S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2014, would decrease federal deficits by a total of $58 billion from 2015 to 2024, according to the Congressional Budget Office. The Senate Committee on Banking, Housing, and Urban Affairs approved the legislation to reform the government-sponsored enterprises earlier this year but the full Senate has yet to consider the bill and there is little support for the legislation in the House.

The FHA Mutual Mortgage Insurance Fund account balances fell by $0.5 billion during the second quarter of 2014 to $45.3 billion due to higher claim payments and property expenses. Observers, nonetheless, remain optimistic the fund will return to full stability in 2015 with no further change in the mortgage insurance premium charged to borrowers. The MMIF’s total balances peaked at $48.4 billion in the third quarter of 2013 and then slipped gradually over the last three quarters, according to data in the FHA’s latest report to Congress regarding the financial health of the Mutual Mortgage Insurance Fund. Total revenues from premium collections, property sale, and note sale proceeds were $4.3 billion, while $5.1 billion was paid to cover claims and property expenses in the second quarter. This resulted in a negative$821 million cash flow in the quarter, the smallest outflow since ...

The average FHA credit score in the second quarter of 2014 continued to decline from the record highs of 2011, but remains well above the levels preceding the mortgage and credit crisis, according to FHA’s latest report to Congress on the state of the agency’s Mutual Mortgage Insurance Fund. The FHA’s second-quarter average credit score of 680 was 3 points below the previous quarter’s score and 13 points below the score during the same period last year. The report’s data suggest that FHA has accomplished its goal of shifting its market share to the 620-679 credit score bucket consistent with its target market while ceding its share of loans with scores exceeding 720 to the private MI sector. The last time borrowers’ average credit score hit 680 was in the second quarter of 2009. FHA officials said they are working to have 75 percent of the FHA lending in the ...

FHA single-family loan production picked up in the second quarter thanks to a surge in fixed-rate mortgage lending, according to an Inside FHA Lending analysis of agency data. A 15.2 percent increase in FHA fixed-rate volume helped propel overall FHA originations in the second quarter, which rose 16.0 percent from the first quarter. Adjustable-rate lending also was up 32.3 percent over the same period. FHA purchase originations increased 20.6 percent, while FHA-insured refinances rose by only 4.3 percent. On the other hand, conforming-to-FHA refinances were down 4.5 percent from the first quarter. FHA baseline lending (below $417,000) saw volume rise 17.6 percent, while FHA-jumbo loan amounts up to the statutory high-cost loan limit increased by 6.2 percent. On the other hand, the volume of jumbos exceeding ... [1 chart]

The volume of mortgages subserviced for others declined slightly in the second quarter, but still face bright prospects as many firms contemplate outsourcing the processing chore to specialists that can effectively handle an increasing array of compliance regulations. The nation’s three largest subservicers – Dovenmuehle, Cenlar and PHH Mortgage – had a combined subservicing market share of 55.8 percent at June 30, dominating the sector, according to exclusive survey figures compiled by Inside Mortgage Finance. On a sequential basis, Dovenmuehle grew...[Includes one data chart]

Lenders financed $11.9 billion of conforming-jumbo mortgages – loans greater than $417,000 – through Fannie, Freddie and the FHA during the second quarter.

Non-agency jumbo mortgage originations accounted for a historically high 19.4 percent of new lending during the first half of 2014, and the sector is steadily gaining ground, according to a new Inside Mortgage Finance analysis of big-ticket mortgage activity. During the second quarter of 2014, lenders originated an estimated $59.0 billion of mortgage loans that were too big to be financed through Fannie Mae, Freddie Mac or the FHA. That was up 34.1 percent from the first quarter, a noticeably bigger increase than the 25.5 percent jump in total mortgage originations for the period. Compared to last year, jumbo lending was...[Includes three data charts]

The Federal Housing Finance Agency should abandon its proposed increase in guaranty fees charged by Fannie Mae and Freddie Mac, according to a number of industry groups. The Mortgage Bankers Association said in a comment letter that it opposes hikes in g-fees and loan-level price adjustments, noting that g-fees have become attractive to Congress as cash cow means for funding non-housing programs. “Clearly, the GSEs were undercapitalized...

The Federal Housing Finance Agency appears to be all alone – for now – in its effort to prevent nonbanks from gaining access to the Federal Home Loan Bank system by using a captive insurance affiliate. The proposal would also change FHLBank membership rules for depository institutions. But already the proposed ban – issued for a 60-day comment period early last week – is coming under heavy fire from different factions of the mortgage industry, including the Council of Federal Home Loan Banks, real estate investment trusts and private-equity firms that own REIT stock. David Jeffers, executive vice president for the Council, said “widespread calls” for the comment period to be extended are...

Concern about government-proposed capital rules for private mortgage insurers and their potentially negative effect on MI premiums has prompted loan guarantors and others to call for changes. The Mortgage Bankers Association, National Association of Realtors and several private MI companies have urged the Federal Housing Finance Agency to ease proposed capital requirements for private MIs. As written, the proposed rules could cause MI premiums to spike, making it more difficult for first-time homebuyers to purchase a home and for MIs to maintain market share, they warned. The draft Private Mortgage Insurer Eligibility Requirements (PMIERs) is...