Six months after non-agency servicers were able to offer expanded loan modification options under the Home Affordable Modification Program, only 331 of such “Tier 2” mods had been completed, according to the Treasury Department. Industry analysts suggest that HAMP will fall well short of the Treasury’s volume goals when the program expires at the end of this year, possibly due to noncompliance by servicers. HAMP Tier 2 was announced in January and effective June 1, though not all non-agency HAMP servicers ...
The Federal Housing Finance Agency and General Electric this week settled a lawsuit filed by the FHFA in 2011 regarding $549.0 million in non-agency mortgage-backed securities purchased by Freddie Mac. The settlement is the first on the FHFA’s 18 pending non-agency MBS lawsuits. The terms of the settlement were not disclosed. Residential Capital agreed to pay $297.6 million to Fannie Mae this week, prompting the government-sponsored enterprise to drop its objection to ResCap ... [Includes four briefs]
Mortgage bankers funded $232.69 billion worth of FHA loans in 2012, a 22 percent jump from the year prior, but the improvement pales in comparison to business gains experienced by Fannie Mae and Freddie Mac, according to exclusive loan-level data compiled by Inside FHA Lending. By comparison, Fannie grew its business by almost 46 percent last year with Freddie improving loan purchases from seller/servicers by 49 percent. Still, it was FHA’s best quarterly showing ($64.03 billion) since the fourth quarter of 2010 when mortgage lenders originated $72.12 billion of product. And not surprisingly, consumers taking out FHA loans ... [2 charts]
Poor oversight and monitoring have allowed certain borrowers with Home Equity Conversion Mortgage loans to illegally rent their properties to participants in the federal government’s Section 8 housing choice voucher program, according to the Department of Housing and Urban Development’s Office of the Inspector General (OIG). The second of two OIG audit reports on HUD’s oversight of the HECM program has concluded that department policies did not always ensure that borrowers complied with the program’s residency requirements. The audit found that 37 out of 174 HECM borrowers reviewed were ...
The Department of Housing and Urban Development is investigating reports that a loan officer of an approved FHA lender had participated in a reverse mortgage borrower’s counseling session, a practice HUD frowns upon but does not directly prohibit. A HUD representative declined to provide details but acknowledged that the report was part of informal discussions between department officials and stakeholders. “That information … has not been officially released in any form,” he said. “Once the details are finalized, we will be advising stakeholders.” The National Reverse Mortgage Lenders Association posted the ...
The non-agency jumbo MBS market in 2012 posted its best year since the cratering of the U.S. housing market and financial market collapse back in 2008, and increased regulatory clarity may spur the recovery further in 2013. A total of $3.46 billion of non-agency jumbo MBS were issued last year, according to a new ranking and analysis by Inside MBS & ABS. In the pre-crash years, that level of issuance didn’t add up to a decent week in productivity. But last year’s prime non-agency MBS issuance was...[Includes three data charts]
The ability-to-repay “qualified mortgage” final rule released last week by the Consumer Financial Protection Bureau will likely impair access to and the cost of jumbo and nonprime mortgage loans, in spite of the market clarity and certainty it provides, according to many market observers. Wall Street MBS analyst Laurie Goodman and the rest of her MBS strategy group at Amherst Securities said the implications for jumbo mortgage is that loans with debt-to-income ratios greater than 43 percent will not be made by most lenders, as these mortgages will not qualify for QM status. “The penalties for making non-QM mortgages can be...
Moody’s Investors Service recently implemented a significant overhaul of its methods for assessing servicers of non-agency MBS, replacing criteria issued in 2001. Among other changes, the new standards expand the data sources Moody’s will look at to include more timely figures from trustees and servicing performance for the government-sponsored enterprises. The analysis by Moody’s includes monthly loan-level data from the servicer if provided on a timely basis, monthly performance data from the trustee when available, and GSE servicing data as needed. Previously, the rating service largely relied on loan-level portfolio data from servicers. “The trust data is...
A number of rules from federal regulators in the past two weeks aim to tighten standards for nonprime mortgage lending, including requirements for ability to repay, appraisals and escrow accounts. Industry analysts suggest that the standards would have limited subprime mortgage lending during the boom of 2005, but those markets were dried up long before the new rules will take effect. In setting new rules for the nonprime market, federal regulators have established criteria for “higher-priced mortgage loans.” First-lien HPMLs are those with an annual percentage rate of at least 1.5 percentage points above the “average prime offer rate” for similar loan types, and more than 3.5 percentage points for junior-lien HPMLs. Some $12.38 billion in higher-priced mortgages were sold...
The CFPB has issued a final rule that increases Home Ownership and Equity Protection Act coverage for mortgages with high interest rates, fees or prepayment penalties. The rule expands HOEPA to cover home]purchase loans and home equity lines of credit; revises the lawfs rate and fee thresholds for coverage; and adds a new coverage test based on a transactionfs prepayment penalties. The final rule implements the Dodd-Frank Actfs revisions to HOEPAfs coverage tests by providing that a transaction is a high-cost mortgage if any...
RSS