Mortgage delinquencies followed a seasonal trend and rose in the third quarter of 2014, according to the Inside Mortgage Finance Large Servicer Delinquency Index. The Mortgage Bankers Association, however, reported a 19 basis point drop on a seasonally-adjusted basis that put the overall rate at 5.85 percent, the lowest since the financial crisis. The 24 lenders that reported delinquency data to Inside Mortgage Finance had an average delinquency rate of 6.63 percent, up from 6.54 percent in the second quarter. Unadjusted delinquency rates usually spike higher in the third quarter, even in the midst of a downward trend. The delinquency index also showed...[Includes one data chart]

Private mortgage insurers reported hefty increases in the volume of new insurance written during the third quarter of 2014, according to a new Inside Mortgage Finance ranking and analysis. The seven active private MIs wrote primary insurance coverage on $53.95 billion of new mortgage originations during the third quarter, a gain of 22.8 percent from the previous period. On a year-to-date basis, total new primary insurance by the MIs was still down 22.4 percent from the first nine months of last year, mostly because activity in the Home Affordable Refinance Program has declined sharply. HARP accounted...[Includes three data charts]

Wells Fargo is in discussions with the Department of Justice about a possible resolution of alleged improper origination and servicing of FHA loans that resulted in huge paid claims and significant losses to the agency’s Mutual Mortgage Insurance Fund. The ongoing talks are related to a complaint filed by the government in federal district court in Manhattan on Oct. 9, 2012, alleging, among other things, that Wells Fargo improperly certified FHA mortgages between 2001 and 2010 for insurance even though it knew the underwriting was flawed. The complaint said that the bank’s insurance claims should not have been paid when some of the loans later defaulted. It further alleged that Wells Fargo did not disclose the loans’ deficiencies to the FHA before making insurance claims. On Dec. 1, 2012, Wells Fargo filed...

Income documentation and other standards that have been in place since Fannie Mae entered conservatorship in 2008 will apply to the company’s new 3 percent downpayment product, and loan assessment by a private mortgage insurer will be crucial, according to a company spokesman. The spokesman said details will be announced shortly. Fannie Mae is working with the Federal Housing Finance Agency to design the government-sponsored enterprise’s revamped 97 percent loan-to-value product. Sources said previous requirements for a standard 97 LTV product, which Fannie offered until November 2013, are being considered. The FHFA announced...

The Department of Housing and Urban Development will not take on the new points-and-fees cure provision for qualified mortgages adopted by the Consumer Financial Protection Bureau. The agency is concerned that lenders might inadvertently violate the FHA’s statutory 3.5 percent downpayment requirement. HUD adopted other changes in the CFPB’s revised final rule on ability to repay and qualified mortgages (ATR/QM) to maintain consistency but saw no need for any further ability to cure points-and-fees errors. Reimbursement of any excess points and fees to the borrower could take away from the mandatory 3.5 percent downpayment and render the loan ineligible for FHA insurance, the agency explained in a notice published in the Nov. 3 Federal Register. HUD said it would provide lender guidance under its own QM rule on ...

Reinstating the government-sponsored enterprises’ conventional 97 percent loan-to-value mortgage programs would benefit first-time homebuyers and borrowers with little or no cash reserves for a downpayment but adversely affect the FHA Mutual Mortgage Insurance Fund, according to analysts. If limited to first-time homebuyers, a conventional 97 LTV loan would offer some new homeowners better home loan financing than FHA and provide greater access to mortgage credit, said analysts with Bank of America Merrill Lynch. For years, Fannie Mae offered conventional 97 LTV loans through its MyCommmunityMortgage to help first-time homebuyers purchase a home with only a 3 percent downpayment. It was a better alternative to FHA’s main product, which required a 3.5 percent downpayment. The Fannie product also had less ...

Ginnie Mae servicing bumped up slightly in the third quarter after an uneventful prior quarter as FHA purchase activity continued to drag, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose quarter over quarter by 1.4 percent. On an annual basis, volume increased 4.6 percent from the same period a year ago. Ginnie Mae servicers ended the quarter with a total of $1.48 trillion in unpaid principal balance, up from $1.46 trillion in the previous quarter. The top three servicers saw volume drop on both quarterly and year-over-year bases. Wells Fargo remained as top servicer of Ginnie Mae mortgage-backed securities, closing out the quarter with $422.4 million, down 0.8 percent from the previous quarter and down 0.6 percent from the prior year. The mega-servicer dominated the Ginnie market with a 28.6 percent market share. JPMorgan Chase carved out a 10.1 percent market share with ... [1 chart]

The real estate industry is urging the FHA to tighten up its pre-foreclosure sale process and be more vigilant before referring loans to the single-fThe real estate industry is urging the FHA to tighten up its pre-foreclosure sale process and be more amily loan sales program (SFLS). Commenting on the proposed section on servicing of the FHA Single Family Policy handbook, the National Association of Realtors expressed concern that the FHA is auctioning large pools of mortgages without considering the investor’s ability to achieve neighborhood stabilization goals such as homeownership preservation and affordable housing. The first step for FHA to improve servicing and pre-foreclosure efforts is to ensure mortgage servicers’ full compliance with FHA loss-mitigation requirements before referring loans to the SFLS, the NAR suggested. In addition, the FHA should ...

FHA single-family mortgage originations fell slightly in August from July as the agency’s home-purchase volume continued to falter, agency data showed. In August, the latest month for which FHA origination data are available, forward-loan originations totaled $12.6 billion, down 3.2 percent from the prior month and down 25.1 percent from the same period last year. Purchase mortgages made up 81.1 percent of all FHA-insured single-family loans originated during August, while refinances accounted for the remainder. Fixed-rate mortgages were the product of choice, as they have been in previous periods. Quicken Loans relied more on refis than on purchase lending (38 percent of new loans) as it closed the month with $534.8 million in new production, down 8.5 percent from July. Nonetheless, it was good enough for a 4.2 percent FHA market share. Second-place Wells Fargo’s total production for the month was ... [1 chart]

Reverse mortgage lenders are seeking a policy change that would allow Fannie Mae and Freddie Mac to count reverse mortgages toward their proposed annual affordable housing goals. In another regulatory area, the industry has asked to delay a proposed mortgage disclosure rule until reverse lenders’ concerns have been resolved. Commenting on the proposed 2015-2017 affordable housing goals for the government-sponsored enterprises, the National Reverse Mortgage Lenders Association is urging the Federal Housing Finance Agency to allow the GSEs to reenter the reverse mortgage market through a proprietary reverse mortgage program. Specifically, such a change would enable Fannie Mae and Freddie Mac to purchase reverse mortgages or securities backed by the product. Currently, the FHA under its Home Equity Conversion Mortgage program insures most ...