinancing plan offered by Sen. Jeff Merkley, D-OR, to help homeowners who owe more on their mortgage than their homes are now worth. In a proposal called “The 4 Percent Mortgage: Rebuilding American Homeownership,” Merkley explained that his plan will not require taxpayer dollars but would rely on proceeds from the sale of government bonds to investors for funding. The aim, Merkley said, is give underwater homeowners the chance to ...

Total FHA delinquency rates as of June 30 were up for 30-, 60- and 90-day delinquencies as was the foreclosure rate for loans with FHA insurance, an Inside FHA Lending analysis of FHA servicing data found. The latest FHA servicers’ data showed an overall 16.75 percent delinquency rate, up from 16.10 percent as of April 30, the last time we reported FHA delinquency and foreclosure rate trends. Fueling this increase is an uptick in 30-60 days delinquencies, which rose to 7.20 percent from 6.61 percent over the two-month period. At the end of June, serviced FHA-insured loans totaled 7,636,852 loans, of which ... (1 chart)

As the Department of Housing and Urban Development prepares for a planned single-family loan sale in September, questions remain as to how successful the Distressed Asset Stabilization Program will be, given its restrictions and additional certification requirements. Legal experts say that the servicer and investor participation requirements are so onerous that the DASP would seem a little more than a sound bite. The DASP expands an earlier pilot program that allows private investors to purchase pools of nonperforming mortgages at a discount before ...

A much-anticipated Senate vote on the nomination of Carol Galante as FHA commissioner and assistant secretary of housing with the Department of Housing and Urban Development failed to materialize this week, reportedly due to the continuing Republican efforts to block her appointment. Word spread that a vote would take place after Senate Majority Leader Harry Reid, D-NV, and Senate Minority Leader Mitch McConnell, R-KY, last week tentatively agreed to vote on the nomination sometime this week. But that has not happened. Both positions have been vacant since ...

Revised VA HAMP. The Department of Veterans Affairs has updated the instructions for modifying mortgage loans with a VA guarantee. Changes include clarification concerning occupancy status, an updated reference to another VA guidance on prior approval procedures and extension of the applicability of the said guidance. The changes were announced in Circular 26-10-6. New VA REO Management and Servicing Contractor. The Department of Veterans Affairs has provided details for transferring VA property management (real estate-owned) and portfolio loan servicing contracts for the VA home loan guaranty program from ...

The Federal Home Loan Bank system is one of three potential hosts for a proposed new refinance program unveiled this week by a Senate Democrat aimed at rescuing underwater homeowners without direct federal assistance. Oregon Sen. Jeff Merkley’s proposal – spelled out in a white paper titled “The 4% Mortgage: Rebuilding American Homeownership” – would create a temporary government-backed trust to purchase eligible mortgages issued by private lenders. The RAH Trust would be funded by the federal government’s sale of bonds to investors. The plan would allow underwater borrowers who are current on their mortgages to refinance at a lower interest rate.

New home loan originations in the second quarter of 2012 were up 5.2 percent from the first three months of the year, according to a new Inside Mortgage Finance ranking and analysis. Production trends varied significantly among the top lenders, however, and early estimates suggest that lenders further down the food chain may be picking up market share. Wells Fargo is still effectively lapping the field with more than double the origination volume of its nearest rival, but the industry leader managed a relatively modest 0.8 percent increase in production while its three closest competitors all reported double-digit gains. Although Wells may be mothballing some firepower by shutting down its wholesale broker business, the company was...[Includes two data charts]

Officials with the Department of Housing and Urban Development confirmed this week that they are working on ability-to-repay and “qualified mortgage” standards for FHA loans. However, they remained tight-lipped about whether they will craft a QM standard for FHA loans that differs from the Consumer Financial Protection Bureau’s standards, as requested by some lender trade groups. The Dodd-Frank Act requires HUD (for the FHA), the Department of Veterans Affairs, the Department of Agriculture and the Rural Housing Service to develop QM standards for the respective government mortgages that they oversee – in consultation with the CFPB. “Such rules may revise, add to, or subtract from the criteria used...

A surge in securitization of home purchase-money mortgages during the second quarter was not enough to offset a sizable drop in refinance activity during the first three months of the year, according to a new Inside MBS & ABS analysis and ranking. A total of $372.85 billion of agency single-family MBS was issued during the second quarter, down 3.1 percent from the first three months of 2012. Although securitization of purchase mortgages rose 22.4 percent, partly from seasonal factors as well as firming in the housing market, the volume of refinance loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae declined 10.6 percent.Includes two data charts.