A significant drop in the VA refinance market in the first quarter is proof that Ginnie Mae’s anti-churning policy has been effective in curbing serial refinancing of VA loans, according to agency officials at the recent VA Lenders Conference in Kansas City, MO. A hefty 42.7 percent decline in VA refi volume during the first three months of 2017 reflects an apparently successful effort by Ginnie to stop the practice of refinancing VA loans within six months of closing. By comparison, securitization of VA purchase loans fell 17.3 percent from the fourth quarter. John Getchis, senior vice president at Ginnie, said...

A disproportionate share of the premiums collected under the FHA’s current pricing scheme are paid by non-defaulters even though higher premiums are targeted for higher-risk borrowers, according to a new analysis from the Federal Reserve Bank of New York. The study contends that FHA’s policy of allowing borrowers to refinance their upfront mortgage insurance premium “reduces the total cost of borrowing during the first year, but results in non-defaulters paying ...

California remained the mother lode of mortgage insurance business in the first quarter of 2017, but a number of other major states had higher concentrations of insured business, according to a new Inside Mortgage Trends analysis. Some $12.50 billion of agency mortgages securitized during the first quarter with some form of primary MI were tied to Golden State properties, representing 58.9 percent of California’s total agency purchase-mortgage ... [Includes one data chart]

The problem with the perceived appraiser shortage is not whether VA has enough appraisers but whether there are enough of them in areas where appraisal demands are greater, according to a ranking member of the VA Fee Panel of the Department of Veterans Affairs. As of April 8, 2017, the Fee Panel had 5,006 licensed and certified appraisers working in the eight regional loan centers (RLC) that administer the VA Home Loan Guaranty program, said Kevin Eason, valuation officer with the Denver RLC. Last year, 553 new appraisers were appointed to the panel, whose members accept VA appraisal assignments on a rotating basis. Speaking last week at the annual VA Lenders Conference in Kansas City, MO, Eason noted...

Many borrowers could have seen significant savings on the interest rate on a mortgage if they shopped around, according to a working paper published by the Consumer Financial Protection Bureau’s Office of Research. The bureau economists noted that close to half of consumers didn’t shop before taking out a mortgage, based on the National Survey of Mortgage Originations, a representative survey conducted by the CFPB and the Federal Housing Finance Agency. And only 16.0 percent of borrowers considered three or more lenders before obtaining a mortgage. The economists said...

There is a new boss in the Ginnie Mae mortgage-backed securities market. PennyMac Financial rose to the top of the issuer ranking in the first quarter of 2017 despite a sharp decline in volume, according to a new analysis and ranking by Inside FHA/VA Lending. PennyMac issued $10.78 billion of single-family Ginnie securities during the first three months of the year. The figures in this analysis are based on Ginnie loan-level disclosures, which truncate loan amounts to $1,000 increments. PennyMac’s first-quarter production was off 27.9 percent from the fourth quarter of 2016, a slightly bigger decline than the 24.8 percent drop in overall Ginnie issuance. Even though the firm fared slightly worse than the total market, its first-quarter downturn was less severe than Wells Fargo’s. Wells has been the top Ginnie producer for a long time, as well as the top player in most segments of the ... [ Charts ]

A steep drop in VA-backed securities issuance in the first quarter of 2017 suggests that Ginnie Mae’s efforts to curb serial refinancing of VA loans are working, according to agency officials. Speaking on a panel at the annual VA Lenders Conference in Kansas City, MO, this week, Ginnie executives said that a change in pooling requirements for streamlined refinance mortgages appears to have curbed a destructive appetite for refinancing new VA loans within six months of closing. The practice has caused faster prepayments in Ginnie mortgage-backed securities pools and smaller payouts to investors. VA refi volume fell 42.7 percent from the previous quarter (see chart on page 2), contributing significantly to the 32.2 percent decline in total VA loan securitization during the period. John Getchis, senior vice president at Ginnie Mae, said he does not think the churning trend will continue because the ...

The VA mortgage market is experiencing a shortage of qualified appraisers willing to accept VA loan assignments, causing longer wait times, delayed closings and higher appraisal costs. Testifying during a hearing called by the House Veterans Affairs’ Subcommittee on Economic Opportunity, top VA officials complained of difficulty in obtaining appraisals, particularly in rural and remote areas of the country. Jeffrey London, director of the VA Loan Guaranty Service, said the apparent shortage has resulted in turn times for appraisals that can take up to nine weeks. The VA maintains a seven-day timeliness requirement for appraisals for the VA Fee Panel. The problem was more acute last year when loan volumes were strong in many markets, including VA. Turnaround times for appraisals may have exceeded more than 30 days in some rural areas, according to the Appraisal Institute. The markets have ...

The Mortgage Review Board reported approximately $454.4 million in settlements against 25 FHA lenders for various violations of agency lending requirements and imposed more than $1.8 million fines and other penalties against 253 lenders for annual recertification violations. The settlements and penalties resulted from administrative actions taken by the board against FHA lenders from Oct. 1, 2015, through Sept. 30, 2016. The settlements did not constitute an admission of liability or fault. The largest settlement amount, $113 million, was between Freedom Mortgage of Mount Laurel, NJ, and the Department of Justice to resolve alleged violations of FHA requirements and the False Claims Act. In August last year, the MRB voted to release Freedom from any civil money penalties or administrative actions as part of the lender’s settlement with the DOJ. The largest civil money penalty imposed by the ...

When it comes to selling Ginnie Mae mortgage servicing rights the past two years, it’s been mostly a bear market, but all that may be changing soon. At least that is what sellers and their merger and acquisition advisors hope. Mark Garland, executive vice president of MountainView Financial Solutions, Denver, said that of late, “We have seen a few Ginnie trades go off at a level closer to full value.” Garland told Inside FHA/VA Lending that he expects this trend to continue with prices tightening over the summer “provided rates hold and [prepayment] speeds stay largely in line with expectations.” And if that happens, there could be an increase in the ability of FHA/VA lenders to securitize excess cash flows. But that’s getting a little ahead of the equation. Over the past 24 months, the Ginnie MSR market has been difficult for two reasons: the fear of lawsuits/sanctions tied to FHA lending, and fast ...