The question of whether the FHA should allow the refinancing of underwater mortgages seized through eminent domain has reemerged as a key issue following a recent decision by the city of Richmond, CA, to use its authority to take over distressed mortgages for restructuring. There is a new twist to the question, however. Could FHA’s refusal to refinance such mortgages be deemed discriminatory against cities and homeowners if eminent domain programs meet the requirements of the FHA Short Refinance program? Is that tantamount to redlining? A top executive of Mortgage Resolution Partners, which developed the eminent domain strategy to help underwater homeowners at risk of foreclosure, said ...

California remains the top source of new single-family mortgages for Fannie Mae and Freddie Mac, even as Fannie remains the dominant GSE in terms of production through the first half of the year, according to an Inside The GSEs analysis. A total of $160.3 billon home loans on Golden State properties were securitized by the two GSEs during the first six months of 2013, accounting for 23.1 percent of their total business for the half year. That was up 21.2 percent from total California production during the first six months of 2012 as the overall GSE market rose 20.2 percent from a year ago.

The FHA has proposed measures to strengthen its oversight of FHA lenders and each measure could potentially increase lenders’ liability and compliance risk, compliance experts warned. Published for comment in the July 9 Federal Register, the proposals are part of a new enforcement regime that the FHA is considering to monitor and sanction lenders. They cover statistical sampling, origination quality standards, annual reviews, compare ratios, and indemnification and other remedies for loan defects. The proposed enforcement measures, however, raise a ...

The Department of Housing and Urban Development is adopting the mortgage banking industry’s data standards format for the FHA’s TOTAL Mortgage Scorecard, which HUD uses to evaluate the credit risk of FHA loans that are submitted through an automated underwriting system. The standards were developed by the Mortgage Industry Standard Maintenance Organization (MISMO), a nonprofit subsidiary of the Mortgage Bankers Association. MISMO is an open data standards group that promotes consistency among mortgage transaction participants to reduce loan processing costs, increase transparency, and ultimately ...

Ginnie Mae guaranteed more than $216.9 billion in mortgage-backed securities during the first half of 2013, up 18.8 percent from the same period last year. Issuance was also up 8.0 percent in the second quarter from the first quarter, according to an Inside FHA Lending analysis of Ginnie Mae data. Not surprisingly, a significant share – $132.8 billion – of Ginnie Mae MBS issuances over the six-month period were backed by FHA loans. VA accounted for $72.1 billion while Rural Housing Service loans totaled $10.5 billion. Ginnie Mae issuances dropped during the first quarter but surged in the second quarter as ... [1 chart]

Sallie Mae’s recently announced plan to split into two publicly traded companies isn’t leaving analysts at ratings services or Wall Street firms with much to cheer about on multiple fronts. In late May, the Sallie Mae board of directors authorized newly appointed CEO John Remondi to press ahead with plans to split the company’s existing businesses into two publicly traded entities – a new education loan management firm, known as NewCo, and a consumer banking company, to be known as Sallie Mae Bank. The board’s stated intention with the move, talked about since at least as early as 2010, is...

Bank and thrift holdings of non-mortgage ABS declined slightly in the first quarter of 2013, but remained well above a year ago, according to a new Inside MBS & ABS ranking and analysis. Banks and thrifts held $163.7 billion of ABS in portfolio as of the end of March, off 0.5 percent from the previous quarter. But early 2013 holdings were up 9.0 percent from the first quarter of last year, including increases in most ABS categories. The call-report ABS data include...[Includes one data chart]

Ginnie Mae servicers reported a small increase in servicing volume during the first three months of 2013, with Ocwen Loan Servicing posting the largest gains from last quarter and from a year ago. Servicers held a total of $1.33 trillion in government-backed mortgage debt outstanding at the end of the quarter, up a notch from the fourth quarter and 8.2 percent more than the total Ginnie Mae servicing debt a year ago. Though Ocwen was fifth in the ranking with $36.08 billion, its servicing volume was up more than 1000 percent both from the last quarter and from the same period last year. Among the top Ginnie servicers, only ... [One chart]

A top official of the Department of Housing and Urban Development said the agency is as concerned as Congress and the industry about mortgages seized through the power of eminent domain and will not refinance any mortgage taken in this manner. Testifying at a recent hearing before the House Financial Services Subcommittee on Housing and Insurance, Charles Coulter, deputy assistant secretary for housing, said FHA leadership is very much concerned about the idea of seizing troubled mortgages held in private-label securitizations under the power of ...

The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...