The delinquency rate on mortgages rose in the second quarter of 2015, according to the Inside Mortgage Finance Large Servicer Delinquency Index. Overall, delinquencies remained below levels seen a year ago, though the Mortgage Bankers Association said FHA performance has declined. The delinquency rate on the IMF index was 5.85 percent at the end of the second quarter, up from 5.75 percent the previous quarter and down from 6.74 percent at the midway point in 2014. The share of mortgages severely delinquent as well as those in foreclosure declined compared with the first quarter of 2015, while the share of new delinquencies and loans 90-days past due increased. FHA mortgages accounted...[Includes one data table]

Sellers saw a modest increase in VA loans delivered to Ginnie Mae in the second quarter of 2015, most of which were streamline refinance loans, but FHA definitely took the cake, according to an Inside FHA/VA Lending analysis of agency data. Approximately $39.1 billion in VA purchase and refi loans were placed in Ginnie Mae pools in the second quarter, up 11.8 percent from the prior quarter. Of that amount, $20.9 billion were VA refinances, up 2.1 percent from the first quarter. Some 52 percent of the VA refis were originated in-house while correspondents accounted for 30.7 percent. Brokers brought in 17.3 percent of the securitized VA refi loans. VA purchase loans underlie an estimated $18.2 billion in Ginnie mortgage-backed securities in the second quarter, 48.4 percent of them retail. That number was up 25.5 percent from the previous quarter. VA loan correspondents were busy as well, accounting for ... [ 2 charts ]

The Department of Veterans Affairs Home Loan Guaranty program has announced new maximum attorney fees for all loan terminations completed on or after Aug. 31, 2015. In this regard, the VA has published in the July 31 Federal Register an updated table of the cost of legal services for terminating VA loans in judicial and non-judicial jurisdictions. The amounts of legal fees in the table are deemed “reasonable and customary” by VA for all states, based on an annual agency review of such fees allowed by other government-related home loan programs. Issued by VA, Fannie Mae and Freddie Mac, the list of fees cover the cost of terminating a single-family home loan, including foreclosure, deed-in-lieu of foreclosure and bankruptcy-related services. Based on increases announced over the past year by the VA and the government-sponsored enterprises, the VA has deemed it necessary to publish a ...

M&T Bank is in talks with the federal government to resolve an investigation of a pre-crisis sale of FHA-insured and conforming mortgages to Fannie Mae and Freddie Mac that resulted in losses for the government-sponsored enterprises. The New York-based bank disclosed the settlement discussion in a second-quarter filing with the Securities and Exchange Commission and is cooperating with the investigation. The Department of Justice and the Department of Housing and Urban Development’s Inspector General are investigating whether M&T Bank complied with FHA’s underwriting guidelines as well as with guidelines for selling loans to Fannie and Freddie. It is unclear how much the FHA paid out in loss claims in this case but investigators said that, based upon their review of a sample of FHA loans for which a claim was paid, “some of the loans do not meet underwriting guidelines.” M&T Bank could be ...

A growing number of issuers are engaging in servicing transfers prematurely or making changes to their servicing platforms, causing problems for Ginnie Mae’s monthly pool-level and loan-level reporting. A Ginnie Mae issuer “transfers servicing” when it shifts in-house servicing to a subservicer, moves servicing from one subservicer to another, or relocates servicing in-house. Effective servicing as well as accurate and timely reporting are critical to Ginnie’s mortgage-backed securities program, the company said in recently issued guidance on servicing transfers. The new policy guidance would ensure that issuers have the capacity and oversight controls at all times to meet their obligations under the Ginnie Mae MBS program. Currently, issuers are required to obtain Ginnie’s approval before engaging in any servicing transfer with a subservicer or from one subservicer to another. Effective immediately, any issuer that wishes to ...

A California federal district court’s recent decision to reject fair housing claims related to FHA loans brought by the City of Los Angeles against Wells Fargo relied heavily on the U.S. Supreme Court’s recent decision on disparate impact, according to legal experts. Specifically, the U.S. District Court for the Central District of California granted summary judgment for Wells Fargo in a Fair Housing Act case brought by the City of L.A. The suit alleged that the bank’s mortgage lending practices had a disparate impact on minority borrowers, which resulted in a disparate number of foreclosures in minority areas. Wells Fargo was accused of reverse redlining since at least 2004 by imposing different terms or conditions on minority borrowers. The suit further alleged that Wells Fargo originated eight types of “predatory” home loans targeted to minorities. These loans include “high-cost” loans, subprime loans, interest-only loans, ...

Starting in June 2016, FHA lenders will find delivering origination appraisals will be faster when the agency’s Electronic Appraisal Delivery (EAD) portal becomes fully operational. The FHA will soon begin registration of EAD portal users so that lenders can select their implementation schedule. By using the portal, FHA lenders will find it less cumbersome to do business with the FHA, minimize appraisal errors and reduce post-endorsement corrections of appraisals, the agency said. The EAD portal is a web-based platform that will allow FHA lenders and their third-party service providers to transmit single-family appraisal data and deliver appraisal reports prior to endorsement of a loan for mortgage insurance. Delivery of appraisals via the EAD portal becomes mandatory for all case numbers assigned on or after June 27, 2016. Lenders may use the phase-in implementation period to familiarize themselves and train in the ...

A Miami FHA lender and two of his associates plead guilty to a mortgage fraud scheme that cost the FHA approximately $64 million in losses. Hector Hernandez, owner of Great Country Mortgage Bankers and a real estate developer, and his business partner Aleida Fontao each pleaded guilty to conspiracy to commit wire fraud. Olga Hernandez, an underwriter for Great Country, confessed to falsifying information in borrowers’ loan applications to make them appear qualified. According to the DOJ, Great Country was a direct endorsement lender that made loans to first-time homebuyers and borrowers with imperfect credit and low credit cores. Hernandez and Fontao admitted to pressuring their loan officers to approve and close loans based on fraudulent income and employment information. Borrower credit histories were altered to make them look good. The senior underwriter admitted to providing false information to her co-workers and endorsing borrowers’ applications despite knowing that they did not qualify for the loans.

HUD Proposes to Clarify Participation of Religious Organizations in Agency Programs. The Department of Housing and Urban Development has proposed a rule that would amend current rules regarding equal participation of faith-based organizations in HUD programs. The amendments implement a 2010 presidential directive, which clarified that religious providers may compete for federal funding without losing their religious identity. The directive also provided protections for program beneficiaries, including a referral process for those opposed to religious groups that operate federally funded programs. The public has 60 days from the date of publication in the Federal Register to comment on the proposed changes. NMI Holdings Turn Profitable. NMI Holdings, parent company of National Mortgage Insurance, appears to be turning the corner toward profitability as the changes implemented by ...

Lenders have slowly loosened underwriting standards since the third quarter of 2013, with the credit expansion largely focused on the agency market, according to a new analysis by the Urban Institute’s Housing Finance Policy Center. Actions by the government-sponsored enterprises and the FHA to address buyback risk appear to have helped prompt lenders to loosen underwriting standards on agency loans. The HFPC’s credit availability index tracks ...