The Department of Housing and Urban Development could soon face a technology crisis with roughly 87 percent of its antiquated information-technology systems dying or on the verge of collapse. The warning came from the HUD inspector general in a semiannual report to Congress. The report raised concerns about the poor state of HUD’s IT systems, “of which 87 percent are at or near the end of their life cycle.” These systems include 400 IT products that no longer have technical support, the report noted. The problem is so bad that HUD is having trouble doing mathematical ...

House Financial Services Committee Approves Flood Insurance Reform Measures.The House Financial Services Committee this week reported out several bills to reform and reauthorize the National Flood Insurance Program, which is set to expire on Sept. 20, 2017. The bills that passed included H.R. 2875, the National Flood Insurance Program Administrative Reform Act of 2017, which would protect taxpayers from program fraud and abuse; H.R. 1588, the Repeatedly Flooded Communities Preparation Act, which would ensure community accountability for areas frequently damaged by floods; and H.R. 1422, the Flood Insurance Market parity and Modernization Act, which would increase the availability of private flood insurance. The committee also approved H.R. 2246, the Taxpayer Exposure Mitigation Act of 2017, which would shift flood insurance risk for commercial and multifamily properties in ...

Securitization rates appeared to rebound strongly in the first quarter of 2017, with an estimated 79.5 percent of primary-market mortgage originations finding their way into a variety of MBS, according to a new Inside MBS & ABS analysis. That’s up from a 69.1 percent securitization rate for all of 2016 and, if it keeps up for the rest of 2017, it would be the highest mark since 2013. In the fourth quarter of 2016, the rate was 72.7 percent. Both new MBS production and primary-market originations were...[Includes one data table]

Weeks after the Trump administration banned the practice, the Senate Judiciary Committee is looking into whether the Obama administration used mortgage-related settlement funds to funnel money to political organizations that Congress deliberately defunded. In a recent letter to Attorney General Jeff Sessions, Sen. Chuck Grassley, R-IA, chair of the Senate Judiciary Committee, revived a standing request to the Department of Justice for a list of all settlement agreements reached during the previous administration that involved alleged payments to partisan community organizations. He gave the agency until June 28 to respond to his request. Specifically, Grassley asked...

The Trump administration wants to pare back regulations that inhibit the non-agency MBS and ABS market and tilt current securitization economics that favor the government-sponsored enterprises over private issuers. “In order to revitalize a responsible [private-label securities] market, it is important to improve incentives for issuers through reasonable reductions in costs and regulatory burdens,” the Treasury Department said in a new report released this week. In particular, it aimed at adjusting relative economics for the government-sponsored enterprises and FHA/VA mortgage programs. On the regulatory side, Treasury recommends...

First-time homebuyers have fueled a surge in home sales in the last two years, and the trend is continuing into 2017, according to a new report on the first-time homebuyer market from Genworth Mortgage Insurance. The report focused on mortgage origination data from more than 20 million first-time homebuyers over the past 24 years, with some interesting findings. Approximately 85 percent of the overall increase in home sales over the past two years was...

The Treasury Department this week proposed eliminating the special qualified-mortgage provision that allows Fannie Mae and Freddie Mac to acquire loans with debt-to-income ratios that exceed the normal 43 percent limit for QM loans. The special treatment for the government-sponsored enterprises, known as the GSE patch, “creates an unfair advantage for government-supported mortgages without providing additional consumer protection … and inhibits consumer choices by restricting private sector flexibility and participation,” the agency said in a report on financial service regulatory reform. The report urged...

The eligibility of surviving spouses of deceased veterans is something that surfaces every once a while in discussions about VA lending. According to Maxine Henry, program analyst with the VA Home Loan Guaranty Service in Washington, DC, the term “veteran” includes the surviving spouse of any veteran who died in active military service or from a service-connected disability. However, in July 2012, Congress passed H.R. 1627, Honoring America’s Veterans and Caring for Camp Lejeune Families Act, expanding the category of spouses who would be eligible for VA home loan benefits. President Obama signed the bill into law in August of that year. Prior to the bill’s enactment, only surviving spouses of veterans who died in service or of service-connected causes were considered for a VA mortgage. The statute extended VA home loan benefits to others, including widows who have not remarried and ...

A military veteran’s disability pension, a key underwriting factor for a VA loan, either can be service-connected or non-service-connected. A non-service-connected pension is for vets whose disability is unrelated to his time in the military. “It is permanent and total in nature and may not have been caused by their service to the military,” said Mark Jamison, loan production officer (LPO) with the VA’s Cleveland Regional Loan Center. A service-connected pension is for vets whose disability was a result of their military service, Jamison noted. If a vet is eligible for both a service-connected disability from VA and a non-service connected pension, he or she gets only the greater of the two amounts. Those eligible for a non-service connected pension include vets who were discharged from service for reasons other than dishonorable, and who served at least 90 days of active military service, one day of ...

The Department of Veterans Affairs is seeking clearance for two information-collection forms that are crucial to a veteran’s ability to obtain or cure a VA-guaranteed mortgage loan. The Office of Management and Budget is currently reviewing the forms. The VA also has published notices in the June 1 Federal Register seeking public comment on the proposed revised forms. Comments for both notices are due July 3, 2017. The first form relates to information a veteran must provide to be exempted from paying a funding fee. Borrowers are required to pay a funding fee to obtain a loan with a VA guaranty, unless the borrower is a disabled veteran receiving VA compensation for his or her service-connected disability. Loans made to unmarried surviving spouses of veterans who have died in service or from a service-related disability also are exempted from payment of the funding fee (regardless of whether the ...