There is merit to a rule proposed this week by the Department of Housing and Urban Development to establish a maximum filing period for FHA claims, but the penalty for missing the new deadline may be excessive for the offense, according to industry participants. Under the proposed rule, the FHA insurance contract would be terminated if a lender fails to file a claim for a property acquired through foreclosure within three months from the date they obtain marketable title to the property or successfully sell the property to a third party. The requirement applies to both pre-foreclosure sale and deed-in-lieu-of-foreclosure. Although the proposal addresses problems caused by delayed multiple filings, lenders could still submit...

HUD issued the language to remedy the problem of delayed filings: lenders holding back claims...

The highest reading of the year came in January, $245.9 billion, a time when interest rates were still declining.

Since the housing crisis, the mass filing of claims has placed a huge strain on resources at the FHA.

Is the mortgage IPO market dead? Yes, says consultant Joe Garrett...

A more subtle version of looking at redlining is becoming a major focus in fair-lending analysis, according to industry experts participating in a recent webinar sponsored by Inside Mortgage Finance. The Home Mortgage Disclosure Act was created in 1974 largely as a tool to fight discriminatory redlining, a practice named for maps that some lenders developed that literally outlined in red the parts of the market where they would not do business. HMDA’s focus on mapping…

Residential MBS production continued to gain speed in the second quarter of 2015 while non-mortgage securitization remained strong, according to a new Inside MBS & ABS analysis. A total of $419.42 billion of single-family MBS and non-mortgage ABS were issued during the second quarter, an increase of 21.2 percent from the first three months of the year. It was the strongest new issuance total since the third quarter of 2013 and marked the fifth straight quarterly increase since the market hit a cyclical low at the beginning of last year. Most of the gain came from the agency MBS sector, which totaled $352.73 billion in new issuance, a gain of 29.7 percent from the first quarter. All three agencies posted hefty gains, with the biggest coming at Ginnie Mae, where new issuance jumped 46.7 percent to hit $120.36 billion. A lot of Ginnie’s growth is coming from an unusual surge of refinance activity, which accounted for ... [ charts]

Clean-up calls executed by U.S. Bank on Ginnie Mae real estate mortgage investment conduits in recent years have caused problems for some investors, but industry analysts suggest that overall, the risk agency MBS investors face from clean-up calls is limited. Analysts at Performance Trust Capital Partners, an investing firm, warned recently that U.S. Bank has made about $53 million in profit the past three years by completing clean-up calls on Ginnie REMICs where the bank was the trustee. On Ginnie REMICs, trustees are allowed to complete clean-up calls when the outstanding balance on the security falls to less than 1.0 percent of the aggregate of the original class principal balance for the security. When executing a clean-up call, the trustee pays off the investors in the MBS at par. On Ginnie deals where U.S. Bank has completed clean-up calls, the REMICs have generally been trading at ...

The report from Potomac Partners bears the good news about FHA...

The FHA is either close to achieving full recovery or nearing collapse and needing a potential taxpayer bailout, depending on which of two opposing views is more persuasive. The conflicting views stem from the latest analyses of the FHA’s health conducted by Potomac Partners, a mortgage industry consultancy, and the American Enterprise Institute’s International Center on Housing Risk. Both reports looked into FHA risk, mortgage performance, delinquency rates ...