Stakeholders voiced support for an FHA proposal to revive the agency’s single-unit approval policy for condominium financing but differed on owner-occupancy requirements. Both items are part of a proposed rule which would give the FHA more wiggle room in formulating its condo rules. The proposed rule’s 60-day comment period ended on Nov. 28. Among other things, the FHA is proposing to reinstate “spot approval” financing on individual units in condo projects that are not currently approved for FHA insurance. The Department of Housing and Urban Development terminated single-unit approvals a few years ago in favor of mandatory condo-project approval. Ultimately, the current approval process proved to be more cumbersome, resulting in many condo projects opting out of FHA. Under the proposed rule, single-unit approvals are limited to a maximum of 20 percent of the units in the ...

The Department of Housing and Urban Development has expressed concern about the inspector general’s decision to withhold its opinion on the results of FY 2016 audits of HUD and Ginnie Mae. In its audit report, the HUD inspector general said it has issued a disclaimer of opinion on HUD’s fiscal years 2016 and 2015 (restated) consolidated financial statements because of the agency’s failure to deliver both statements and their accompanying notes in a timely manner. In addition, there were several unresolved audit matters from past audits that prevented the IG from completing an examination of HUD’s and Ginnie Mae’s accounts and rendering an opinion. These unresolved matters related to a number of things, including the Office of General Counsel’s refusal to sign a management representation letter, HUD’s improper use of budgetary accounting methods, and the $4.2 billion in ...

US Court Issues Injunction on DOL’s Overtime Pay Rule. A federal judge in Texas granted states’ motion to block the Department of Labor’s controversial overtime pay rule set to take effect on Dec. 1, 2016. In late breaking news, the Department of Justice said it will appeal the injunction. The decision handed down by Judge Amos Mazzant of the US District Court for the Eastern District of Texas would deprive approximately 4.2 million workers who stand to benefit from the rule. Twenty-one states, a coalition of business organizations and the Plano Chamber of Commerce challenged the rule in separate amici briefs, arguing they stand to lose money if the final rule takes effect. The final rule would require employers to pay a higher salary level for certain employees to be exempt from overtime. In addition, it would automatically update the minimum salary level every three years. In his decision, Mazzant determined that ...

Third-party originator channels posted relatively large gains in production volume during the third quarter of 2016, according to a new analysis and ranking by Inside Mortgage Finance. An estimated $244.0 billion of first-lien mortgages were originated by correspondent sellers and mortgage brokers during the third quarter, up 16.2 percent from the previous period. The bigger gain was in the correspondent channel, where production jumped 16.4 percent during the third quarter, several points higher than the 13.7 percent increase in total first-lien originations. Retail remained...[Includes four data tables]

Commercial bank and savings institution holdings of non-agency ABS fell again during the third quarter of 2016, marking the 11th consecutive quarterly decline in the industry’s investment in the sector, a new Inside MBS & ABS analysis of call-report data reveals. Banks and thrifts held $128.55 billion of ABS on their balance sheets at the end of September, down 1.9 percent from the previous quarter. The industry’s aggregate ABS portfolio was off 8.8 percent from the same point in 2015. The ABS market itself shrank...[Includes two data tables]

Commercial banks and savings institutions recently wrapped up their best quarter in over a year in terms of mortgage-banking income, according to a new Inside Mortgage Trends analysis of call-report data. The industry racked up $5.18 billion in mortgage-banking income during the third quarter, a huge 44.6 percent increase over the three-month period ending in June. It was the best quarter in mortgage-banking income since the April-June cycle in 2015, when ... [Includes one data chart]

Bank mortgage repurchase activity rose again in the third quarter of 2016, although most of the increase is tied to Bank of America clearing up old buyback issues. Commercial banks and savings institutions reported $884.4 million in single-family mortgage repurchases and indemnifications during the third quarter. That was up 10.0 percent from the previous period and marked the third consecutive quarterly increase in repurchase activity ... [Includes one data chart]

A strong purchase market helped push FHA and VA originations in the third quarter of 2016, according to an Inside FHA/VA Lending analysis of agency data. FHA forward originations increased by 17.4 percent from the second quarter for a total of $72.3 billion. That brought total FHA-insured loans originated over the first nine months to $187.3 billion, up 3.9 percent from the same period last year. Purchase mortgages comprised 70.0 percent of FHA’s total origination over the last three quarters. Quicken Loans reported only a 3.3 percent increase in FHA originations in the third quarter but still managed to retain its top ranking with $10.8 billion in FHA originations in the first nine months of 2016. Freedom Mortgage worked extra hard, ending the nine-month period with $5.0 billion on the strength of refinances. Third-quarter originations were up 69.6 percent from the prior quarter, and up 51.4 percent for the ... [3 charts]

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...