With nonbanks dominating Ginnie Mae’s single-family MBS program, liquidity is an important factor in the issuance and servicing of Ginnie MBS and has been the agency’s focus in recent years.
The release of the Department of Housing and Urban Development’s long-anticipated final rule on condominium lending reform, which aims to boost FHA activity in the sector, may take longer than expected, according to industry participants.
House Financial Services Committee Chairman Jeb Hensarling, R-TX, unveiled long-awaited legislation on government-sponsored enterprise reform that would enhance Ginnie Mae’s role in the secondary mortgage market. Hensarling referred to the bill – the Bipartisan Housing Reform Act of 2018 – as a “bipartisan compromise housing-reform plan” that preserves the government guarantee in the secondary mortgage market. The chairman collaborated with Rep. John Delaney, D-MD, in crafting the bill, which calls for the repeal of the federal charters of Fannie Mae and Freddie Mac. The bill would shift the secondary market to a system that allows pooling of qualified conventional mortgages backed by government-approved private guarantors with regulated capital. These loans could be pooled in mortgage-backed securities with explicit government guarantees provided by Ginnie. The new MBS program would be ...
The Rural Housing Service of the U.S. Department of Agriculture has proposed changes to its single-family housing guaranteed loan program to help certain lenders navigate the loss-claim process. Specifically, the RHS proposes to streamline the loss-claim process for lenders that have acquired title to property through voluntary liquidation or foreclosure. Under current rules, when a lender acquires title to a real estate-owned property, the RHS requires the lender to submit a plan to maintain and market the property. Any change to the plan must be approved by RHS. RHS also provides the lender two opportunities to file a loss claim on an REO property: When the property sells during the permissible marketing period, or after the period (typically from nine to 12 months) if the REO property does not sell. The agency proposes to make changes to the loss-claim payment process when a lender acquires ...
The USDA’s Rural Housing Service is proposing to amend regulations implementing its guaranteed single-family home loan program to allow the use of “income banding” in determining the very low- and low-income limits in the guaranteed loan program. The planned rule change is part of a larger package of proposed changes to RHS’s single-family direct and guaranteed loan and grant programs. The proposed revisions were published in the Aug. 31 Federal Register. Among other things, RHS has proposed to revise the definition of low-income to allow for the two-tier income limit structure or “income banding” within the Section 502 single-family guaranteed home loan program. The program provides USDA guarantees to lenders that make mortgage loans to low- and moderate-income borrowers in rural areas who could not qualify for a conventional home loan with private mortgage insurance. It already uses ...
A federal district court in San Francisco preliminarily approved a $30 million class-action settlement resolving allegations that Wells Fargo Bank improperly collected post-payment interest on FHA-insured mortgages without notice to the borrowers. The U.S. District Court for the Northern District of California granted preliminary approval of the settlement on Aug. 22. Class members include plaintiff Vana Fowler and other borrowers who had an FHA loan originated between June 1, 1996, and Jan. 20, 2015. Plaintiffs allege that Wells Fargo continued to collect interest on FHA loans they had already fully repaid without sending them proper notice. HUD allows lenders to collect interest if the borrower repays the full principal on his or her FHA loan after the first of the month. This means that banks can still collect interest through the end of the month even though the ...
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