Spot loans are currently prohibited, but the agency is said to be reevaluating the product because of reports of first-time homebuyers having difficulty in obtaining FHA financing for condo unit purchases and seniors seeking reverse mortgages to tap the equity in their units.
A potential conflict over funding of the FHA’s loan-quality improvement efforts and, possibly, of a pilot program that seeks to make broader use of housing counseling in FHA origination and servicing may be brewing as both the House and Senate moved towards finalizing their separate versions of fiscal 2015 appropriations for the Department of Housing and Urban Development. Last week, the Senate Appropriations Committee voted 29 to 1 to pass S. 2438, its FY 2015 HUD funding bill. Notably, it contains a provision authorizing HUD to charge and collect a new fee from FHA lenders in an amount of no more than 4 basis points of the original principal balance of mortgages originated by the lender that were insured during the previous fiscal year. According to the Senate provision, the new fee would be used...
The Federal Housing Finance Agency is set to take a comprehensive view of the impact any changes to the government-sponsored enterprises’ guaranty fees would have on the MBS market. Late last week, the regulator issued a “request for input” on the g-fees charged by Fannie Mae and Freddie Mac, prompting speculation that any changes to the fees won’t be implemented until 2015. The FHFA noted that the GSEs’ g-fees have increased from an average of 22 basis points in 2009 to 55 bps in 2013. The increases have been prompted by the FHFA along with Congress and changes made by the GSEs. Because of loan-level pricing adjustments – which in nearly all cases are rolled into the mortgage coupon – g-fees vary...[Includes one data chart]
WinWater Home Mortgage, a New York-based conduit managed by several Wall Street veterans, is ready to market its first jumbo MBS, but has also made inquiries about non-prime transactions as well, according to traders and lenders familiar with the company. WinWater plans to issue a $249.47 million jumbo MBS, according to a presale report released late this week by Kroll Bond Rating Agency. Not only is the bond WinWater’s first deal, it represents the first new issuance in the sector since late April when Credit Suisse came to market. The average combined loan-to-value ratio on the deal is...
The 16.4 percent increase was more likely due to the fact that a huge number of reverse mortgages closed in November and December but were not insured by FHA until January, said one lender.
In its largest settlement under the Real Estate Settlement Procedures Act against a company that is not a mortgage insurer, the CFPB ordered Alabama real estate company RealtySouth to pay a $500,000 civil penalty to settle claims it gave inadequate disclosures of its relationship with an affiliated title insurance company. The practices identified by the CFPB’s investigation illegally benefited TitleSouth, an affiliated company owned by the same holding company that owns RealtySouth, according to the bureau, and left consumers unaware of their rights to choose service providers during the home-buying process. “RealtySouth’s preprinted form purchase contracts, which its agents provided to homebuyers preparing to make an offer on a home, either explicitly directed...
MBS prices fell by roughly 100 basis points this week, but the downdraft could be short-lived thanks to the European Central Bank, according to MBS analysts and other market watchers. Late this week, the ECB cut its main interest rate to a record low 15 basis points, from 25 basis points. But in an unprecedented move, it also trimmed the interest rate it pays to banks on reserves to negative 0.1 percent. The move into negative rate territory is meant...
Endorsement of FHA-insured reverse mortgages rose in the first quarter of 2014, although lenders say it may just be trailing figures reflecting the lag time between closing and approval for FHA insurance. Home Equity Conversion Mortgage guarantees totaled $4.0 billion in the first quarter, up 16.4 percent from the end of the fourth quarter in 2013 and up 4.1 percent from the same period last year, according to Inside FHA Lending’s analysis of agency data. Home purchase accounted for 92.7 percent of HECM volume but only 14.5 percent were fixed-rate. Initial principal amount at loan origination totaled $2.4 billion. The 16.4 percent increase was more likely due to the fact that a huge number of reverse mortgages closed in November and December were not insured by FHA until January, said Josh Moran, vice president of wholesale lending at Live Well Financial. Some lenders who delayed reporting to ... [1 chart]
FHA lenders are generally supportive of the agency’s proposal to add a new method for evaluating lender performance but may request certain adjustments to ensure they are not at great risk for enforcement action, according to compliance experts. Lenders believe the proposal for an additional performance metric to supplement the lender compare ratio under the Credit Watch Termination Initiative is a positive step toward providing a more well-rounded analysis of a lender’s performance when the FHA is considering further action. “In and of itself, the proposal is not a panacea, but it is certainly a step in the right direction,” said Brian Chappelle, a mortgage industry consultant. The proposal reflects the FHA’s belief that a number of factors influence a lender’s performance, not just its compare ratio. The compare ratio compares a lender’s rate of early defaults and claims to those for ...
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