The dust is starting to settle over an increasingly complex landscape of agency loan limits for 2012 that features 83 defined metro markets where the FHA can insure loans that are too big to be financed by Fannie Mae or Freddie Mac. The Department of Housing and Urban Development this week released guidance on FHA loan limits that changed twice in calendar 2011. On Oct. 1, a new set of FHA loan limits based on a $625,500 maximum went into effect, and they will apply to loans with FHA case numbers assigned between that date and Nov. 17, said...(Includes one data chart)

Bank of America and Wells Fargo continued their dominance of the FHA servicing market, accounting for 55.1 percent of the business as of Sept. 30. Of the 1,177,858 FHA-insured loans currently being serviced, 16.91 percent are in various stages of delinquency. Seriously delinquent loans – 90 days or more behind on their mortgage payments – comprised ... [includes one chart]

Department of Housing and Urban Development Secretary Shaun Donovan this week told Congress that the FHA is considering a number of policy options, including further premium increases, to bolster the long-term health of the Mutual Mortgage Insurance Fund. Testifying before the House Financial Services Committee, Donovan said he expects to address premium increases in HUD’s FY 2013 budget proposal given the concerns raised by lawmakers regarding the impact of the reinstated maximum loan limits on the FHA’s declining capital reserves. Having higher loan limits than Fannie Mae and Freddie Mac will result in ...

Contrary to what critics claim about the recent increase in the FHA’s loan limits, high-balance mortgage loans insured by FHA have shown historically lower delinquency rates and, therefore, pose no significant risk to taxpayers or the FHA Mutual Mortgage Insurance Fund, said Department of Housing and Urban Development Secretary Shaun Donovan. Notwithstanding the agency’s opposition to legislation reinstating the pre-Oct. 1 temporary maximum loan limits for FHA, Donovan said early evidence, so far, shows that high-balance loans perform better than other FHA-insured loans. Last month, Congress enacted legislation reinstating ...

Jumbo lenders do not expect the higher FHA loan limits to have any adverse impact on their GSE business. Anyone seeking a loan above $625,500 only has one choice, and that is FHA, but the real question is how much business the conventional market would lose to FHA, lenders said. In addition to the higher loan limit, the FHA insures loans of more than 80 percent loan-to-value ratio and requires a 3.5 percent downpayment. The GSEs require a 20 percent downpayment on their jumbos. On the other hand, the private market offers loans above the GSE limits but does not originate loans in excess of 80 percent LTV. “For people seeking under-80 LTV loans, it is unlikely that ... [Includes one data chart]

Whatever FHA relief the Department of Housing and Urban Development may offer as part of a pending settlement of foreclosure-related charges will not necessarily let mortgage servicers off the hook, said HUD Secretary Shaun Donovan.Donovan assured lawmakers during a House Financial Services Committee hearing this week that any offer of relief from any FHA liability in connection with ongoing robo-signing settlement talks would be “in exchange for significant penalties and help to homeowners who were wronged by bad servicing practices.” The HUD secretary neither confirmed nor denied the ...

A coalition of 34 industry trade and affordable housing groups, housing and community reinvestment advocates has endorsed the nomination of Carol Galante as the Department of Housing and Urban Development’s deputy assistant secretary for housing and FHA commissioner.In a recent letter to both the chair and ranking minority member of the Senate Committee on Banking, Housing and Urban Affairs, the coalition voiced its strong support for Galante, who is currently serving in both positions on an acting basis. The coalition cited Galante’s experience as well as her previous job as HUD assistant secretary for multifamily housing. Her backers also point to her 31-year experience in private real estate as president and chief executive of BRIDGE Housing, California’s largest nonprofit housing development corporation, and its affiliate companies. In particular, the coalition underscored ...

The Department of Housing and Urban Development has announced a 3 percent cap on the actual financial and closing costs it would pay on behalf of purchasers of HUD-owned single-family properties. The “gross purchase price” is the bid price, before the subtraction of the broker’s sales commission and financing and closing costs. Upon closing of a competitive bid sale of a HUD foreclosed property, the department allows the deduction of buyer financing and closing costs from the proceeds. While the total amount of HUD’s payment will be indicated on HUD Form 9548 (Sales Contract, Property Disposition Program), the actual amount credited by HUD will be ...

The Department of Housing and Urban Development has announced a sealed bid sale of uninsured, nonperforming residential mortgages, the first of three bid loan sales scheduled in FY 2012. The sealed bid sale offering, SFLS 2012-1, is scheduled for Dec. 7, 2011. It consists of unsubsidized, nonperforming single-family mortgage loans that will be sold without FHA insurance and with servicing released. A listing of the mortgage loans is included in the due diligence materials provided to qualified bidders. Prospective bidders should first check HUD’s guidelines for bidder ineligibility. HUD made the sale information package available ...

President Obama has signed legislation returning funding fees for VA loans to their pre-Nov. 18 levels. The fees specified in H.R. 674, the 3 Percent Withholding, Repeal and Job Creation Act of 2011, are valid through Sept. 30, 2016. Signed on Nov. 21, the bill ends industry confusion over the amount of fees lenders should charge borrowers since the Department of Veterans Affairs, in a case of bad timing, issued new regulations in September to lower the fees. This was before Congress announced its intention to introduce legislation that will extend the higher fees through 2016. Under updated guidance issued by ... [includes one chart]