Home Equity Conversion Mortgage lenders may now use certain financial assessment criteria in qualifying consumers for a HECM loan prior to FHA’s publication of its own guidance. Officials from the Department of Housing and Urban Development broke the news during the recent National Reverse Mortgage Lenders Association annual conference in Boston. They said the new underwriting assessment tool would help ensure borrowers can pay required taxes and insurance on their homes. The notification followed the unveiling of the NRMLA’s recommended underwriting guidance. In a previous email notice to industry participants, Acting Assistant Secretary of Housing/FHA Commissioner Carol Galante indicated that ...

Redwood Trust took a loss on the $375.2 million jumbo mortgage-backed security it issued at the end of September, officials at the real estate investment trust revealed this week. However, the company plans to issue another jumbo MBS within the next few months and anticipates turning a profit on its non-agency activity in the long-term. ...

Ocwen Financial’s pending purchase of subprime servicer Saxon Mortgage is just the latest growth spurt for the firm. “We are looking at other transactions as we speak,” William Erbey, chairman of Ocwen, said last week on a call with investors. Even with the Saxon deal, Erbey said Ocwen’s pipeline of potential acquisitions increased in the third quarter of 2011 compared with the previous quarter, to more than $300.0 billion in unpaid principal balance. ...

Prospects for a return of elevated conforming loan limits remain unclear after the Senate approved a reinstatement provision in an appropriations bill in October. Most conservatives in the House remain strongly opposed to the reinstatement – which would likely delay the return of the non-agency market. More than 30 percent of members of the House support a temporary reinstatement of elevated conforming loan limits, according to a letter sent to House leaders this week. ...

The stellar returns on non-agency mortgage-backed securities purchased via the Public-Private Investment Program have faltered this year, prompting some to call for a revamp of the program. Invesco – the fund that has seen the most success with the PPIP – also recently announced that it quit the program after having difficulties finding appropriate investments. ... [includes one data chart]

A new regulatory regime for non-agency securitization proposed last week by Rep. Scott Garrett, R-NJ, has attracted some support from non-agency mortgage-backed security issuers. However, the Private Mortgage Market Investment Act, which is aimed at reviving the non-agency market, also faces some bipartisan opposition. “This legislation, along with regulatory plans to ‘level the playing field,’ could spur a broad resurgence of the private MBS market in the short-term, for the benefit of homeowners, lenders, and investors,” said Martin Hughes, president and CEO of Redwood Trust, at a hearing this week by the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. ...

The 14 servicers operating under consent orders with federal regulators started their independent foreclosure review programs this week. The consent orders and Home Affordable Modification Program guidelines each contained single point of contact requirements, with varying degrees of guidance. At the Mortgage Bankers Association’s recent annual conference in Chicago, Diane Pendley, a managing director at Fitch Ratings, said servicers have implemented SPOC guidelines in at least eight different ways. ...

“We have to reduce uncertainty to bring private capital back,” Shaun Donovan, secretary of the Department of Housing and Urban Development, said at the Mortgage Bankers Association’s annual convention last week in Chicago. Industry participants remain divided on if or when non-agency securitization will resume in a significant manner. Daniel Arrigoni, president and CEO of U.S. Bank Home Mortgage, said U.S. Bank and other lenders must think about developing non-agency securitization capabilities as the federal government works toward reducing its involvement in housing finance. ...

A regulatory scare from the Securities and Exchange Commission may end up being much less of a challenge for real estate investment trusts than the stiff competition they face from bank portfolios, according to experts at the ABS East conference sponsored by Information Management Network this week in Miami Beach, FL. In September, the SEC rattled the mortgage REIT sector – which has struggled to gain a foothold in the nonconforming mortgage market – by launching a formal fact-finding mission on maintaining the exemption REITs enjoy from the Investment Company Act. ...

The lower loan limits instituted this month for conforming mortgages opened a number of regional opportunities for non-agency lenders. As of Oct. 1, 250 counties have lower government-sponsored enterprise loan limits compared with the conforming loan limits of 2010, according to an analysis by affiliated publication Inside Mortgage Finance. Michael Fratantoni, vice president of single-family research and policy development at the Mortgage Bankers Association, said the portion of the market newly eligible only for non-agency financing is significant in comparison to the amount of non-agency jumbo originations in recent years. ... [includes one data chart]