Norwich Commercial Group has launched a new division, Military Direct Mortgage, to focus exclusively on VA direct-to-consumer lending. Based in Avon, CT, just down the road from its parent company, Military Direct opened for business in August this year and the timing could not have been better. In September, issuance of securities backed by VA loans totaled $22.3 billion, up from $18.1 billion in August, according to Ginnie Mae data. VA loan originations saw a 17.4 percent increase in the third quarter from the previous quarter, and were up 22.3 percent over the nine-month period compared to last year. VA purchase-mortgage volume for September totaled $9.9 billion, up after a slight drop in August. Purchase-mortgage activity also improved by 26.1 percent in the third quarter, and by 16.5 percent year-over-year. VA refinance volume featured a huge 34.0 percent increase in ...

The Department of Housing and Urban Development inspector general, over the last several weeks, has reported a series of final civil actions that resulted in an enforcement action or monetary settlement between an FHA lender and the federal government. On Oct. 6, the IG announced the results of an audit of TXL Mortgage Corp., a direct endorsement lender, in Houston. The audit found TXL in violation of HUD requirements and that it had no acceptable quality-control plan in place. Specifically, 16 of the 20 sample loans the IG reviewed did not comply with HUD standards. Of the 16 loans, eight had significant underwriting defects and failed to qualify for FHA mortgage insurance. Two loans qualified but were over-insured, according to the report. As a result, TXL exposed HUD to more than $713,000 in unnecessary insurance risk and caused the department to incur more than ...

One of the key documents VA lenders require veteran borrowers to submit is the certificate of eligibility (COE). A VA loan application will not move forward without a COE, a requirement for any active-duty servicemember or veteran seeking to take advantage of the VA’s home-loan guaranty program. The COE verifies to the lender a loan applicant’s eligibility for a VA loan. The evidence a lender might require depends on the nature of the applicant’s eligibility. Veterans and current or former National Guardsmen or reservists who have been called to active duty must submit DD Form 214. The form would show the character of service and the reason for separation from the service. Active-duty servicemembers must submit a current statement of service signed by a superior, the unit commander or the adjutant, higher headquarters or the personnel office. The statement must contain the ...

VA Special Relief Following Hurricane Matthew. VA encourages holders of guaranteed loans to extend forbearance to borrowers in areas that were ravaged by Hurricane Matthew. Careful counseling with borrowers is recommended to help determine whether their difficulties are related to the hurricane or to some other cause that needs to be addressed. Lenders may reapply prepayments to cure or prevent a loan default, or modify the terms of an existing guaranteed loan without the prior approval of VA, provided certain regulatory conditions are met. In addition, VA has requested lienholders institute a 90-day freeze on all new foreclosures on loans affected by Hurricane Matthew. Lienholders must review all foreclosure referrals to ensure that servicers are justified in delaying foreclosure action. Further, the VA asked servicers to waive late charges and to suspend credit bureau reporting on ...

The Department of Housing and Urban Development’s inspector general urged the agency to revise regulations to avoid the possibility of another multi-billion dollar hit to the FHA insurance fund due to servicers missing their foreclosure or conveyance deadlines. According to a recent IG audit report, HUD paid approximately $2.23 billion in claims for an estimated 239,000 properties that missed foreclosure and conveyance deadlines. In particular, HUD paid an estimated $141.9 million for servicers’ claims for “unreasonable and unnecessary” debenture interest as well as $2.09 billion in servicer claims for holding costs incurred after the deadlines for foreclosure or conveyance had lapsed, the report said. Because of these exorbitant claims payments, the FHA’s Mutual Mortgage Insurance Fund became...

With Hispanics predicted to make up more than half of all new households formed between 2020 and 2030, their relatively low homeownership rate should be a growing concern in the mortgage market, according to the Urban Institute. In 2013, just 45 percent of Hispanic households owned their homes compared with 71 percent of whites, said UI researchers Jim Parrott and Yamillet Payano. “If one were to hold those rates constant as Hispanics become an increasing percentage of the pool of homebuyers, the homeownership rate would drop precipitously, causing considerable economic upheaval,” they said. Credit score is...

Given that the mortgage servicing industry seems far removed from where it was when the housing crisis peaked, what will become of default servicing in the years to come? For one thing, a certain amount of delinquency will always exist in the housing market, according to a new white paper from the Five Star Institute, which drew together research, insight and commentary from a host of industry resources and experts. “For all the loans that are out there, there will always be...

Private mortgage insurers are quietly gaining ground on their government-insured rivals in the critical home-purchase market, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. Fannie Mae and Freddie Mac securitized $61.47 billion of purchase mortgages with private MI coverage during the third quarter, a gain of 33.4 percent from the previous period. At the same time, Ginnie Mae securitized $79.91 billion of FHA and VA purchase mortgages, up 19.3 percent from the second quarter. The private MI share of agency purchase loans rose...[Includes two data tables]

Trends in the agency mortgage-backed securities market suggest that private mortgage insurers may have gained some market share from government MI programs during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized a total of $75.89 billion of insured single-family mortgages during the third quarter, an increase of 29.5 percent from the previous period. That was a tad below the 29.7 percent increase in overall MBS production by the two government-sponsored enterprises, but it kept the private MI share at 26.8 percent for the third quarter. Meanwhile, the booming Ginnie Mae market showed...[Includes two data tables]

Recent data on the state of the FHA’s Mutual Mortgage Insurance Fund and program financials suggest that the annual audit will show solid improvement in the government’s 2016 fiscal year, which ended Sept. 30. But there are some huge variables that could have a major impact on the final results that won’t be known until the annual audit is released late next month. The MMIF ended...