The reverse mortgage lending industry is working with the Department of Housing and Urban Development to implement two policy changes that would strengthen the FHA’s Home Equity Conversion Mortgage program. One policy change involves the development of a new HECM option that combines features of the fixed-rate, full-draw HECM Standard and the HECM Saver, according to Peter Bell, president and chief executive officer of the National Reverse Mortgage Lenders Association. HUD eliminated the standard 30-year, fixed-rate HECM in April because ...
Lenders must correct erroneous disclosures concerning mortgage insurance premiums (MIP) before submitting loans for FHA insurance, according to new FHA guidance. In an update to Mortgagee Letter 2013-04, FHA Commissioner Carol Galante said some mortgages originated since the termination of the MIP cancellation policy earlier this year still contain incorrect MIP-related disclosures. Under the revised policy, MIPs are no longer cancellable when the current loan-to-value ratio reaches 78 percent. Rather, MIP payments must be made over the entire life of the FHA-insured loan. The change is aimed at increasing ...
Lenders must consider debt disputes, collection accounts and judgments in analyzing a borrower’s credit worthiness because they are indicators of the borrower’s ability and willingness to meet his or her credit obligations, according to the FHA. In recently issued guidance, the FHA said lenders should analyze all collections and judgments, past and present, because they may indicate a borrower’s disregard for credit obligations. Such analysis helps decide whether a loan should be approved for FHA insurance, the agency said. The FHA amended its guidance on collections and disputed accounts in Mortgagee Letter 2013-24, and further clarified ...
As feared by the residential finance industry, an increase in upfront mortgage insurance premiums is hurting participation in the FHA program by first-time buyers.
The CFPB, HUD and the Department of Justice have all gone on record asserting that disparate impact claims are viable under the Fair Housing Act and the Equal Credit Opportunity Act.
Currently, FHA requires a waiting period of two years in bankruptcy cases and three years after a foreclosure or short sale before a borrower can apply for an FHA loan.
Plans by officials of the city of Richmond, CA, to make a controversial use of eminent domain to seize underwater mortgages, rework their terms and stiff MBS investors for the resulting losses suffered two major blows in recent days as two federal regulatory agencies that play a critical role in the nation’s mortgage finance system intensified their opposition. This week, the Department of Housing and Urban Development, in response to a joint inquiry by three California Republicans on the House Financial Services Committee, said it cannot guarantee that any mortgage seized through eminent domain would be approved for an FHA-insured refinance – a central pillar in the eminent domain proposal developed by Mortgage Resolution Partners. “Pending legal developments and possible further execution of the plans in question, HUD does not know...
The Obama administration last week pushed the Department of Housing and Urban Development and the Federal Housing Finance Agency to consider reducing the high-cost conforming loan limits beginning in 2013. However, significant opposition from Realtors, home builders and members on both sides of the aisle in Congress has prevented previously planned declines. “In order to reduce the government’s footprint over several years, we recommend allowing FHA loan limits to fall at the end of 2013 as currently scheduled,” the Obama administration said. “Beyond that, HUD and FHFA should closely examine using their existing authorities to reduce loan limits further consistent with the pace of the recovery, market developments, and the administration’s principles and transition plan for housing finance reform.” In 2008, Congress increased...
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