The reverse mortgage lending industry has asked Senate lawmakers to expand the Department of Housing and Urban Development’s authority to strengthen its oversight of the Home Equity Conversion Mortgage program. Testifying before the Senate Committee on Banking, Housing and Urban Affairs recently, Peter Bell, president of the National Reverse Mortgage Lenders Association, said it is crucial for HUD to be able to act swiftly to reduce the risk the program poses to the FHA insurance fund. Bell said HUD needs to implement changes “in a matter of months, not years” and for that to happen, it would need authority from Congress to ...
The FHA’s efforts at underwriting reform and reducing its footprint to give way to private capital are nothing but an illusion of reform, according to the American Enterprise Institute. Raising the annual mortgage insurance premium and the required downpayment for FHA-insured loans greater than $625,500 as well as tightening the underwriting on loans with credit scores of 620 or below would impact only a tiny percentage of FHA business, said Edward Pinto, a resident fellow at AEI. “These changes make great sound bites but clearly this is the illusion of reform,” he said. Both measures are part of FHA’s latest efforts to ...
Reverse Mortgage Solutions, a HECM lender bought by Walter Investment Management Corp. last fall, has received a $100 million warehouse line of credit from Royal Bank of Scotland, according to a new filing with the Securities and Exchange Commission. The line is legally structured as a master repurchase agreement. However, it is also considered “uncommitted” and matures in February of 2014. RMS will use the money to fund new originations of HUD-backed home equity conversion mortgages. Several of the nation’s largest banks have exited the HECM space the past two years, including Wells Fargo and Bank of America. A handful of nonbanks have moved ...
Congress has expressed interest in an industry proposal for new shared-risk arrangements involving private mortgage insurers and the FHA to cut the government’s exposure to losses and help protect future FHA borrowers from getting into loans they cannot afford. The proposal was presented in separate testimonies during recent House and Senate committee hearings on FHA solvency and the need for reforms to strengthen and protect the Mutual Mortgage Insurance Fund and avoid any potential bailout by taxpayers. In a Senate Banking, Housing and Urban Affairs Committee hearing, Teresa Bryce Bazemore, president of Radian Guaranty, urged...
Mortgage originations last year increased by some $435 billion from 2011 and virtually all of that gain came from refinance activity. Unless housing activity begins to grow significantly faster, mortgage lending volume appears likely to drop significantly in 2013. Prodded along by the suddenly successful Home Affordable Refinance Program, refi lending increased by $403 billion last year, a 41.9 percent increase over 2011. And although a number of indicators suggested that housing sales were beginning to firm up, home-purchase mortgage originations were up just 6.3 percent – a gain of $32 billion – compared to the previous year. In fact, purchase-mortgage originations have been...[Includes three data charts]
The Mortgage Bankers Association urged the Consumer Financial Protection Bureau to give all FHA loans a “conclusive presumption of compliance” with qualified mortgage requirements and to revise the QM annual percentage rate/average prime offer rate (APR/APOR) threshold for FHA loans at least until the agency issues its own QM rule. Failure to make the adjustments could severely restrict the availability of FHA loans to lower-income first-time homebuyers, which is the FHA’s traditional market, the trade group said. In comments on the CFPB’s final ability-to-repay rule, the MBA said...
Citadel Servicing has raised $200 million in capital to originate residential subprime mortgages. Does this mean subprime lending is "back"? Answer: yes and no.
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