The third and latest round of quantitative easing rolled out earlier this month by the Federal Reserve will sweeten MBS demand far above supply, but it will ultimately provide only a negligible boost to mortgage refinance activity, analysts say. The Federal Open Market Committee announced QE3 on Sept. 13, making a commitment to buy an additional $40 billion in agency MBS a month and saying that it would continue buying if the outlook for the labor market does not improve substantially. The New York Fed has been buying about $27.9 billion of agency MBS per month since October 2011 in an effort to reinvest principal payments from its MBS holdings back into the mortgage securities market. An analysis by Bank of America Merrill Lynch this week found...
A presidential task force created to investigate the pooling, sale and securitization of residential mortgages is now ready to pursue action against those whose business practices contributed to the financial crisis, according to New York Attorney General Eric Schneiderman. Certain financial institutions have contacted outside counsel after Schneiderman, chairman of the Residential MBS Working Group, told reporters the group is ready to take legal action sooner rather than later. A spokesman for the New York AGs office declined to provide details but confirmed that there are ongoing investigations and that there would be upcoming announcements. We are looking at conduct that led...
Researchers with the Federal Reserve Bank of New York have found additional evidence to support New York Fed President William Dudleys call for an increase in streamlined refinances for current borrowers with agency mortgages. They suggest that further changes to the Home Affordable Refinance Program to prompt refis and prepayments are not a zero sum game between borrowers and agency MBS investors. In January, Dudley said obstacles have prevented...
New temporary guidelines for approving FHA financing for condominium projects should boost sales of condo units across the country and improve current housing market conditions, according to industry stakeholders. The Department of Housing and Urban Development announced the guideline changes on Sept. 13 after extensive consultations with industry participants. Effective for all condo project approvals and recertifications, the revised guidelines will apply until Aug. 31, 2014, unless extended by the FHA. Stakeholders are confident that the changes, though temporary, will be ...
Poor credit history is still the most cited reason for denying a government-backed, purchase-loan application although collateral appears to be gaining traction due to depressed home values and underwater mortgages, data reported by lenders under the Home Mortgage Disclosure Act indicated. The latest HMDA data showed that 25.0 percent of FHA/VA home purchase loan applicants in 2011 were turned down because of credit history issues, perhaps reflecting tighter FHA underwriting and lenders credit overlays, which have resulted in average borrower credit scores of 720 and above on new endorsements. Average borrower credit scores for fully underwritten FHA loans, for example, held steady at ... [1 Chart]
CitiMortgage this week paid in excess of $122.8 million to the FHA Mutual Mortgage Insurance Fund as part of its agreement with the Department of Housing and Urban Development and the Department of Justice to settle alleged violations of the False Claims Act. The payment to the FHA insurance fund is part of the $158.3 million settlement, which CitiMortgage agreed to in order to resolve charges of submitting false certifications to HUD regarding its compliance with FHAs direct endorsement lender rules and endorsement of poorly underwritten loans for FHA insurance. These violations allegedly occurred between ...
The FHAs seriously delinquent rates and early payment defaults went virtually unchanged in the second quarter of 2012 from the previous quarter, according to the Department of Housing and Urban Developments latest report on single-family programs covered by the FHA insurance fund. FHA data showed that the seriously delinquent rate for insured single-family mortgages (excluding streamline refinances) held at last quarters level of 9.4 percent, which is 1.4 percent higher than this period a year ago. The report attributed the elevated level to two factors. The first is the persistency of loans in 90-day delinquency as lenders try ...
The antiquated backbone of the FHAs Home Equity Conversion Mortgage program will soon be history with the official launch of HERMIT on Oct. 9. HERMIT, or the Home Equity Reverse Mortgage Information Technology, is a second generation, web-based automated system, designed to improve the Department of Housing and Urban Developments ability to track and monitor its HECM portfolio in real time. The system also automates the payments of insurance claims while increasing efficiency and mitigating risks to the FHA insurance fund. HERMIT consists of a servicing module and an accounting module to ...
Fixed-rate mortgages comprised most of Augusts FHA production, which totaled $22.1 billion, up 13.2 percent from July and 37.9 percent from a year ago, according to an Inside FHA Lending analysis of FHA data. FRMs accounted for 98.9 percent of new loans with FHA insurance in August. In-house originations made up 79.6 percent of new endorsements while purchase loans accounted for 56.1 percent of FHA originations during the month. Wells Fargo is the only top FHA lender to exceed the billion-dollar mark. In fact, the bank reported $2.2 billion in new FHA originations, 76.0 percent of which were produced in-house. The purchase mortgage share of Wells total FHA originations was ... [2 charts]
The FHA Short Sale program may have cost the Department of Housing and Urban Development more than $1 billion in ineligible claims but only a portion may actually be recovered, according to a report from HUDs Office of the Inspector General. A HUD OIG audit estimated that the department paid $1.06 billion in claims for 11,693 preforeclosure sales that did not meet FHAs criteria for participation in the program. The OIG said it began a nationwide review of the short sale program after finding significant deficiencies in borrower qualifications during an audit of CitiMortgages preforeclosure sale claims last year. Auditors found ...