Congress and the FHA should avoid undertaking policy changes that would further weaken the agency’s ability to cover insurance losses and potentially lead to another taxpayer bailout, according to a recent analysis by The Heritage Foundation. THF analyst John Ligon and Norbert Michel, a research fellow, said FHA policy reforms should ensure that the agency maintains a limited role in the housing finance system. FHA should make way for private capital to enter the market and serve the housing needs of American households, they added. FHA can accomplish such policy goals by lowering its loan limits and adequately pricing insurance for borrower risk, the analysts said. In addition, Congress should ensure that FHA borrowers are required to maintain mortgage insurance over the full life of the loan as required currently by the Department of Housing and Urban Development, said ...
PennyMac no longer requires tax transcripts, or IRS Form 4506-T, for delegated FHA and VA programs despite its continuing concerns over income fraud. The lender announced the new guidance on Nov. 13, 2017, and it took effect immediately. It applies to borrowers of FHA, VA and government-sponsored enterprise loans who qualify solely with W-2 wage-earner income and/or fixed income reported on a 1099 form. Meanwhile, tax transcripts will continue to be required for all loan applicants where tax returns are required to document qualifying income and income sources for non-delegated, US Department of Agriculture rural-housing and jumbo loans, said PennyMac. Such requirement includes but is not limited to self-employed borrowers, those earning commissions greater than 25 percent of income and borrowers working for family. The tax transcript requirement may be ...
House Passes Flood Insurance Bill. On Nov. 14, the House of Representatives passed on a vote of 237 to 189 H.R. 2874, the 21st Century Flood Reform Act, which would reauthorize the National Flood Insurance Program for five years. The program expires on Dec. 8, 2017. In addition, the bill would make changes that would allow private companies to sell not only NFIP coverage but to write and offer their own flood insurance policies as well. The Senate is still negotiating the terms of its own flood insurance bill. Northwest Trustee Sued for Illegal Foreclosure of Servicemembers’ Homes. The Department of Justice is seeking, among other things, monetary damages and civil penalties against a foreclosure trustee for allegedly foreclosing on homes of active members of the US military without proper court order. In a lawsuit filed Nov. 9 in U.S. District Court for the Western District of Washington, the ...
The Mutual Mortgage Insurance Fund’s economic net worth and capital reserve ratio declined in fiscal year 2017 due to losses in the FHA Home Equity Conversion Mortgage portfolio caused by rising claims, according to the agency’s annual report to Congress released this week. While the fund remains above its minimum capital level, both the economic net worth and the capital ratio fell from levels at the end of fiscal 2016, the report said. Specifically, the fund’s…
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