The sale of residential mortgage servicing rights (MSRs) tied to Ginnie Mae mortgage securities is gathering steam with a handful of large deals currently in the market. Bank of America recently held an auction for $22 billion of legacy Ginnie MSRs, according to investment bankers familiar with the offering. Final bids were being taken this week. A winner has yet to be declared. A spokesman for BofA told Inside FHA Lending that in general the bank does not comment on MSR sales, though it has made exceptions when unloading very large packages. Earlier this year, for example, it sold just over ...
Fannie Mae is lowering its maximum loan-to-value ratio to 95 percent come November, and there is speculation that the decision could force some of that business over to FHA. The policy change was confirmed by the GSE when it sent out an update to users of its automated processing program, Desktop Underwriter. It also means that mortgage insurers could lose business at a time when many have shown a new willingness to take on more credit risk amid improving delinquencies and earnings. Mark Goldhaber, a former executive at Genworth Financial, which owns an MI company, told ...
Cancelled Furlough Days. The Department of Housing and Urban Development has reduced the number of furlough days from seven to five days due to progress made in achieving the $69.6 million spending cuts mandated by sequestration. In this regard, previously scheduled furlough days of Aug. 16 and Aug. 30 are cancelled. As the end of FY 2013 approaches, HUD is making significant progress towards reaching its sequestration target, without needing additional furlough days, said Deputy Press Secretary George Gonzalez of HUD’s Office of Public Affairs. Government-wide automatic spending cuts became effective ...
The Department of Housing and Urban Development, as expected, recently asked a federal district court in Washington, DC, to stay further proceedings in American Insurance Association vs. HUD, a disparate impact case, while the Supreme Court of the United States considers Township of Mount Holly v. Mt. Holly Gardens Citizens in Action. “In substance, Mount Holly presents the same issue of statutory interpretation that plaintiffs seek to litigate in the above-captioned action: namely, whether a disparate impact theory...
FHA lenders have gradually stretched to originate loans for borrowers with more modest credit scores in recent quarters, although these borrowers typically are better positioned to keep up with their payments, according to an Inside FHA Lending analysis of data released by the agency. The average credit score for single-family loans endorsed in the second quarter of 2013 was 693 – the lowest such average in nearly four years. This is partly the result of a shift toward more purchase-money mortgages, which generally have ... [1 chart]
Parties to trustee lawsuits challenging a city’s use of eminent domain to deal with foreclosures are gearing up for a face-off at an injunction hearing Sept. 13 in federal district court in San Francisco. The city of Richmond, CA, the defendant in the lawsuit, has suffered setbacks in the last few days and has yet to make good on its threat to initiate eminent domain proceedings after investor trustees rejected its offer to purchase distressed mortgages for restructuring. Wells Fargo and Deutsche Bank, acting as trustees for a group of ...
Sen. Elizabeth Warren, D-MA, is asking the Department of Justice to explain why it failed to get “adequate” compensation from major mortgage servicers for fraud committed against the FHA. In an Aug. 21 letter to U.S. Attorney General Eric Holder, Warren raised concerns about the $225 million paid by five servicers last year to obtain releases from False Claims Act liability stemming from fraudulent mortgage insurance claims the servicers submitted to FHA and other agencies from 2008 to 2010. The FHA’s woeful financial condition led to legislative reform efforts, including the ...
The FHA is easing the waiting period and eligibility criteria for certain borrowers with previous bankruptcies, foreclosures, deeds-in-lieu of foreclosure and short sales who would like to purchase a home again. According to Mortgagee Letter 2013-26, borrowers who may be otherwise ineligible for an FHA-insured mortgage due to the agency’s required waiting period may now be able to apply for a new purchase mortgage loan because of the shortened waiting period and if they meet the criteria. This latest initiative to help borrowers whose credit had been impaired by the financial crisis is called ...
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