Fannie Gets a Permanent CEO; Mr. Cooper Loses Some Luster…

Home mortgages that fail one of the basic tests to be classified as a qualified mortgage have become an increasingly large part of the agency market over the past few years, a new Inside Mortgage Finance analysis reveals. [Includes one data chart.]

To minimize credit risk in FHA’s forward mortgage portfolio, lenders have been ordered to manually underwrite loan applicants with low credit scores and high debt-to-income ratios. [Includes one data chart.]

A new report from the Consumer Financial Protection Bureau shows a dramatic shift by servicemembers who are first-time homebuyers from conventional to government-backed loans, particularly VA loans, during and after the financial crisis.

Market participants welcomed the new FHA guidance that allows the use of third-party vendors as an alternative method to verify a borrower’s employment, income and assets directly with the employer and financial institutions.

Higher conforming loan limits for agency mortgage-backed securities programs didn’t do much to offset a sharp decline in total jumbo lending last year, according to a new Inside Mortgage Finance ranking and analysis. [Includes three data charts.]

The record-long government shutdown had little direct impact on mortgage lending and home sales, according to industry stakeholders. However, it may take a while before business processes return to normal, they said.

Mortgage lenders continue to fund loans even as the record-long government shutdown entered its fifth week. However, the process, particularly for FHA and VA, is much slower than a few weeks ago due to lack of funding and severely reduced staff, according to industry participants.

Agency mortgage business is proceeding normally as the partial shutdown of the federal government nears two weeks. FHA processing will likely be slowed, and there are still concerns about IRS transcripts. Federal flood in-surance remains in business.