The FHA’s mortgage insurance premium freeze will have the hardest impact in markets with high shares of FHA-insured mortgage loans, according to a new analysis by the National Association of Realtors. The top 10 markets in which FHA dominates are in Texas and California along with wide swaths of the Southeast and Rust Belt states. FHA comprises more than 40 percent of home-purchase mortgages originated in the aforementioned markets, which would benefit significantly from the 25 percent MIP reduction announced by former Housing and Urban Development Secretary Julian Castro on Jan. 9 this year. Shortly after taking office, the new Trump administration froze a number of new policies issued during the waning days of the Obama administration, including the 25 bps MIP reduction. During his Senate confirmation hearing, HUD Secretary Ben Carson said he would set aside the ...

Correction: There was an error in the total number reported for Home Equity Conversion Mortgage originations in 2015 in the March 17, 2017, issue of Inside FHA/VA Lending. The correct total is $16.0 billion. HUD Secretary Ben Carson Visits Dallas/Ft. Worth. Housing and Urban Development Secretary Ben Carson continued his national listening tour this week in Dallas/Ft. Worth to learn more about HUD’s public housing programs. Carson embarked on a national listening tour March 15 at a Detroit high school bearing his name President Trump recently released his proposed preliminary FY 2018 budget, which showed among other things a drastic $6.2 billion reduction in funding for public housing assistance and affordable housing. Carson said the discretionary budget plan promotes fiscal responsibility at HUD by “promoting better efficiencies and ...

Over the past six quarters, selling Ginnie Mae servicing rights has been a difficult task with buyers turning their noses up at the product, preferring instead to stay within the safe confines of deals tied to Fannie Mae and Freddie Mac loans. According to investment bankers interviewed by Inside Mortgage Finance, the Ginnie market for mortgage servicing rights has been problematic for two main reasons: the fear of lawsuits and sanctions tied to FHA lending, and fast prepayment speeds tied to FHA and VA streamline refis. But now that rates have risen – and mostly stayed that way – there are...

The government-sponsored enterprises and their regulator, the Federal Housing Finance Agency, have done a lot to improve borrower access to credit, and now it is FHA’s turn to do the same, according to a new analysis by the Urban Institute. Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute, noted that Fannie Mae, Freddie Mac and the FHFA have been more successful than the FHA in reassuring lenders that they would be held liable only for underwriting errors and not for whether the borrower defaults on the loan. The GSEs and the FHFA have removed...

The Department of Veterans Affairs is considering possible solutions, including new regulation or policy changes, to address the ongoing problem of aggressive refinancing of VA purchase loans. Certain lenders and mortgage brokers apparently are still soliciting VA purchase loans for streamline refinancing despite Ginnie Mae’s effort to stop the practice and help mortgage-securities investors get full return on their investments. Ginnie Mae issued...

Congress should pass legislation setting uniform standards for qualified mortgages, according to the U.S. Mortgage Insurers trade group. USMI raised particular concerns about differences in the points-and-fees calculation for FHA mortgages compared with the standard for mortgages delivered to the government-sponsored enterprises. As required by the Dodd-Frank Act, the Consumer Financial Protection Bureau established standards for QMs. Certain federal regulators, including the Department of Housing and Urban Development, were allowed to implement QM standards that differed from the CFPB standards. USMI noted...

Correspondent mortgage originators account for an unusually large share of FHA and VA lending, but the channel lost some market share in 2016, according to a new analysis by Inside FHA/VA Lending. Correspondent production accounted for 53.2 percent of the $275.14 billion of government-insured mortgages originated by a diverse group of lenders that included the top players in the market. That was a significantly bigger correspondent share than was seen in the conventional-conforming market (42.6 percent) or the jumbo space (16.2 percent). However, the 2016 figure was down from a 57.8 percent correspondent share of FHA/VA lending back in 2015, the first year for which data are available. Correspondent originations of government-insured lending by the group were up 31.1 percent from 2015, but their total FHA/VA lending jumped 42.3 percent. The retail share rose ... [ 1 chart ]

Production of Home Equity Conversion Mortgage loans was down in 2016 with an estimated $14.9 billion originated last year, compared to $16.0 billion the previous year. Year-over-year, total HECM volume fell 6.4 percent. Purchase loans accounted for 85.9 percent of FHA-insured reverse mortgages produced over the 12-month period. Originations, however, rose by 8.0 percent in the fourth quarter from the previous quarter due to a spike in HECM lending in December. Purchase HECMs with an adjustable rate appeared to be the product of choice among HECM borrowers in 2016. American Advisors Group continued to dominate the market, closing 2016 with $2.1 billion in HECM originations for a 14.0 percent market share. One Reverse Mortgage was the second top HECM producer of the year with $855 million, while Reverse Mortgage Funding was in third place with $649.8 million. Liberty Home Equity Solutions hung on ... [ 1 chart ]

Ginnie Mae’s outdated organizational structure and staff levels have made it difficult for the agency to properly monitor and mitigate the risk posed by the increasing number of nonbanks participating in its MBS programs, according to the Department of Housing and Urban Development’s inspector general. In a recent briefing paper, HUD Inspector General David Montoya highlighted challenges Ginnie faces in monitoring nonbanks, adding that HUD is currently being audited by the IG to gauge its capacity to track and supervise nonbanks, said Montoya. Ginnie acknowledged...

Solicitation of VA purchase loans for streamline refinancing within weeks of closing is apparently continuing despite Ginnie Mae’s efforts to stop the harmful practice. The Mortgage Bankers Association has expressed concern that guidance on pooling eligibility for streamlined refinance loans, which Ginnie issued in October last year, was far less effective than expected. Although the aggressive refinancing trend has slowed due to Ginnie’s action, there are still “pockets of that activity” being reported, said Pete Mills, MBA senior vice president. Refinancing a veteran’s purchase mortgage less than six months after its origination is not in the vet’s best interest because it strips equity from the house and results in higher financing costs, said Mills. While the rapid refi trend involves only a small number of loans in Ginnie mortgage-backed securities pools, investors do not get the full benefit of their investment because of early prepayment. Mills said there are a handful of lenders and brokers that ...