The Department of Housing and Urban Development is tightening its oversight of principals in FHA-insured multifamily properties by requiring lenders to clear all requests for additional insurance commitments that exceed $250 million with HUD before approval. Recently issued guidance describes how lenders can obtain pre-approval from HUD when principals have FHA-insured assets greater than $250 million, including the proposed additional commitments. The department is concerned that FHA may be taking on too big a risk with such principals. HUD pre-approval is required to ...

The jumbo mortgage market enjoyed solid growth in new originations last year, but agency securitization programs regained some of the ground lost to the private sector back in 2011, according to a new Inside Mortgage Finance ranking and analysis. Fannie Mae, Freddie Mac and the FHA in 2012 financed a record $117.6 billion of home mortgages that exceed the traditional jumbo threshold of $417,000. That was up 38.9 percent from the combined agency total back in 2011, and it was roughly twice the growth rate in non-agency jumbo mortgage originations. The non-agency jumbo market rose...[Includes three data charts]

Private mortgage insurers and their industry allies this week warned Congress that a narrowly defined “qualified residential mortgage” rule and the proposed Basel III asset risk-weighting proposal could push loans to the FHA and make solvency a bigger problem for federal mortgage insurance. Industry representatives testifying during a hearing before the House Financial Services Subcommittee on Housing and Insurance said that while current FHA policies have crowded out private mortgage insurers from the marketplace, there are proposals under consideration that could give the FHA an even greater edge over private MIs. Specifically, the proposed QRM rule would exclude...

A new General Accounting Office report said adopting a VA guaranty model for the FHA would result in better-quality loans, a strong capital reserve and even tougher lender overlays that could result in fewer FHA borrowers. The new GAO report reiterated a previous assessment that adopting a VA guaranty model for FHA would have advantages and disadvantages but made no recommendation either way. Private mortgage insurers and others have put...

The available supply of residential MBS grew marginally during the fourth quarter of last year as the agency market grew enough to offset the ongoing decline in outstanding non-agency MBS, according to a new analysis by Inside MBS & ABS. The supply of single-family agency MBS increased by $48.1 billion during the fourth quarter, a 0.9 percent increase over the three-month period. The Federal Reserve gobbled up all the increase and then some; its total agency MBS holdings rose by $91.6 billion during the fourth quarter, an 11.0 percent increase from the previous period. Mutual funds appeared to hold...[Includes two data charts]

FHA mortgage delinquency rates trended lower in the fourth quarter of 2012 as did the foreclosure rate – signs that the housing market recovery may be on track finally. An Inside FHA Lending analysis of top FHA servicers’ portfolios showed a modest drop in the overall past-due rate in the fourth quarter to 16.87 percent from 17.45 percent in the previous quarter. This includes loans that are 30-60 days delinquent as well as 90-day + delinquent. As of Dec. 31, FHA servicers held a total of 7.65 million loans in their portfolios, of which 2.87 percent were in some stage of foreclosure, down from 3.07 percent in the third quarter. Of that total number of FHA loans, 7.39 percent were ... [chart]

The Department of Housing and Urban Development said it will share information soon on the estimated impact of mandatory, across-the-board spending cuts on HUD/FHA programs and their recipients. A HUD spokesman declined to put a sequestration tag on all affected programs, including FHA, saying details would be available as soon as the department notifies all HUD funding recipients of automatic spending cuts that went into effect last week. The mandatory cuts to defense and discretionary spending kicked in after Congress failed to enact a plan to reduce the deficit by $1.2 trillion over 10 years, as required by ...

The recent increase in mortgage insurance premium (MIP) and other policy changes to strengthen the FHA Mutual Mortgage Insurance Fund are causing borrowers with better credit to shift from FHA to conventional financing, according to a new Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The monthly survey of real estate agents found that FHA remains an option for borrowers who have limited cash resources and tainted credit. However, given their individual circumstances and FHA’s recent policy changes, many would take out a conventional loan if they could qualify. With a low 3.5 percent downpayment requirement, FHA appears to ...

Expressing its views and estimates for the Fiscal Year 2014 budget, the House Financial Services Committee remains concerned that the FHA has not fully exercised its powers to protect its mortgage insurance fund and urged the agency to begin charging additional user fees to strengthen its financial footing. Apparently, there is a hitch in that proposal. It seems the Department of Housing and Urban Development does not charge user fees and to do so would probably need clear authorization from Congress, said a HUD spokesman. It is not clear what the committee meant by ...

The reverse mortgage lending industry has asked Senate lawmakers to expand the Department of Housing and Urban Development’s authority to strengthen its oversight of the Home Equity Conversion Mortgage program. Testifying before the Senate Committee on Banking, Housing and Urban Affairs recently, Peter Bell, president of the National Reverse Mortgage Lenders Association, said it is crucial for HUD to be able to act swiftly to reduce the risk the program poses to the FHA insurance fund. Bell said HUD needs to implement changes “in a matter of months, not years” and for that to happen, it would need authority from Congress to ...