Mortgage lenders closed a record $28.31 billion in mortgages with Veterans Administration home loan guaranties during the first quarter of 2012, breaking the previous all-time high set in the fourth quarter of last year. VA lending has been going gangbusters over the past few years as FHA’s market share has gradually declined. In 2011, the VA program provided more new primary mortgage insurance coverage than the private MI industry for the first time ever since the birth of the private MI business. In 2011, the VA accounted for 22.0 percent of the primary MI market, and 26.0 percent in the...(Includes one data chart)

Mortgage industry participants have mixed views about the FHA’s revised policy on disputed debt despite a general concern over its impact on borrower eligibility and lenders’ bottom lines. This week, the FHA delayed implementation of the policy until July 1 to get more feedback from lenders and industry participants and to work on clarifying guidance. The policy’s initial effective date was April 1. Lenders felt the FHA had bypassed them when the agency decided to announce the policy revision in a Feb. 28 mortgagee letter, along with other FHA underwriting changes. Affected parties should have been able to ...

A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...

Increased efforts by mortgage companies to educate loan officers about VA loans have helped push VA originations to new heights. Production of loans guaranteed by the Department of Veterans Affairs continued its upward trend in the first quarter of 2012, up 10.3 percent from the previous quarter, according to Inside FHA Lending’s analysis of VA data. On a quarterly basis, volume rose to $28.3 billion in the first quarter from $25.6 billion in the fourth quarter and from $20.7 billion (36.7 percent) in the third quarter. The top 25 lenders combined for ... [with 1 chart]

The focus on foreclosure documentation on forward mortgages has set the stage for similar scrutiny on reverse mortgages, and the extra documentation required in a reverse mortgage adds to this challenge, according to compliance experts. In a recent legal analysis, Christopher Willis and Mercedes Kelly Tunstall, litigation attorney and of counsel at the Washington law firm Ballard Spahr, respectively, said reverse mortgage lenders and servicers could avoid many of the problems encountered by forward mortgages by examining their foreclosure process carefully and learning from ...

The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUD’s new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...

The FHA and Ginnie Mae continue to face risk-management challenges despite steps they have taken to better assess, manage and minimize risk, according to an updated report from the Government Accountability Office. The report said recommendations the GAO made in a previous assessment to improve risk management have not been fully implemented at either of the agencies. Both agencies, however, said efforts are underway to implement GAO recommendations. The FHA is getting more scrutiny from Congress because of the weak condition of the Mutual Mortgage Insurance Fund, whose capital reserve ratio has ...

Private mortgage insurers are optimistic the industry will remain competitive and expect a boost in new business as a result of the FHA’s recent premium price adjustments, but things may change for better or for worse depending on how economic factors play out in 2012. Officials at Radian Guaranty and Mortgage Guaranty Insurance Corp. said 2012 may yet turn out be a good year despite pessimistic outlooks by rating agencies. MI executives point to the declining unemployment rate and loan defaults as positive signs. Radian sees the recent FHA pricing changes as an opportunity for the MI industry...

The FHA’s total capital resources dipped slightly by $400 million in the last three months of 2011, but things could have been much worse had it not been for lower claims activity, according to the FHA’s quarterly report to Congress on Mutual Mortgage Insurance Fund programs. On balance, the report shows little change and nothing unexpected during the quarter, said industry participants. The much-anticipated changes will come after two FHA premium adjustments become effective on April 1 – an annual mortgage insurance premium increase of 10 basis points and a 75 bps hike in upfront premiums, they said. The upfront premium increase is expected to ...

The FHA would have more flexibility to adjust its insurance premiums and greater latitude to require lender indemnification under legislation approved by the House Financial Services Committee this week. The committee passed H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, by voice vote on March 27, sending the measure to the House floor for consideration later this year. The bill is slightly different from the initial draft the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity passed on Feb. 7, according to the bill’s author, Rep. Judy Biggert, R-IL. Under the bill, approved lenders may ...