The FHA bucked a decreasing delinquency-rate trend for all other types of loan by posting an increase in past-due loans during the last three months of 2014, according to the Mortgage Bankers Association’s latest national delinquency survey. On a seasonally adjusted basis, the overall delinquency rate fell 17 bps for all loan types to 5.68 percent, MBA data showed. Data compiled by the Inside Mortgage Finance Large Servicer Delinquency Index also showed a sizeable decline of 32.7 basis points in the fourth quarter from the prior quarter. The 24 servicers covered by the index had a delinquency rate of 6.34 percent in the fourth quarter, down from 7.59 percent in the same period the prior year. The IMF data are not seasonally adjusted. In contrast, the FHA delinquency rate rose to 9.73 percent in the fourth quarter, up 4 bps from the previous quarter, according to the MBA. On the other hand, loans with a ...

Although the new rules for surviving spouses of borrowers with FHA-insured reverse mortgages address many of the issues raised by non-borrowing spouses, some questions remain unanswered, according to legal experts. The guidance in Mortgagee Letter 2015-03 provides insufficient answers to the issues it was meant to address, said Robert Couch, a partner with the Birmingham, AL, law firm of Bradley Arant Boult Cummings and former general counsel at the Department of Housing and Urban Development. Servicers should take note of those issues and seek further clarification, he said. Issued on Jan. 29, the guidance provides a way for lenders to proceed after a borrower with a Home Equity Conversion Mortgage loan dies and is survived by a non-borrowing spouse. It allows a lender to assign to HUD HECMs that are in default due to the death of the borrower, as long as certain ...

HUD Announces Revised Implementation Date for HECM Financial Assessment Guidance. The Department of Housing and Urban Development further delayed the effective date of new guidance requiring a financial assessment of Home Equity Conversion Mortgage loan applicants. Issued in November last year, the new guidance becomes effective for HECM case numbers issued on or after April 27, 2015. The FHA said the change was due to a delay in efforts to align vendor software with HUD software to get the system up and running. Last month, HUD moved the guidance’s implementation date to March 2. The guidance requires lenders to evaluate borrowers’ willingness and capacity to meet their HECM obligations and to comply with program requirements. HUD Aligns QM Points-and-Fees Limit to Newly Recalculated CFPB Standards. The Department of Housing and Urban Development has aligned the points and fees limit under its qualified-mortgage rule to the ...

Most mortgage lenders reported solid increases in refinance originations during the fourth quarter of 2014, but the faltering purchase-mortgage sector still accounted for most of their business. A new Inside Mortgage Finance ranking and analysis reveals that refinance originations increased by 16.9 percent from the third to the fourth quarter. Based on securitization figures from Fannie Mae, Freddie Mac and Ginnie Mae, refi activity rose by a more modest 14.0 percent, although these data trail the primary market by one or two months. Meanwhile, purchase-mortgage originations were...[Includes five data charts]

The Federal Housing Finance Agency this week directed Fannie Mae and Freddie Mac to provide a lot more transparency in the fledgling process of selling nonperforming loans, or NPLs, and to make sure borrowers are taken care of in the process. Freddie this week announced details on its second NPL sale; Fannie has not yet done such a transaction. But both government-sponsored enterprises are expected to emphasize selling their less-liquid assets, such as NPLs and non-agency mortgage securities, as they continue to downsize their retained portfolios. The new guidelines cover...

Congress should encourage stronger credit enhancements and greater use of risk sharing to limit government exposure to mortgage losses, according to industry representatives. Testifying before the House Financial Services Subcommittee on Housing and Insurance, Rohit Gupta, president and chief executive of Genworth Mortgage Insurance, said the industry is not only highly capitalized and strongly regulated, but has a proven countercyclical credit enhancement that reduces taxpayer exposure. “We are...

The default risk index for securitized agency purchase mortgages rose to a new high in January, the fifth straight month of a steady increase in the composite National Mortgage Risk Index, according to the American Enterprise Institute. The NMRI increased to 11.97 percent, a 0.4 percentage point increase from the average default risk in fourth quarter last year and 0.8 percentage points up year over year. Data also indicated...

Department of Housing and Urban Development Secretary Julian Castro defended a key provision in the administration’s FY 2016 budget proposal that would allow the FHA to assess lenders an administrative fee to fund improvements in the loan origination and servicing processes. At a HUD budget hearing this week before the House Appropriations Committee’s Subcommittee on Transportation, HUD and Related Agencies, Castro said the proposed fee would be used for risk management and technological improvements and in establishing quality-assurance policies to help lenders originate more FHA loans without fear of regulatory action or litigation. Castro responded...

Securitization was still the dominant method to fund new home mortgage production in 2014, but Wall Street got a run for its money from portfolio lenders. A new Inside MBS & ABS analysis reveals that 70.5 percent of residential mortgages originated last year were funneled into mortgage securities. That was down from 78.5 percent in 2013 and represented the lowest mortgage securitization rate since 2006. Delivering eligible loans into new Fannie Mae, Freddie Mac and Ginnie Mae securities is...[Includes one data chart]

VA loan volume continued to rise in the fourth quarter of 2014, driven by low interest rates and a strong demand for the lower downpayment loans, according to an Inside FHA Lending analysis of Ginnie Mae/VA data. The volume of VA loans securitized in Ginnie Mae mortgage-backed securities rose 4.0 percent in the fourth quarter to $107.8 billion from the previous quarter, with more than half of the loans coming through the retail channel. Retailers accounted for $51.5 billion in VA loans securitized during the quarter while correspondents and brokers accounted for $44.4 billion and $11.9 billion, respectively. The overall average FICO score for VA loans was 707, with average loan-to-value and debt-to-income ratios of 95.0 percent and 38.2 percent, respectively, during the quarter. Correspondents came up big with VA purchase loans, accounting for $31.7 billion of the $65.1 billion in total purchase loans produced during the fourth quarter. Retail loan officers accounted for $28.5 billion while brokers brought in ... [ 1 chart ]