FHA mortgage delinquency rates trended lower in the fourth quarter of 2012 as did the foreclosure rate – signs that the housing market recovery may be on track finally. An Inside FHA Lending analysis of top FHA servicers’ portfolios showed a modest drop in the overall past-due rate in the fourth quarter to 16.87 percent from 17.45 percent in the previous quarter. This includes loans that are 30-60 days delinquent as well as 90-day + delinquent. As of Dec. 31, FHA servicers held a total of 7.65 million loans in their portfolios, of which 2.87 percent were in some stage of foreclosure, down from 3.07 percent in the third quarter. Of that total number of FHA loans, 7.39 percent were ... [chart]

The Department of Housing and Urban Development said it will share information soon on the estimated impact of mandatory, across-the-board spending cuts on HUD/FHA programs and their recipients. A HUD spokesman declined to put a sequestration tag on all affected programs, including FHA, saying details would be available as soon as the department notifies all HUD funding recipients of automatic spending cuts that went into effect last week. The mandatory cuts to defense and discretionary spending kicked in after Congress failed to enact a plan to reduce the deficit by $1.2 trillion over 10 years, as required by ...

The recent increase in mortgage insurance premium (MIP) and other policy changes to strengthen the FHA Mutual Mortgage Insurance Fund are causing borrowers with better credit to shift from FHA to conventional financing, according to a new Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The monthly survey of real estate agents found that FHA remains an option for borrowers who have limited cash resources and tainted credit. However, given their individual circumstances and FHA’s recent policy changes, many would take out a conventional loan if they could qualify. With a low 3.5 percent downpayment requirement, FHA appears to ...

Expressing its views and estimates for the Fiscal Year 2014 budget, the House Financial Services Committee remains concerned that the FHA has not fully exercised its powers to protect its mortgage insurance fund and urged the agency to begin charging additional user fees to strengthen its financial footing. Apparently, there is a hitch in that proposal. It seems the Department of Housing and Urban Development does not charge user fees and to do so would probably need clear authorization from Congress, said a HUD spokesman. It is not clear what the committee meant by ...

Banks with major Ginnie Mae portfolios – and even smaller firms – increased their purchases of delinquent mortgages out of MBS pools in the fourth quarter compared to the third as a way to save money and refinance troubled loans. According to an analysis by Inside FHA Lending, the top 50 Ginnie Mae issuers bought $12.65 billion of problem loans out trusts in fourth quarter compared to $11.17 billion in the third, an increase of 13 percent. “Once you buy the loan it goes into your portfolio,” said Tim Rood, a partner in The Collingwood Group, a Washington-based advisory firm. “You can try to re-perform it and then re-securitize it,” he said. Wells Fargo, the largest Ginnie Mae servicer in the nation with a portfolio of $412 billion, purchased ... [1 chart]

The reverse mortgage lending industry has asked Senate lawmakers to expand the Department of Housing and Urban Development’s authority to strengthen its oversight of the Home Equity Conversion Mortgage program. Testifying before the Senate Committee on Banking, Housing and Urban Affairs recently, Peter Bell, president of the National Reverse Mortgage Lenders Association, said it is crucial for HUD to be able to act swiftly to reduce the risk the program poses to the FHA insurance fund. Bell said HUD needs to implement changes “in a matter of months, not years” and for that to happen, it would need authority from Congress to ...

Reverse Mortgage Solutions, a HECM lender bought by Walter Investment Management Corp. last fall, has received a $100 million warehouse line of credit from Royal Bank of Scotland, according to a new filing with the Securities and Exchange Commission. The line is legally structured as a master repurchase agreement. However, it is also considered “uncommitted” and matures in February of 2014. RMS will use the money to fund new originations of HUD-backed home equity conversion mortgages. Several of the nation’s largest banks have exited the HECM space the past two years, including Wells Fargo and Bank of America. A handful of nonbanks have moved ...

It’s far from over, but the years-old plague of mortgage buybacks may be slowly winding down. A new Inside Mortgage Finance analysis of bank call reports reveals that banks and thrifts repurchased “only” $2.97 billion during the fourth quarter of 2012. That was down 2.1 percent from the third quarter, but it marked the fifth straight quarterly decline and it was the lowest level since the second quarter of 2009. It brought total repurchases on single-family mortgages, which include indemnifications, to $13.97 billion for all of 2012, a decline of 33.3 percent from the previous year. It was the lowest annual repurchase volume since 2008. An earlier Inside Mortgage Finance analysis of repurchase disclosures made by Fannie Mae and Freddie Mac showed...

Freddie Mac ended 2012 with its single best quarterly showing since the company was placed into government conservatorship by the Federal Housing Finance Agency at the height of mortgage market implosion 4½ years ago. The GSE late this week posted fourth quarter net income of $4.5 billion. Compared to the third quarter’s earnings of $2.9 billion, profits grew by 55 percent, the company noted in its Securities and Exchange Commission filing.

Mortgage banking operations owned by banks and thrifts – and that’s most of them – posted their most profitable year ever in 2012, but the tide clearly appeared to be turning in the fourth quarter. A new Inside Mortgage Trends analysis of call report data shows that banks reported a whopping $31.925 billion in non-interest income from their mortgage banking operations. That was more than six times the $5.240 billion they earned back in 2011, a year when industry-wide results were ... [Includes one data chart]