A former FHA commissioner has recommended raising the agency’s capital reserve ratio to 3 percent, to make FHA stronger and more resilient. Carol Galante, who served two years as FHA commissioner and assistant secretary for housing in the second term of the Obama administration, laid out her proposal along with other recommendations in a paper that she co-authored. Housing-finance reform without a retooled FHA could threaten families’ access to homeownership and increase risk to taxpayers, contrary to the goals of reform, said Galante, currently the faculty director of the Terner Center for Housing Innovation at University of California Berkeley. In her paper, Mission Critical: Retooling FHA to Meet America’s Housing Needs, Galante spelled out the changes necessary to help FHA perform its complementary and countercyclical role in the nation’s housing markets. Galante called for ...
A newly released study by the Department of Veterans Affairs showed a 4.0 increase in the number of veterans who have used a VA mortgage in FY 2016 compared to the previous fiscal year. Also, a recent survey conducted by loanDepot found that 56 percent of veterans who participated did not take advantage of their VA loan benefits. Respondents included 400 targeted active servicemembers, veterans and surviving spouses. Conducted by the National Center for Veterans Analysis and Statics, the VA study focused on veterans who have used at least one of 22 benefits or services provided by the VA during fiscal years 2007 through 2016. The study found that loan guarantee was the third most used benefit by veterans behind health care and pensions. Of the 7.1 million vets who used at least one VA benefit, 2.6 million (36.6 percent) took advantage of the zero-downpayment, low-interest ...
Ginnie Mae called on issuers to ensure that the data they submit are accurate following the discovery of erroneous payment reports. The agency said it has noticed discrepancies in the reporting of the first payment date on loan modifications in violation of Ginnie guidelines. Specifically, the first payment date some issuers reported as part of the loan-delivery data did not match the date submitted for the same mortgage loan as part of issuers’ monthly report of pool and loan data. Ginnie blamed the errors either on loans set up incorrectly for servicing or faulty data issuers had reported to the Department of Housing and Urban Development. Guidance issued by Ginnie on Nov. 14 reminded issuers to report the first scheduled payment date of the re-amortized loan when reporting the first payment date for modified mortgages through either the GinnieNET or the Reporting and Feedback System. The date ...
Mortgage banker David Kittle, a candidate for Ginnie Mae president, has informed the White House and Housing and Urban Development Secretary Ben Carson that he is no longer interested in the position, according to industry sources. Kittle, a founding partner and vice chairman of the Mortgage Collaborative, an industry vendor, could not be reached for comment. Kittle was first approached by the White House nine months ago about the job. A background check on the potential nominee was reportedly underway but he was never officially nominated. The industry veteran began his mortgage-banking career as a loan officer with American Fletcher Mortgage Co. He is a past chairman of the Mortgage Bankers Association, completing his term in October 2009. A Republican, he also once served as president of the Kentucky Mortgage Bankers Association. Kittle’s withdrawal leaves the ...
Congress and the FHA should avoid undertaking policy changes that would further weaken the agency’s ability to cover insurance losses and potentially lead to another taxpayer bailout, according to a recent analysis by The Heritage Foundation. THF analyst John Ligon and Norbert Michel, a research fellow, said FHA policy reforms should ensure that the agency maintains a limited role in the housing finance system. FHA should make way for private capital to enter the market and serve the housing needs of American households, they added. FHA can accomplish such policy goals by lowering its loan limits and adequately pricing insurance for borrower risk, the analysts said. In addition, Congress should ensure that FHA borrowers are required to maintain mortgage insurance over the full life of the loan as required currently by the Department of Housing and Urban Development, said ...
PennyMac no longer requires tax transcripts, or IRS Form 4506-T, for delegated FHA and VA programs despite its continuing concerns over income fraud. The lender announced the new guidance on Nov. 13, 2017, and it took effect immediately. It applies to borrowers of FHA, VA and government-sponsored enterprise loans who qualify solely with W-2 wage-earner income and/or fixed income reported on a 1099 form. Meanwhile, tax transcripts will continue to be required for all loan applicants where tax returns are required to document qualifying income and income sources for non-delegated, US Department of Agriculture rural-housing and jumbo loans, said PennyMac. Such requirement includes but is not limited to self-employed borrowers, those earning commissions greater than 25 percent of income and borrowers working for family. The tax transcript requirement may be ...
House Passes Flood Insurance Bill. On Nov. 14, the House of Representatives passed on a vote of 237 to 189 H.R. 2874, the 21st Century Flood Reform Act, which would reauthorize the National Flood Insurance Program for five years. The program expires on Dec. 8, 2017. In addition, the bill would make changes that would allow private companies to sell not only NFIP coverage but to write and offer their own flood insurance policies as well. The Senate is still negotiating the terms of its own flood insurance bill. Northwest Trustee Sued for Illegal Foreclosure of Servicemembers’ Homes. The Department of Justice is seeking, among other things, monetary damages and civil penalties against a foreclosure trustee for allegedly foreclosing on homes of active members of the US military without proper court order. In a lawsuit filed Nov. 9 in U.S. District Court for the Western District of Washington, the ...
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