Mel Watt has a good seven months left on his term as director of the Federal Housing Finance Agency, but already the industry rumor mill is speculating on whom the White House might pick to replace him.So far, the names run the gamut – from “reasonable” picks such as Treasury counselor Craig Phillips or acting Ginnie Mae President Michael Bright, to some odd choices: former FHFA acting director Ed DeMarco or current House Financial Services Committee Chairman Jeb Hensarling, R-TX.Few in the industry buy the Hensarling choice except for the fact he’s an arch conservative, something President Trump likes in his appointees.

Acting FHA Commissioner Dana Wade voiced concern over increasing shares of FHA-insured loans with high debt-to-income ratios, cash-out refinances and purchase loans with downpayment assistance. Testifying recently before the House Appropriations Committee on the agency’s FY 2019 budget, Wade warned that such disturbing trends suggest that FHA’s exposure to loss could rise and put the Mutual Mortgage Insurance Fund and taxpayers at risk. Wade said FHA’s financial health and the impact of the volatile reverse mortgage portfolio are a continuing concerns. Last year, the fund’s economic net worth declined by $1.9 billion and the capital reserve ratio fell to 2.09 percent from 2.35 percent the previous year due to losses associated with Home Equity Conversion Mortgage loans. Wade noted an increase in the proportion of borrowers with DTI ratios in excess of 50 percent. In February, the ...

Reverse mortgage lenders chalked up a win in Florida’s Third District Court of Appeal on the question of whether surviving spouses of borrowers who had taken out a Home Equity Conversion Mortgage loan also qualified as “borrowers” and, therefore, cannot be evicted from the property after the death of the borrower. The appellate court’s ruling contradicted two previous court rulings in Smith v. Reverse Mortgage Solutions, Inc. and Edwards v. Reverse Mortgage Solutions, Inc. Both rulings held that surviving spouses of deceased HECM borrowers also qualified as “borrowers” under the terms of the mortgage and, therefore, entitled to protection from eviction. However, in One West Bank, FSB v. Palmero, the appellate court changed course and outlined the conditions under which a lender could prove that “borrower” meant only the person who actually had taken out the reverse ...

The House of Representatives appears ready to pass the Senate’s regulatory relief bill sometime this month while still planning to push for more revisions to the Dodd-Frank Act.

Sen. Mike Crapo, R-ID, chair of the Senate Committee on Banking, Housing and Urban Affairs, isn’t giving up on housing-finance reform in 2018, even though many industry observers already have. He said it’s still a “high priority,” while speaking at the Mortgage Bankers Association’s National Advocacy conference in Washington this week. Crapo disagreed with comments made earlier in the day by Housing and Urban Development Deputy Secretary Pam Patenaude, who said there aren’t enough legislative days left to do GSE reform this go around. And he was adamant in saying he’s not ruling out the possibility of reform happening in this Congress.

Bucking the popular notion that housing-finance reform should come with a government guarantee, a real estate professor from George Mason University suggests divvying up the risks so it’s not just on the federal government. Anthony Sanders, distinguished real estate professor in the university’s school of business, said most housing-finance reform proposals are “the same things wrapped in different color paper.” In a blog post last week, Sanders said that essentially proposals want to shut down Fannie Mae and Freddie Mac and open a government insurance corporation that requires an explicit guarantee at the expense of taxpayers.

Mel Watt has roughly eight more months remaining as director of the Federal Housing Finance Agency, but already the industry is beginning to worry about what possible changes his successor might make to the operations of Fannie Mae and Freddie Mac.

The Mortgage Bankers Association this week called upon its members to tailor their state advocacy and lobbying strategies to whatever opportunities they see in the increasingly incendiary political environment.

The number of taxpayers taking the mortgage interest deduction this year will decline by more than 50 percent compared with 2017, according to new estimates from the federal government. The mortgage interest deduction will be a lot less useful due to a large increase to the standard deduction.

Legislation was introduced this week in the House Financial Services Committee that would strengthen oversight of FHA mortgage servicers to ensure their compliance with the agency’s loss-mitigation requirements. The FHA Foreclosure Prevention Act of 2018 (H.R. 5555) would require the Department of Housing and Urban Development to conduct servicer oversight, including sampling, compliance reviews, and direct information collection from borrowers whose files were sampled. “A decade after the devastating foreclosure crisis, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure,” said Rep. Maxine Waters, D-CA, ranking member on the committee and sponsor of the bill. Waters said her bill would ensure that FHA servicers help families experiencing financial hardships avoid foreclosure so that they can ...