The FHA has issued new, more permissive loss-mitigation guidelines for Home Equity Conversion Mortgages, including an optional extension for mortgagees when submitting due-and-payable requests. Additionally, the guidelines allow mortgagees to cure a HECM borrower’s taxes and/or insurance defaults as long as the FHA incurs no cost and the mortgagee agrees to refrain from seeking loan assignment for at least three years. The guidelines further remove a previous restriction prohibiting the use of the permissive loss-mitigation options announced in Mortgagee Letter 2015-11 for borrowers in foreclosure. Accordingly, for HECM loans that were in the process of foreclosure prior to the issuance of ML-2015-11, mortgagees may assess those borrowers for a repayment plan in accordance with the mortgagee letter. The repayment plan must have the ...

Cutting back on its FHA business helped reduce JPMorgan Chase’s foreclosure inventory but made it harder for the bank to meet its community reinvestment goals, according to the bank’s top executive. In a letter to shareholders, Jamie Dimon, president/CEO of JPMorgan Chase, said he would rather see the bank no longer service defaulted loans. “If we had our druthers, we would never service a defaulted mortgage again,” he wrote. “We do not want to be in the business of foreclosure because it is exceedingly painful for our customers, and it is difficult, costly and painful to us and our reputation.” Chase has cut back on FHA lending and has reinstated overlays in response to stiff penalties it paid to resolve False Claims Act allegations brought by the federal government. In 2014, Chase agreed to a $614 million settlement with the Department of Justice over allegations of ...

Freedom Mortgage is acquiring the correspondent origination assets of JPMorgan Chase’s rural housing business for an undisclosed amount. The Mount Laurel, NJ-based lender will operate the business under its own brand and retain the current executives and employees who have been originating rural housing loans through Chase’s 23-year old correspondent business. Loans backed by the U.S. Department of Agriculture comprise less than 5.0 percent of Chase’s 2015 mortgage banking business. USDA loans account for 1.04 percent of total mortgage originations in 2015, according to Inside Mortgage Finance. In its announcement, Chase said the move is part of a company effort to simplify its loan-origination business model and to focus its lending. Chase said it would continue to ...

The U.S. Department of Agriculture’s Rural Housing Service (RHS) last week published a final rule revising current regulations regarding lender indemnification, refinancing and qualified mortgage requirements, only to withdraw it later without explanation. The final rule was published in the March 29, 2016, issue of the Federal Register and was withdrawn abruptly on March 31. The RHS’ one-paragraph correction notice said the rule had been “inadvertently published” and, thus, was being recalled. The agency neither elaborated nor returned calls seeking comment. The final rule would expand the RHS’ lender indemnification authority for loss claims in the case of fraud, misrepresentation or noncompliance with applicable loan origination requirements. By taking such action, the RHS aims to improve its ability to manage the risk of its single-family housing guaranteed loan program. In addition, the final rule would ...

Debt collection, mortgages and credit reporting are the top three most-complained-about products and services in 2015, according to the Consumer Financial Protection Bureau’s fourth annual report on servicemembers’ and veterans’ complaints. Such complaints comprised a significant share of complaints from members of the military and their families logged by the CFPB last year. In 2015, the CFPB received 13 percent more military complaints compared to 2014, noted Barbara Mishkin, consumer finance attorney at Ballard Spahr. Of the 19,200 complaints received from members of the military last year, 46 percent (8,900) involved debt collection. The report indicates that military consumers submitted debt-collection complaints at almost twice the rate of the general consumer population, said Mishkin. Of the 8,900 debt-collection complaints, 44 percent involved attempts to collect a debt that the ...

Reduced mortgage insurance rates for FHA multifamily housing programs took effect on April 1, 2016 to help preserve and increase the amount of affordable housing for low- and moderate-income families. The reductions range from 25 to 35 basis points – a significant rate change for FHA’s multifamily portfolio. The revised multifamily mortgage insurance premium applies to any firm commitments issued or reissued on or after April 1. It is designed to encourage capital financing of affordable and energy-efficient dwellings. Announced on Jan. 28, the new MIP rates will not apply to FHA multifamily loans closed or endorsed before March 31, as well as to other multifamily mortgages endorsed in conjunction with an interest-rate reduction or a loan modification. For “broadly affordable” housing, FHA is lowering annual rates to 25 basis points, down 20 or 25 bps from current rates Broadly affordable housing means that ...

FHA Total Delinquencies, Serious Delinquencies Show Remarkable Improvement Since Peak. The FHA total delinquency rate in 2015 was 13 percent, down 37 percent from 2012 when the rate peaked at 16.7 percent, according to the latest data from FHA Neighborhood Watch. Serious delinquencies (loans that are 90 days or more past due) have improved 19 percent in 2015, with rates down to 6.74 percent from 9.92 percent in 2012. As of February 2016, the total delinquency rate and serious delinquency rate improved further to 11.1 percent and 5.5 percent, respectively. VA Issues POC Guidance, Seeks Comments on Proposed Data Collections. The Department of Veterans Affairs has issued new guidance revising the point-of-contact for inquiries regarding paid-in-full notifications of loans guaranteed for repurchase under VA’s Regulation 4600 Loans. The ...

Fannie Mae and Freddie Mac saw a slight decline in their single-family mortgage business during the first three months of 2016 – in fact, it was the slowest quarter in nearly two years – according to a new analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises issued $172.97 billion of single-family mortgage-backed securities during the first quarter of this year, a 3.4 percent decline from the fourth quarter of 2015. It was the slowest three-month volume since the second quarter of 2014, and the fourth-lowest output since the GSEs were put in conservatorship back in 2008. The slowdown stemmed...[Includes three data tables]

Although interest rates have been trending downward for much of the year, it hasn’t stopped mortgage firms from selling one of their most prized assets: mortgage servicing rights. According to a new tally from Inside Mortgage Finance, almost $27 billion in MSR auctions have been announced since March 1, with some bulk deals sized as high as $6.2 billion dollars. At least 16 offerings have been announced...

One servicing broker had this to say about the all the new offerings: “There’s a lot of deals out there now – and they seem to be getting done.”