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 ...

Wall Street has unveiled policy proposals calling for premium and guaranty fee adjustments and reduced loan limits for FHA and the government-sponsored enterprises to jump start the return of private capital to the U.S. housing market. The American Securitization Forum said the current level of government activity in the mortgage market is neither sustainable nor advisable. The government, through FHA, Fannie Mae and Freddie Mac, directly or indirectly guarantees 90 to 95 percent of new mortgage originations in the country, the trade association said. While everyone agrees the government’s role in housing should be reduced over the long term, there is ...

The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the department’s 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ...

Nonbank mortgage servicers continued surging into the top ranks of servicers during early 2013, more than doubling the size of their stake in the market compared to a year ago, according to a new market analysis and ranking by Inside Mortgage Finance. The seven largest nonbank servicers accounted for $1.40 trillion in mortgage servicing at the end of the first quarter, an increase of 68.9 percent in just three months. Compared to a year ago, the combined portfolio of these companies was up 144.3 percent. Ocwen Financial rose...[Includes one data chart]

The Vertical Capital Income Fund is a publicly traded mutual fund whose stated goal is to buy whole loans from banks and nonbanks, providing an attractive yield to its investors. But will it ever get around to securitizing its holdings? For now, the answer to that question appears to be no, but it’s something the fund is looking into. “Let’s put it this way; we’ve discussed the possibility,” said Richard Mason, vice president of secondary marketing for the company. Part of Vertical’s problem is...

Owner-occupants are driving increases in home prices and purchase activity, not institutional investors, according to Oliver Chang. The somewhat surprising conclusions from the founder and managing director of Sylvan Road Capital suggest that institutional investors are “along for the ride,” not propelling the current housing recovery. “The housing recovery appears to be broad-based and here to stay, although not because of the entrance of institutional investors into the space,” Chang said. He completed...

Bank of America agreed this week to pay $500 million to settle lawsuits from investors in non-agency mortgage-backed securities issued by Countrywide Financial in 2005 through 2007. If it receives judicial approval, the settlement on about $15.0 billion in non-agency MBS will be the largest-ever non-agency MBS class-action recovery. “After five years of hard-fought litigation, this record-breaking recovery is a tremendous result for MBS investors misled by Countrywide and ...

Ginnie Mae is seeking feedback from dealers, issuers and investors about whether to continue to maintain two separate mortgage-backed securities programs or to consolidate them under a single security. Comments are also being sought on other possible options. Bloomberg.com recently reported that Ginnie Mae sent out questionnaires to Wall Street broker-dealers for their input on the future of both the Ginnie Mae I and Ginnie Mae II MBS programs. The agency has been considering whether it should merge the programs for some time. The Ginnie Mae I single-issuer pool program with stringent pooling requirements began in ...

No one is suggesting that Wells Fargo will begin lopping off large chunks of its $1.9 trillion residential servicing portfolio in a fashion similar to what Bank of America has done the past two years, but clearly selling mortgage servicing rights is on its to-do list. The big question is how much Wells Fargo is willing to part with. The bank declined to discuss the matter with Inside Mortgage Finance, but confirmed that it seeks to hire what it calls a “project manager” to oversee the effort. A spokeswoman for Wells downplayed the significance of the hire, saying the person who eventually joins the staff will be a “non-executive.” At least four servicing professionals said...

UBS Americas failed in its bid to shut down a lawsuit brought by the Federal Housing Finance Agency in connection with non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac, while in another case three former Freddie executives lost their own bid to dismiss a Securities and Exchange Commission securities fraud case against them. The Second Circuit Court of Appeals last week upheld a lower court’s ruling that denied UBS’ motion to dismiss the FHFA’s suit as time barred. In the summer of 2011, the FHFA filed 18 lawsuits in Manhattan federal court against UBS and other big banks on behalf of the GSEs, alleging violations of the federal Securities Act of 1933 for approximately $200 billion in non-agency MBS sold to Fannie and Freddie.