Securitized FHA,VA and rural housing loans in Ginnie Mae mortgage-backed securities totaled $188.5 billion in the first six months of 2015, fueled by significant purchase and refinance activity, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. An estimated $113.4 billion in FHA-insured mortgages were securitized during the first half of the year. Of that total, $60.6 billion were purchase mortgages and $44.2 billion were refinance loans. FHA purchase-loan production increased 58.8 percent in the second quarter from the prior quarter while refi lending jumped 160.8 percent over the same period as FHA’s reduced annual mortgage insurance premium began to take hold. The FHA loans that went into Ginnie MBS showed an average loan-to-value ratio of 92.8 percent and an average debt-to-income ratio of 39.7 percent. Borrowers’ average FICO score was 675.9, which was indicative of ... [ 2 charts ]

An FHA proposal to establish a deadline for filing insurance claims and revise existing policies that allow punitive penalties for missing FHA foreclosure deadlines could have a chilling effect on FHA lending and servicing, analysts warned. Housing policy analysts and industry attorneys say the two-part proposal issued on July 6 raises red flags for both borrowers and servicers and could potentially cause lenders to leave the FHA single-family mortgage insurance program. The Urban Institute describes the proposed rule as “a mixed bag, but on balance far more negative than positive.” “It represents a modest improvement to very harsh rules for missing established deadlines but imposes an unrealistic timeline for filing FHA insurance claims and an overly punitive penalty for missing that timeline,” the group said. Attorneys at K&L Gates in Washington, DC, are more ominous in their assessment of the ...

Many condominium projects in California are losing FHA and VA business because their agency approvals have lapsed or are about to expire, according to lenders. In Orange County alone, about 57 percent of condo developments have FHA or VA approvals that are near expiration, said Jon Shrum, vice president of Commerce Home Mortgage in Huntington Beach, CA. It is unclear how many developments have expired approvals but the number could be significant, Shrum said. Condos accounted for 2.9 percent of total FHA endorsements as of June 30, 2015, and that share has remained flat over the first six months of 2015 and on a year-over-year basis, according to FHA data. “We’re seeing a lot of condo complexes whose approvals are expiring, and they are not even aware of it,” he said. “As an FHA and VA lender, we try to reach out to the condo homeowners associations (HOA) to make sure they retain or renew their ...

The FHA has announced a new format for reporting results of quarterly post-endorsement technical reviews of single-family loans. Previously, the loan-level findings were grouped into five broad categories: file documentation, credit/underwriting, operation deficiencies, program eligibility and collateral/asset valuation. The top five reasons for an “unacceptable” rating were provided for each category. Loans were rated as “conforming,” “deficient,” or “unacceptable,” with the last two ratings based on the magnitude of the underwriting error. With the new format, the focus will be on the most prevalent unacceptable findings, regardless of category. The period upon which the reporting is based is also different, according to FHA.Instead of reporting the review findings on a loan sample in the most recent quarter, FHA will now wait for one quarter to pass before reporting on the sample. Emphasizing the frequency of ...

The FHA has discovered glitches in FHA Connection and in the Home Equity Conversion Mortgage calculation software, which are creating problems for HECM lenders. A bad field edit in FHA Connection is preventing mortgagees from completing their on-screen financial assessment update on HECMs with negative residual income. This hinders submission of reverse-mortgage transactions to FHA for insurance. The FHA has issued temporary procedures that include instructions on submitting a request for a waiver of penalties for late payment of mortgage insurance premiums on closed loans. The agency was also alerted to a second technical problem following the release of the HECM Calculator, Version 2.2. The software incorrectly defaults, in some cases, to the 2.5 mortgage insurance premium rate when a value is entered in the Cash from Borrower and Cash from Lender fields. The FHA is also issuing ...

The VA Home Loan Guaranty Program has issued guidance to clarify the notification requirement applicable to all holders of VA repurchase and mobile-home mortgage loans. Under existing regulation, holders of VA repurchase and mobile-home loans are required to report to the Department of Veterans Affairs any event that leads to the full payment of a VA-backed loan. The guidance requires all holders to report the status of all VA repurchase and mobile-home mortgages upon full satisfaction of the loan. All notifications must be sent directly to the chief of contract assurance at nashpm.vbaco@va.gov. For further questions, contact Ronnie Lamb at ...

The FHA is developing standards that would allow FHA financing on homes with existing Property Assessed Clean Energy liens going forward. Specifically, the guidance would require subordination of PACE financing to first-lien FHA mortgages. The FHA is also working on a monitoring mechanism to track the number of PACE loans with FHA insurance in the future, said a HUD spokesman. Mortgage market analysts say FHA’s action could lead to broader adoption of the PACE program for FHA-insured single-family homes. The Mortgage Bankers Association, in a statement, applauded the move. “This modification should allow some homeowners to install energy improvements in their home but not impede the rights of the first lien, something the original PACE program failed to consider,” said David Stevens, MBA president and CEO. PACE programs allow local governments to raise bond-funded financing to ...

Another Cut in FHA Premiums Coming This Winter? Will the FHA take the bold step of cutting annual mortgage insurance premiums this winter? It’s an intriguing question posed by Capital Alpha Partners. The research firm, in a new report, quotes what it calls a “reliable FHA bull” who “presciently foresaw” the last premium cut. Alpha cautions that its source on the matter is not betting on such a move, but raises the possibility “that the tumblers could fall into place once again.” One possible catalyst for an MIP cut would be poor results from a forthcoming Home Mortgage Disclosure Act report that shows FHA as well as Fannie Mae and Freddie Mac are not serving low-income borrowers very well. In January 2015, FHA implemented a half-percent reduction in annual mortgage insurance premiums. At the time, the Department of Housing and Urban Development predicted that 250,000 new homeowners would ...

Purchase-mortgage lending provided most of the oomph that drove the 23.6 percent increase in total mortgage originations during the second quarter, but refinance activity still accounted for slightly over half of total production. Lenders funded $222 billion of first-lien purchase mortgages during the second quarter, a 59.7 percent increase from the first three months of 2015, according to Inside Mortgage Finance estimates. That was just shy of the $223 billion of purchase mortgages originated back in the third quarter of 2013, a figure that included some second-mortgage production associated with purchase loans. Meanwhile, refinance lending rose...[Includes three data tables]

The Department of Housing and Urban Development this week republished for comment new proposed changes to lender certification for FHA that would allow for minor lender errors while leaving the door open for government enforcement action under the False Claims Act. The proposed revisions, however, failed to impress mortgage lenders and raised the specter of increased overlays unless HUD makes clear assurances that, barring any significant mistakes, lenders will not be on the hook for millions of dollars for small glitches in the loan certification document. “The language in the certification lacks...