The FHA has given lenders and servicers an additional extension through April 17, 2016, to submit due-and-payable notices when Home Equity Conversion Mortgage borrowers fall behind on their property tax or insurance payments. The extended deadline also provides FHA lenders and servicers an opportunity to pursue loss mitigation before initiating foreclosureThe latest deadline extension was the second such extension. In April 2015, the FHA announced a policy change providing HECM lenders and servicers an additional 60 days in which to initiate foreclosure proceedings against any troubled HECM borrower with a case number issued prior to Aug. 4, 2014, with a non-borrowing spouse. Lenders and servicers are required to comply with reasonable-diligence timeframes for such HECMs. Debenture interest will not be curtailed during this period. The April policy allows mortgagees full discretion as to when to use the extension.
The U.S. Department of Agriculture Rural Development has extended temporary authorizations to USDA loan officers to approve home financing for very low- and low-income persons in rural areas in 2016. The temporary authorizations are available through Sept. 30, 2016, according to the agency’s recently issued fiscal 2016 guidance. The USDA extends authority to “loan-approval officials” to approve Single-Family Housing Section 502/504 direct home loans provided they have an acceptable appraisal. Loans obligated under this authorization must be for housing purposes only and the applicant must meet all eligibility criteria, according to the guidance. The Rural Development (RD) field staff must first review the appraisal before the loan is closed. Funding must be cancelled as quickly as possible whenever a transaction falls through. RD state offices are responsible for reviewing accounts if they ...
The U.S. Department of Agriculture Rural Housing Service has issued updated guidance regarding the use of protective advances and partial releases in the agency’s Single-Family Housing Direct Loan Program. Designed to safeguard the government’s security interest, protective advances are used to finance essential repairs on the property, satisfy prior liens, pay taxes and insurance premiums, or pay local assessments. Protective advances for essential repairs will only be available if the borrower cannot obtain a subsequent loan. They are charged subsequently to the borrower’s account. According to RHS Administrator Tony Hernandez, protective advances are a last-resort measure since they pose a higher risk of loss to the government, compared to other alternatives. In addition to greater risk, advances create tax consequences for the borrower. They can also be more costly to the ...
The Department of Housing and Urban Development this week announced an insurance rate reduction for multifamily affordable and energy-efficient properties to stimulate production and rehabilitation of affordable rental housing. The new reduced rates will take effect on April 1, 2016, and will directly affect FHA’s Multifamily Housing Programs and properties housing low- and moderate-income families. For “broadly affordable” housing, the FHA is lowering annual mortgage insurance rates to 25 basis points. Rates for affordable mixed-income properties would be lowered to 35 bps. For energy-efficient properties, the annual rates would be reduced to 25 bps. To ensure that broadly affordable and energy-efficient properties benefit directly from the lower rates, FHA will limit the fees that can be charged on these loans. “The reduction in mortgage insurance premiums for FHA loans on ...
On Jan. 21, 2016, the FHA issued a reminder to lenders to register for one of the three remaining phases of Electronic Appraisal Delivery (EAD) Onboarding, before the electronic appraisal submission requirements become mandatory on June 27, 2016. The remaining onboarding phases are the following: Feb. 15-April 15 (registration closes on Feb. 14); March 15-May 15 (registration closes March 14); and April 15-June 15 (registration closes on April 14). All appraisals for FHA case numbers assigned on or after June 27, 2016, must be submitted to FHA through the ...
One observer who follows the program had this to say: “It’s nice of them [FHA] to give money away in an election year. It’s not like they need the volume.”
Bowing to pressure from investors – in particular, Carl Icahn – American International Group this week rolled out a blueprint to increase shareholder value, including a partial spin-off of its top-ranked mortgage insurance division, United Guaranty Corp. Although both AIG and UGC were not entertaining questions on the details, a spinoff of the MI business could come by mid-year with up to 19.9 percent of the unit being sold to the public. Eventually, AIG said...
The mortgage industry’s continued use of marketing services agreements and other affiliated business arrangements hangs in the balance in a long-running dispute between PHH Corp. and the Consumer Financial Protection Bureau, which will be the subject of oral arguments April 12, 2016, before the U.S. Court of Appeals for the District of Columbia. “The PHH appeal is one of the most important Real Estate Settlement Procedures Act opinions to be decided by the courts in decades,” legal expert Phillip Schulman told Inside Mortgage Finance this week. “It will determine whether Section 8(c)(2) of the act merely clarifies the Section 8(a) anti-kickback provisions of the statute, as CFPB Director Richard Cordray claims, or whether it creates a safe harbor that exempts payments from a RESPA violation if those payments are for goods provided or services rendered, as the plain language of the act and several previous circuit courts have held.” Further, “This appeal will have...
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