The Department of Housing and Urban Development’s inspector general urged the agency to revise regulations to avoid the possibility of another multi-billion dollar hit to the FHA insurance fund due to servicers missing their foreclosure or conveyance deadlines. According to a recent IG audit report, HUD paid approximately $2.23 billion in claims for an estimated 239,000 properties that missed foreclosure and conveyance deadlines. In particular, HUD paid an estimated $141.9 million for servicers’ claims for “unreasonable and unnecessary” debenture interest as well as $2.09 billion in servicer claims for holding costs incurred after the deadlines for foreclosure or conveyance had lapsed, the report said. Because of these exorbitant claims payments, the FHA’s Mutual Mortgage Insurance Fund became...

With Hispanics predicted to make up more than half of all new households formed between 2020 and 2030, their relatively low homeownership rate should be a growing concern in the mortgage market, according to the Urban Institute. In 2013, just 45 percent of Hispanic households owned their homes compared with 71 percent of whites, said UI researchers Jim Parrott and Yamillet Payano. “If one were to hold those rates constant as Hispanics become an increasing percentage of the pool of homebuyers, the homeownership rate would drop precipitously, causing considerable economic upheaval,” they said. Credit score is...

Given that the mortgage servicing industry seems far removed from where it was when the housing crisis peaked, what will become of default servicing in the years to come? For one thing, a certain amount of delinquency will always exist in the housing market, according to a new white paper from the Five Star Institute, which drew together research, insight and commentary from a host of industry resources and experts. “For all the loans that are out there, there will always be...

Private mortgage insurers are quietly gaining ground on their government-insured rivals in the critical home-purchase market, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. Fannie Mae and Freddie Mac securitized $61.47 billion of purchase mortgages with private MI coverage during the third quarter, a gain of 33.4 percent from the previous period. At the same time, Ginnie Mae securitized $79.91 billion of FHA and VA purchase mortgages, up 19.3 percent from the second quarter. The private MI share of agency purchase loans rose...[Includes two data tables]

Trends in the agency mortgage-backed securities market suggest that private mortgage insurers may have gained some market share from government MI programs during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized a total of $75.89 billion of insured single-family mortgages during the third quarter, an increase of 29.5 percent from the previous period. That was a tad below the 29.7 percent increase in overall MBS production by the two government-sponsored enterprises, but it kept the private MI share at 26.8 percent for the third quarter. Meanwhile, the booming Ginnie Mae market showed...[Includes two data tables]

Recent data on the state of the FHA’s Mutual Mortgage Insurance Fund and program financials suggest that the annual audit will show solid improvement in the government’s 2016 fiscal year, which ended Sept. 30. But there are some huge variables that could have a major impact on the final results that won’t be known until the annual audit is released late next month. The MMIF ended...

Two FHA lenders in Utah have agreed to pay the federal government a total of $9.25 million to resolve allegations they violated the False Claims Act in connection with badly underwritten FHA-insured loans that later resulted in losses to the FHA insurance fund. Primary Residential Mortgage Inc. (PRMI) and SecurityNational Mortgage Co. became the latest statistics in the government’s effort to prosecute lenders whose practices result in losses to the FHA insurance fund. The two lenders have agreed separately to $5.0 million and $4.25 million settlements, respectively, without admitting to any fault or liability for the failed loans. In separate complaints, the Department of Justice accused...

Ginnie Mae set new monthly and quarterly production records during the third quarter of 2016, leading the agency MBS market to a huge 24.6 percent increase in new issuance, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies produced $428.36 billion in new single-family MBS during the third quarter. Fannie Mae and Freddie Mac actually had bigger increases from the second quarter, but Ginnie was the star of the show. Ginnie recorded...[Includes two data tables]

Ginnie Mae rode a surging purchase-mortgage market and heavy refinance activity to new production records during the third quarter of 2016. The agency issued a whopping $145.14 billion of single-family mortgage-backed securities during the third quarter, according to an Inside FHA/VA Lending analysis of MBS disclosures. That figure is based on pool-level disclosures that reveal exact principal balance amounts and it includes securities backed by FHA home-equity conversion mortgages. The data in the table below are based on truncated loan-level disclosures and do not include HECM activity. New Ginnie MBS issuance in the third quarter was up 15.7 percent from the previous quarter. Ginnie MBS production set three consecutive monthly records during the third quarter, culminating in a huge $52.46 billion month in September. Purchase-mortgage activity was the key driver, but the ... [ 4 charts ]

Requiring an undercapitalized issuer to repurchase uninsured performing mortgages out of a mortgage-backed securities pool could increase risk to the federal government, warned Ginnie Mae. Responding to an adverse audit report from the Department of Housing and Urban Development’s Office of the Inspector General, Ginnie said that while it generally accepts the IG’s recommendations, forcing an undercapitalized issuer to buy out performing loans and either hold them in portfolio or sell them at a substantial loss would put the government at greater risk. “This is something we need to be alert to in certain cases,” the agency said. According to the report, Ginnie improperly allowed more than $49 million of single-family mortgages with terminated insurance to remain in its MBS pools for more than one year without obtaining FHA coverage. The IG warned Ginnie could be on the ...