The fallout from last week’s trigger of the “nuclear option” by Senate Democrats, which is expected to lead to the confirmation of President Obama’s choice to be the new director of the Federal Housing Finance Agency, has analysts worried about the possibility of expanded Home Affordable Refinance Program eligibility. The Senate voted to confirm most executive and judicial nominees by a simple majority vote, and it dramatically improves the prospects of Rep. Mel Watt, D-NC, to replace FHFA Acting Director Edward DeMarco. A career civil servant who has been the chief regulator of the government-sponsored enterprises for the past four years, DeMarco has resisted proposals to expand HARP and broaden the GSE loan-modification options to include principal write-downs. Expanding HARP has been...[Includes one data chart]

Ginnie Mae is taking a “go slow” approach to merging its Ginnie I and Ginnie II MBS programs, noting in a new “stakeholder letter” that players in the market have “voiced concerns about the logistics of how we get there, and in particular, what will become of the legacy Ginnie Mae I security.” Ginnie officials declined to provide an update on the process this week. A spokeswoman issued a statement saying the agency “is still studying the issue,” adding that, “We are currently evaluating what market participants want.” Since 2010, Ginnie Mae II issuance has been increasingly outpacing...

The Department of Housing and Urban Development has issued guidance clarifying FHA lenders’ obligation to report voluntarily instances of fraud, misrepresentation and any other material findings in connection with the origination, underwriting and servicing of FHA-insured loans. Compliance experts say the guidance in Mortgagee Letter 2013-41 is a shot across the industry’s bow – a reminder to lenders about existing FHA policy requiring them to self-report fraud and misrepresentation to the FHA. Upon notification, the FHA works with the lender on any potential mitigation actions. In the inaugural issue of Lender Insight in June, the FHA reported ...

For the first time in five years, private mortgage insurers surpassed all government-insurance programs in the third quarter of 2013 as the largest provider of primary MI coverage in the mortgage market, according to the latest analysis from Inside FHA Lending affiliate Inside Mortgage Finance. The private MI industry showed that it has rebounded from the post-financial crisis by reporting $59.03 billion in new insurance written during the third quarter, down 3.2 percent from the previous quarter but clearly better than the FHA and VA production numbers for the same period. Data showed the two government agencies posting ...

The Department of Housing and Urban Development is considering an industry request to delay the implementation of a proposal requiring FHA lenders to perform a financial assessment of all prospective borrowers of Home Equity Conversion Mortgage loans. In remarks during the National Reverse Mortgage Lenders Association’s recent annual meeting in New Orleans, FHA Commissioner Carol Galante said HUD is still studying the comments and will need more time to implement the rule. In September, the FHA published a notice in the Federal Register seeking comment on the financial assessment proposal. The proposal is currently in ...

With the FHA high-cost loan limit set to decline from its current statutory level of $729,750 to $625,500, the same level as Fannie Mae and Freddie Mac, nobody appears to be pushing for an extension. The temporary maximum loan limit for FHA is set to expire on Dec. 31, unless Congress votes for another extension, which appears unlikely, according to mortgage industry analysts. Neither lawmakers nor the White House have shown support for maintaining the current FHA high-cost loan ceiling. Although no one has conceded that the FHA lending ceiling will go down for certain areas, there has been no effort to ...

Many condominium properties continue to struggle to meet stringent FHA requirements while many condo projects are being denied approval despite the easing of FHA approval requirements in recent years. Panelists at a recent National Association of Realtors conference in New Orleans said condos are often the most affordable homeownership option for first-time homebuyers, single borrowers and senior citizens, especially when purchased with FHA financing. Condominium loans are among the strongest performing loans in the FHA portfolio, they added. However, FHA data show that ...

Imprecise rules, triple-damage claims and increasingly political enforcement of agency rules could make it more dangerous for lenders to do business with the FHA than to originate non-qualified mortgage loans, according to a top compliance expert. Larry Platt, a partner with K&L Gates, said that when lenders originate and underwrite FHA loans they are subjected to rules that are unevenly applied and politically enforced. It is a prescription for a financial bloodbath, especially if you add to it the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, he added. Throwing the Department of Justice into the mix ...

The Department of Housing and Urban Development has scheduled its next note sale on Dec. 17, following last month’s withdrawal of $450 million of nonperforming notes from the table after bids came up short of the reserve price. The Dec. 17 whole-loan sale will include Neighborhood Stabilization Outcome (NSOs) single-family loan pools, which will be offered, as in several previous HUD note sales, through a competitive bidding process. The offering consists of 5,000 defaulted purchase single-family mortgage loans totaling $1 billion in unpaid principal balances with representations and warranties. Currently, the FHA is selling loans in ...

The Department of Veterans Affairs has provided VA lenders a table for determining the appropriate and maximum cost of legal services for each preferred method for foreclosing in judicial and non-judicial states. Specifically, the table concerns the maximum attorney fees the VA will allow in calculating the payment of loan guaranty claims upon termination of the VA loan. It reflects the amounts the VA has determined to be reasonable and customary for all states, following an annual review of amounts allowed by other government-related home loan programs. Every year, the VA ...