The Department of Veterans Affairs has clarified the type of documents lenders would need to provide clear and marketable title for conveyed properties to the VA in all states and U.S. territories. Under VA rules, each conveyance or transfer of real property to the VA shall be acceptable if “the holder covenants or warrants against the acts of the holder and those claiming under the holder (e.g. by special warranty deed).” In addition, the conveyance would be acceptable if it entitles the VA Secretary to such title as is or if it is acceptable to prudent lenders, informed buyers, title companies and attorneys, generally in the community in which the property is located. The VA said its determination of clear and marketable title depends on state statutory requirements. As a general requirement, documents for proper conveyance of clear and marketable title to the VA include the ...

HUD Sends Final Condominium Rule to OMB for Clearance. The Department of Housing and Urban Development has sent a final rule to the Office of Management and Budget that would make it easier for borrowers to obtain FHA financing for certified condominium units. Once issued, the final rule will replace temporary guidance which HUD issued in November last year to ease FHA’s condo approval process. The move is aimed at increasing affordable housing options for first-time and low-income homebuyers. The final rule is expected to reflect measures in the interim guidance, including modification of the requirements for condo project recertification, revised calculation of FHA’s required ownership-occupancy percentage, and expansion of eligible condo-project insurance coverages. IG Scrutinizes HUD Oversight of SFHAs’ Downpayment Assistance Programs. Residential lenders that rely on ...

All three major food groups in the contemporary mortgage market – government-insured, jumbo and conventional conforming – saw roughly the same drop in new originations from the fourth quarter of 2015 to the first three months of 2016, according to a new analysis by Inside Mortgage Finance. Production of loans with FHA, VA and rural housing guarantees held up a little better than the other sectors, with estimated originations slipping 1.0 percent from the fourth quarter. Although purchase mortgages account for a relatively higher share of originations in the government-insured market, there was a boost in refinance lending, especially in the VA program, that helped sustain overall production in the sector. The conventional-conforming and jumbo markets were...[Includes two data tables]

Falling delinquency and foreclosure rates over the last few years have continued to break recent records, according to industry sources, thanks to several factors including an improved housing market and price appreciation. As of the end of March, only 4.95 percent of the $5.08 trillion of home mortgages covered by the Inside Mortgage Finance Large Servicer Delinquency Index were in default or foreclosure status. That was down from 5.54 percent at the end of the fourth quarter. The figures are not seasonally adjusted. The Mortgage Bankers Association reported...[Includes one data table]

Residential lenders that rely on “downpayment assistance” programs (DPAs) operated by state housing finance agencies are growing nervous about a lengthy and ongoing audit being conducted by the Inspector General of the Department of Housing and Urban Development. Late this week, a spokesman for the HUD IG’s office confirmed to Inside Mortgage Finance that audit has yet to be completed. “It’s getting into the final stages,” he said. “We originally thought it would be done in early 2016.” He stressed...

Quicken Loans CEO Bill Emerson ruled out any possibility of settlement with the Department of Justice over allegations of filing false claims on flawed FHA-insured mortgage loans, preferring instead a jury trial. During a recent interview with CNBC’s Squawk Box, Emerson said settlements are a business model that has worked well for the DOJ in its effort to recover taxpayer losses due to questionable FHA lending practices. Quicken Loans, however, will not cave in to agency…

Retail loan originations account for most new VA lending, but the correspondent channel plays an outsized role in the FHA market, especially in purchase-mortgage lending, according to a new analysis of Ginnie Mae mortgage-backed securities data by Inside FHA/VA Lending. Over half (51.1 percent) of VA loans securitized through Ginnie MBS in the first quarter of 2016 were retail originations, but only 39.1 percent of FHA loans came through that channel. The biggest source of FHA loans was correspondent lenders, which accounted for 45.8 percent of loans securitized during the first three months of this year. That was actually slightly below the 49.2 percent correspondent share of FHA loans back in 2014 and 46.8 percent last year. Correspondents accounted for well over half (53.9 percent) of FHA purchase mortgages during the first quarter, while playing a more ... [ 3 charts ]

Younger, active-service soldiers are outpacing non-military homebuyers under the age of 35 in home purchase – and they are buying larger, more expensive homes with VA loans, according to a new National Association of Realtors survey. The NAR survey, 2016 Veterans & Active Military Home Buyers and Sellers Profile, found quite a few contrasts between active-service military homebuyers and those who have never served. Of all homebuyers, 18 percent were veterans and 3 percent were in active military service. Of all home sellers, 21 percent were vets and 1 percent were active-military. According to the survey, the typical active-service homebuyer was a lot younger (median age of 34 years old) than non-military buyers (40 years old). The active-military homebuyer was more likely to be married and have several children living in the household. Consequently, they prefer larger single-family homes. Interestingly, the ...

Nearly a month after abruptly withdrawing a final rule for its single-family guaranteed loan program, the U.S. Department of Agriculture’s Rural Housing Service has republished a final rule on lender indemnification, refinancing and qualified mortgage requirements. The changes to the Section 502 Single Family Housing Guaranteed Loan program intend to broaden borrower access to USDA-backed loans and improve the agency’s risk management. Published in the May 3 Federal Register, the final rule expands RHS’ lender indemnification authority for loss claims in cases of fraud or misrepresentation or noncompliance with USDA loan origination. This action continues the agency’s efforts to broaden and improve its ability to manage risk related to its guaranteed home mortgage lending. In addition, the USDA is amending its refinancing provisions to require that the new interest rate not exceed the ...

The California Reinvestment Coalition last week called upon the Department of Housing and Urban Development to impose a moratorium to prevent CIT Group and its servicing subsidiary, Financial Freedom, from initiating any more reverse mortgage foreclosures. The CRC’s request is based in part on data it obtained from HUD indicating an unusually high foreclosure rate for Financial Freedom/CIT Group.According to the data, Financial Freedom’s 39 percent share of reverse mortgage foreclosures since April 2009 is more than two times greater than the company’s estimated market share. The CRC began looking into Financial Freedom’s foreclosure history after receiving complaints from a number of widowed homeowners and other heirs about Freedom’s foreclosure practices, said Kevin Stein, CRC associate director. Stein said the CRC filed a data request under the ...