Applications for purchase mortgages surged last week as FHA borrowers rushed to get their applications in before April 1, when higher FHA annual insurance premiums took effect, according to the Mortgage Bankers Associations latest weekly survey of mortgage loan applications. The boost in total purchase applications for the week ending March 29 was fueled by a nearly 7.0 percent increase in government-backed purchase applications, the MBA noted. This [increase] was likely driven by borrowers applying for loans prior to the scheduled increase in FHA premiums that took effect on April 1, said Mike Fratantoni, the MBAs vice president of research and economics. On a year-over-year basis, purchase applications are up about 4 percent, in line with the trend we are seeing in home sales volume. The 10 percent annual premium increase, the third in two consecutive years, applies...
The Federal Housing Finance Agency is warming up plans to launch a sales blitz for the successful but sun-setting Home Affordable Refinance Program. Last week, while testifying before the House Financial Services Committee, FHFA Acting Director Edward DeMarco said the agency will soon implement a nationwide marketing campaign for HARP to let borrowers know this is a legitimate program. We want to see more borrowers refinance.
First Guaranty Mortgage Corp., a provider of special niche products, has announced plans to push more mainstream FHA/VA and Fannie Mae products through its wholesale broker channel. The plan is to add the popular Home Affordable Refinance Program, loans backed by the Rural Housing Service, and the FHA and VA streamline refinancing programs to the current wholesale menu of manufactured home loans and 203(k) home rehabilitation and repair loans. Wed like our wholesale side to be better-rounded and so were ...
The use of premium pricing to induce more borrowers to opt for FHA streamline refinancing may be a boon for FHA borrowers but clearly a bane for investors in Ginnie Mae mortgage-backed securities, according to Barclays Research analysts. There are indications that more FHA lenders are resorting to premium pricing, in which borrowers pay a higher mortgage rate in return for lowering the cost of obtaining the loan. Its use seems to be increasing, which also raises the risk of Ginnie Mae prepayments, said ...
Two differing notions have emerged during a recent hearing in the House Financial Services Subcommittee on Housing and Insurance regarding the rapidly changing relationship between private mortgage insurance and the FHA single-family mortgage insurance program. One view is that FHAs existing policies either ignore or violate basic regulatory principles and continue to crowd out private capital. Compared to state-regulated private MIs, the FHA has far less stringent standards and enforcement from a regulatory perspective has been disappointing. Proponents of this view say that ...
The FHAs subsidy rate for its single-family mortgage insurance program is expected to remain negative and adjust significantly in the coming years along with other guarantees of new residential mortgages, according to the Congressional Budget Office. The CBOs baseline estimates show the subsidy rate for the FHA Mutual Mortgage Insurance Fund at negative 6.0 percent in 2013 and eventually dropping to negative 1.2 percent in 2023, in line with a parallel decline in FHAs share of loans with guarantees that will drop from 13.0 percent to 7.5 percent over the 10-year period. According to the Department of Housing and Urban Developments FY 2012 third-quarter report to Congress, the FHA subsidy rate changed ...
The Internal Revenue Service is preparing to launch an industry-wide review of housing counseling agencies, including those approved by the Department of Housing and Urban Development, as well as other tax-exempt entities that provide mortgage foreclosure assistance, compliance experts warned. In fact, the IRS has started looking at providers that have applied for tax-exempt status in recent months and has denied three organizations in February 2013 alone, according to attorneys with the Washington, DC, law firm Venable. Housing counseling agencies can use the issues raised in the private letter rulings as a ...
A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUDs budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUDs entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...