Approximately 11.5 percent of FHA single-family mortgages were in some stages of delinquency in July, 26 basis points down from the previous month, according to an Inside FHA/VA Lending analysis of FHA delinquency rates. At the end of July, FHA servicers were servicing 7,901,090 FHA loans, with top servicer Wells Fargo accounting for 19.2 percent. The share of FHA mortgages that were 30-59 days past due, which is considered early-stage delinquency, was 4.8 percent at the end of July. The share of FHA loans 60-89 days delinquent was 1.6 percent while the share of seriously delinquent loans in July was 4.02 percent. ... [Chart]

The FHA has revised the order of loss-mitigation options for FHA borrowers whose properties or jobs are located in hurricane-ravaged areas in Puerto Rico and the U.S. Virgin Islands. Under the revised policy, FHA is allowing lenders to evaluate borrowers in the affected areas first for the “disaster stand-alone partial claim” before the disaster loan modification. The agency believes this change will enable more affected borrowers to get into a permanent loss-mitigation solution and keep their mortgage in good standing. The policy specifically allows borrowers to maintain their pre-disaster monthly principal and interest payment and retain their current interest rate and term of the FHA-insured mortgage. In addition, the policy provides for the repayment of arrearages with a subordinate mortgage lien that is not repaid until the maturity of the FHA loan, the sale of the property, or the payoff of the loan, or non-FHA refinancing ...

Buoyed by a surge in new business written and profitability, private mortgage insurers outpaced government-backed mortgage insurance programs in the second quarter of 2018. The six active private MIs wrote primary insurance on $80.3 billion of newly originated home loans during the second quarter, up 37.5 percent from the previous quarter and represented the industry’s best results since the fourth quarter of 2007. At the end of the second quarter, private MIs accounted for 38.7 percent of the primary MI market. FHA and VA saw their shares fall slightly to 34.8 percent and 24.5 percent, respectively. Private MIs saw increased activity in the purchase-mortgage business with the six firms combining for $75.7 billion of new purchase mortgages during the second quarter, up 47.3 percent from the first three months of the year. FHA purchase-mortgage business was also up by 33.0 percent during the ...

An undetermined defect is causing the Department of Veterans Affairs’ loan servicing reporting system to spit out duplicate bill-of-collection transaction numbers. The VA Home Loan Guaranty staff is collaborating with the Administrative Loan and Accounting Center (ALAC) to work around the issue. The resolution to correct the defect in the VA Loan Electronic Reporting Interface (VALERI) application is scheduled to be included in the 18.4 VALERI release on Dec. 8, 2018. VALERI is in the first phase of a three-year project to convert from a system for reporting and storing servicing data to an end-to-end mortgage-processing platform. The VA also has issued a number of servicing alerts and reminders. Liquidation appraisal fees in Colorado will increase in certain counties effective Sept. 1, 2018, so that all counties will have the same fee per property type. The fee changes will be updated and reflected on the ...

Michael Bright Clears First Hurdle to Becoming President of GNMA. The Senate Committee on Banking, Housing and Urban Affairs this week voted to confirm Michael Bright as president of Ginnie Mae. Bright’s confirmation is broadly positive for housing, said Jaret Seiberg, financial services and housing policy analyst for Cowen Washington Research Group. Bright is a former staffer for Sen. Bob Corker, R-TN, and has a history of working well with Republicans and Democrats, said Seiberg. In addition, he has worked closely with Sen. Elizabeth Warren in cracking down on loan churning, he added. The Mortgage Bankers Association welcomed the news. “Mr. Bright would bring significant experience within the mortgage industry and on Capitol Hill to the role of Ginnie Mae president,” said Bill Kilmer, the group’s chief lobbyist. “He has demonstrated a commitment to bipartisan solutions regarding complex ...

The Mortgage Bankers Association called upon Congress to pass legislation to restore Ginnie Mae eligibility for so-called orphaned VA loans, which have caused a temporary disruption in the government-backed secondary market. In written testimony to the Senate Committee on Veterans’ Affairs last week, the MBA urged lawmakers to make technical corrections to restore the eligibility of certain Interest Rate Reduction Refinance Loans for pooling. The MBA estimated the VA orphan loan mess at roughly $500 million. Due to new loan seasoning requirements in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, sime IRRRLs were rendered ineligible for Ginnie MBS pools. The loans were in transit when legislation addressing the problem of VA loan churning and serial refinancing became law in May. The new law’s seasoning provisions turned out to be ...

A Treasury Department report called on the Department of Housing and Urban Development to establish clear standards for determining which mortgage-related violations and loan defects the Department of Justice should pursue under the False Claims Act. The report also recommended that DOJ ensure that materiality, for purposes of the FCA, is linked to the standards of the agency administering the program to which the claim has been filed. Furthermore, it urged both HUD and the DOJ to work together to clarify the process by which they can jointly resolve claims. The report was issued pursuant to President Trump’s February 2017 executive order establishing his administration’s policy to regulate the U.S. financial system according to a set of core principles. Both HUD and the DOJ have been successful in using the statute to prosecute FHA lenders who knowingly commit fraud or make ...

On Aug. 1, the U.S. Senate voted 92-6 to pass a four-bill appropriations package that includes FY 2019 funding for the Department of Housing and Urban Development and the U.S. Department of Agriculture housing programs. The bill passed without changes to program funding levels previously approved by Senate appropriators. The House Appropriations Committee has approved FY19 spending bills for both HUD and USDA. The full House, which is away for the summer break until Sept. 4, has not yet voted on the package. The Senate bill retains the previous fiscal year’s $400 billion in new loan commitments in the FHA Mutual Mortgage Insurance Fund and $30 billion for the general insurance and special risk insurance program, which include special purpose single- and multifamily loans, multifamily rental housing and condominiums. The bill also sets aside $550 billion for Ginnie Mae ...

VA home-loan guarantee volume rose in the first half of 2018 thanks to a second-quarter surge in purchase business. New VA loan guarantees totaled $89.9 billion at midyear, a 7.5 percent improvement from the same point last year. VA production was even stronger quarter-over-quarter, with $50.9 billion in originations, up a whopping 30.2 percent from the first quarter. Purchase loans accounted for 68.1 percent of VA guarantees in the second quarter, up 23.1 percent from the prior quarter. Purchase for the first six months of 2018 was up 19.5 percent from a year ago. VA refi business struggled in the second quarter as production fell 7.0 percent from the previous period, dropping the overall refi share to 31.9 percent. Most of the damage in VA production in the second quarter was in the Interest Rate Reduction Refinance Loan program, where volume tumbled 42.8 percent from the previous ... [Chart]

A legislative proposal to charge veterans, servicemembers and military spouses more for a VA home loan is getting heat from lenders and the Department of Veterans Affairs itself. Testifying before the Senate Committee on Veterans Affairs last week, Paul Lawrence, VA undersecretary for benefits, warned that increasing VA loan fees would impose additional financial burdens on veterans who are trying to buy a home, making them more vulnerable to predatory lending. Fee-related proposals are included in H.R. 299, the Blue Water Navy Vietnam Veterans Act of 2017. The House of Representatives passed the bill by a vote of 382-0 in June and it is currently under consideration in the Senate. H.R. 229 would expand disability benefits to Vietnam veterans who were exposed to Agent Orange while serving on U.S. ships offshore or on the ground in Thailand and the Korean demilitarized ...