Roughly 27 percent of outstanding Ginnie Mae MBS pools are eligible for the FHA’s revised streamline refinancing program, which could translate to $36 billion in new annual Ginnie Mae issuance, according to a report from Barclays Research. Barclays analysts estimated that about $293.0 billion of Ginnie Mae’s $1 trillion-plus 30-year loan pools were originated before May 2009. About 79 percent of the collateral backing these pools are FHA loans, which suggests that as much as $232.0 billion could qualify...

Leading Senate Democrats and Republicans have been moving cautiously to advance legislation to expand the Home Affordable Refinance Program, although industry observers say the odds are long the measure will see meaningful Congressional action before the legislative clock runs out. Senate Banking Committee Chairman Tim Johnson, D-SD, and Sen. Richard Shelby, R-AL, the committee’s ranking member, have been working on an agreement to ensure that the proposed amendments to the legislation in a markup would be strictly narrowed to making changes to HARP. However, Shelby is pushing to permit any provision on housing finance to be considered...

Fueled by a pent-up gusher of refinance activity on deeply underwater mortgages, the Home Affordable Refinance Program appears on pace to set a new record high in the second quarter of 2012, according to a new Inside MBS & ABS analysis. Based on loan-level data through the midway point in June, securitization of HARP loans by Fannie Mae and Freddie Mac is expected to reach an estimated $53.3 billion in the second quarter. That would represent a 27.1 percent increase over the previous record, $42.0 billion, set in the first three months of this year. A big chunk of the increase is...(Includes two data charts)

A new secondary market policy announced by Wells Fargo last week is sending ripples across the industry and could potentially cause the FHA Streamline Refinance program to falter in the coming weeks. Major FHA lenders have quietly adopted similar policies as FHA refinance volume, fueled by increased streamline refi business, more than doubled over the week. Wells Fargo raised eyebrows by announcing it will do FHA streamline refis only on loans in its own servicing portfolio and will not accept streamline refis from third-party originators. The top FHA producer in the first quarter of 2012 said focusing on ...

FHA lenders may expect new guidance on the use of credit overlays as the Department of Housing and Urban Development expressed concern over lenders imposing additional underwriting beyond what FHA already requires. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said there is concern about FHA lenders raising credit score requirements much higher than the agency requires to shield themselves from future liability. She said many lenders are requiring credit scores of 700 or higher, way above the traditional FHA borrower score of 640-650 – a practice that is not prohibited but ...

The Department of Housing and Urban Development is looking for ways to expand the FHA’s home renovation program to accommodate real estate-owned properties even as the mortgage industry urged HUD to open the program to investors. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said HUD is considering use of the 203(k) Rehabilitation Loan program to ease FHA’s huge inventory of foreclosed properties. HUD’s REO inventory has dropped from a peak of 68,997 foreclosed properties in March 2011 to 29,692 in February. As of May 27, the inventory was ...

Widespread objection by stakeholders has forced the Department of Housing and Urban Development to rescind a new lending policy regarding borrowers with disputed debt and unresolved collection issues and to consider clarifying the issue in future guidance. The policy, announced along with other FHA underwriting changes in February, was initially to take effect on April 1. However, industry concern about fewer borrowers qualifying for an FHA-insured loan caused HUD to extend the policy’s effective date to July 1 to reexamine and gather more information from stakeholders. HUD announced its decision to ...

Advocates for FHA condominium rule changes may have to wait a bit longer for a proposed rule currently in development, according to Acting FHA Commissioner Carol Galante. Galante said the Department of Housing and Urban Development is reviewing the current FHA condo rules for future revisions that would remove the roadblock to buyers, sellers and lenders. A proposed rule is in the works but it could take considerably more time to finish and finalize it, she said without providing a timetable. In the meantime, new guidance is on the way to ...

The real estate industry called on the Department of Veterans Affairs to offer an existing pilot program on property rehabilitation similar to the FHA’s 203(k) program in all markets, especially those with a high veteran population. In a letter, the National Association of Realtors asked that the Veterans Renovation Pilot Program be administered through the VA Loan Guaranty Program, allowing veterans to purchase distressed property for repair, alteration, renovation and improvement. The VA pilot resembles the FHA’s “fixer-upper” program for buyers interested in purchasing ...

FHA lenders and servicers commencing foreclosure on FHA-insured mortgage loans in the Commonwealth of Virginia must first meet with the borrower personally before proceeding or risk voidance of the foreclosure sale, the state supreme court ruled recently. Because of the decision by the Supreme Court of Virginia, the state has joined a growing list of states that require a face-to-face meeting between a mortgage lender and a borrower before initiating foreclosure proceedings on an FHA-insured mortgage loan. In Mathews v. PHH Mortgage Corp., the court upheld ...