The Department of Agriculture’s Rural Housing Service (RHS) has issued a final rule implementing a new statutory definition of “rural” or “rural area” that could mean increased origination of rural home loans with a USDA guarantee. The Agricultural Act of 2014, also known as the 2014 Farm Bill, mandated the change. Being a statutory requirement, no public comment was sought for the final rule. According to the statute, an area that has a population of more than 10,000 but not exceeding 35,000, and is rural in character and seriously lacks mortgage credit is a “rural area.” The new definition applies to areas deemed rural before Oct. 1, 1990, and later determined not to be rural after the 1990, 2000 or 2010 census and any area deemed rural anytime between Jan. 1, 2000, and Dec. 31, 2010. They will retain eligibility until the receipt of the ...

Production of FHA-insured jumbo loans ballooned in the third quarter of 2014 reflecting heightened activity in this loan segment during the period. A 23.7 percent quarter-over-quarter surge helped push FHA jumbo lenders’ total volume to $7.71 billion at the end of the nine-month period ending Sept. 30. It was a significant increase for a segment that represents only a sliver of FHA’s overall business. However, compared to last year’s first nine months, volume was down by almost half (48.8 percent) as lenders struggled to keep pace with last year’s output. Strong purchase demand helped drive FHA jumbo originations (all FHA loans over $417,000 up to $625,500 in high-cost areas), as purchase mortgages accounted for 81.1 percent of all FHA jumbos originated during the first nine months of the year. Fixed-rates comprised 86.4 percent of FHA jumbos originated during ... [1 chart]

Ocwen Financial’s dry spell of acquiring nonperforming FHA loans out of Ginnie Mae mortgage-backed securities pools ended in early December with the nonbank servicing giant buying $253.1 million of delinquent product. Speculation, however, is mounting that Ocwen may not be long for the Ginnie Mae business, at least as a servicer. Ocwen’s disclosure of the “early” FHA buyouts came 11 days after it sold to an undisclosed buyer. In the first quarter, the company engaged in $646 million of early buyouts (EBO) and followed up with a $490 million EBO deal in the second quarter. However, EBO volume fell to zero in the third quarter. The December acquisition came in one fell swoop raising cautious, short-term expectations at Ocwen. “We expect to execute more such purchases in the next few months, as long as market conditions are favorable,” said Chief Investment Officer John Britti. As fast as it had ...

The Mortgage Bankers Association this week declined to participate in a panel discussion on FHA hosted by the American Enterprise Institute because the trade group did not believe the discussion would be balanced and though it would favor only a certain point of view. The topic was “FHA from 1934 to 1938: Lessons for Wealth Building,” with Ed Pinto, a resident fellow at AEI, and Dave Stevens, MBA president, as presenters. Stevens, however, decided to pull out of the event when he saw the format. In a letter to the AEI organizers, Stevens said he agreed to be a presenter thinking the debate “would be a balanced approach.” “When I first agreed to do this, I did not expect that the format would be 45 minutes of [Ed Pinto] and then no more than 12 minutes for me to respond,” he wrote. “That’s an extremely lopsided approach that did not appear to be ...

Proposed Data Collection for Evaluating Impact of Pre-Purchase Homeownership Counseling. The Department of Housing and Urban Development has asked the Office of Management and Budget to clear a proposal to collect information for a national study that would gauge the effectiveness of pre-purchase homeownership counseling. Rather than individual telephone interviews, the study plans to conduct focus groups and to collect data regarding the characteristics and performance of participants’ mortgage loans, even after the end of the study. The information collection will involve an estimated 6,000 borrower-participants, 1,800 co-borrowers, 64 counseling organizations and three FHA lenders. The study will be conducted in three cities at a cost of approximately $521,830. The proposal will be published in the ...

On the supply side, there were $5.63 trillion of single-family MBS guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae outstanding at the end of September.

President Obama this week signed a comprehensive package of spending bills, providing funding to federal agencies through fiscal 2015 but missing two initiatives that would have toughened FHA enforcement and benefited new homeowners through enhanced housing counseling. The FY 2015 Consolidated and Further Continuing Appropriations Act is comprised of 11 funding bills for all federal agencies, including the Department of Housing and Urban Development. The bill provides...

When settlements are first reported rarely does the money change hands right away.

Ocwen also did not disclose what it paid to acquire the nonperforming loans or who the buyer was.

The City of San Francisco has delayed a proposed partnership with Richmond, CA, to use eminent-domain authority to forcibly acquire distressed mortgages out of non-agency securitization trusts, opting instead to study the impact of such an agreement as well as other alternatives to assist underwater homeowners. Opposition by the San Francisco City Controller and the mortgage banking industry has forced John Avalos, a member of the city’s Board of Supervisors, to scale back his partnership proposal. Avalos laid out...