Mel Watt has quickly endeared himself to lenders, home builders and Realtors by delaying (scrapping?) Ed DeMarco's g-fee hike. As for Mr. DeMarco...

Jeff Detwiler, president and chief operating officer of Long & Foster Companies, noted that that higher interest rates are playing a “big role” in the lower home sales realtors are seeing in the Washington DC metro area.

The former House Democrat has already halted – for now – certain DeMarco-era directives, including the FHFA’s December announcement of a 10-basis point guaranty fee increase.

The FHA reviewed 6,692 government-insured loans between July 1 and Sept. 30, 70 percent of which were home-purchase loans.

Through the first nine months of 2013, an estimated 22 percent of the $1.59 trillion in mortgages originated (including second liens) had non-agency execution.

FHA and VA loans backing Ginnie Mae pools in 2013 showed an average mid-range FICO score of 693, lower debt-to-income ratio and an average loan size of $187,268, confirming strict underwriting in both government programs, according to an Inside FHA Lending analysis of Ginnie Mae loan-level disclosures. Issuers securitized $370.4 billion of mortgages with first payment date in 2013 through November. Loan characteristics exclude loans with no information reported.

Approximately 48 percent of FHA loans that underwent post-endorsement review by the FHA in the third quarter of 2013 received an “unacceptable” rating – a commonly high percentage of deficient FHA-insured loans that lenders could lower through mitigation. The FHA reviewed 6,692 FHA-insured loans between July 1 and Sept. 30, 70 percent of which were home-purchase loans, 25 percent streamline refinancings, and 5 percent rate and term refis. Of the total loans analyzed, 36 percent had certain deficiencies, 19 percent showed early payment default (EPD), and only 16 percent met FHA underwriting standards, according to the agency’s latest report on loan-file review findings.

FHA lenders will soon be adjusting to changes aimed at improving and streamlining the agency’s annual recertification process. Effective in April, the FHA will implement a series of system enhancements, including replacing its Lender Assessment Sub-System (LASS) with the Lender Electronic Assessment Portal (LEAP), formerly known as “HUD/FHA Lender Approval Files.”

Recent announcements of revised loan-level price adjustments for the government-sponsored enterprises and risk-based pricing are fueling fears of FHA resurgence in the market. Consistent with the Federal Housing Finance Agency’s stated intent to raise the GSE guaranty fees by about 11 basis points, Fannie Mae and Freddie Mac released revised loan-level price adjustments (LLPAs) on Dec. 16. The upfront fee hike takes mortgage rates for affected borrowers close to FHA pricing levels, according to industry analysts.

The Federal Housing Finance Agency said in December that it would wait until at least October before setting new “purchase limits” for Fannie Mae and Freddie Mac. The regulator of the two government-sponsored enterprises is considering establishing purchase limits below the statutory conforming loan limits. In the highest-cost markets, the biggest loan the GSEs could buy would be $600,000, instead of $625,500. The national purchase limit would be $400,000, roughly 4 percent below the $417,000 conforming ...