Officials with the Department of Housing and Urban Development confirmed this week that they are working on ability-to-repay and qualified mortgage standards for FHA loans. However, they remained tight-lipped about whether they will craft a QM standard for FHA loans that differs from the Consumer Financial Protection Bureaus standards, as requested by some lender trade groups. The Dodd-Frank Act requires HUD (for the FHA), the Department of Veterans Affairs, the Department of Agriculture and the Rural Housing Service to develop QM standards for the respective government mortgages that they oversee in consultation with the CFPB. Such rules may revise, add to, or subtract from the criteria used...
Record low interest rates and loosened underwriting guidelines have induced strong refinance activity during the first half of 2012. Industry participants agree that the refi boom will continue through the third quarter of 2012, but then predictions get hazy. During Wells Fargos earnings presentation for the second quarter last week, Timothy Sloan, a senior executive vice president and CFO at the bank, downplayed suggestions that refi activity has declined this month compared with June. The business is good and were optimistic about it, he said. Very optimistic, added...
Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, successfully attached an amendment to H.R. 5972, the Department of Housing and Urban Development Appropriations Act, 2013. Garretts amendment would gut the disparate impact rule proposed by HUD last September by prohibiting the agency from using any of the agencys funding to promulgate, issue, establish, implement, administer, finalize, or enforce the rule. The congressmans amendment has strong support from the mortgage...
New issuance of residential MBS slipped modestly during the second quarter of 2012 despite a strong start in the securitization of deeply underwater Fannie Mae and Freddie Mac mortgages. A total of $378.04 billion of single-family MBS were issued during the second quarter, down 3.4 percent from the first three months of 2012, according to a new Inside MBS & ABS analysis. On a year-to-date basis, the market was still 30.5 percent ahead of issuance during the first half of 2011. The second quarter ended on a strong note. Total MBS production increased 12.5 percent from May to June, including a pickup in...
Thousands of ineligible tax cheats received FHA-insured mortgage loans under the American Recovery and Reinvestment Act of 2009 even though federal tax regulations prohibited tax debtors from obtaining government-backed mortgages, the Government Accountability Office reported in a new study. The report found that 6,327 borrowers, who owed a total of $77.6 million in federal taxes, were able to obtain more than $1.44 billion in FHA-insured mortgages under the ARRA. Of these borrowers, 3,815 individuals claimed and received $27.4 million under the statutes temporary First-Time Homebuyer Credit program. The GAOs analysis included ...
Some FHA borrowers are still having difficulty obtaining lower-cost streamline refinancing even though the FHA has said it will accept streamline loans with no credit check, income verification or appraisal. Borrowers said they are still encountering credit checks, income verification and other obstacles, which indicate that lenders are disregarding FHA instructions regarding the enhanced streamline refi program. Even though FHA guidelines are in place, lenders are adding their credit overlays to the detriment of FHA borrowers seeking to ...
Given the features of the enhanced FHA streamline refinancing product, investors will be focusing on the FHA low mortgage-insurance premium (MIP) pools in the coming months, according to analysts with Barclays Research. Barclays analysts estimate that 27 percent of outstanding Ginnie Mae MBS pools are eligible for streamline refinancing, which could translate to $36 billion in new annual Ginnie Mae issuance. Approximately $293.0 billion of Ginnie Maes $1 trillion-plus 30-year loan pools were originated before May 2009, analysts said. About 79 percent of the collateral underlying the pools are ...
The Consumer Financial Protection Bureau expects to undertake a project to refine and integrate disclosure requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act for reverse mortgages to improve consumers understanding of the product. The In a recent 231-page study submitted to Congress, the CFPB said consumers are still confused about how reverse mortgages work, despite the required disclosures and industry efforts to educate the public on this type of equity-based lending. The rising-balance and falling-equity nature of reverse mortgages is particularly ....
The Department of Housing and Urban Development said it has received $1.2 billion in recent settlements with large mortgage lenders and servicers but HUDs internal watchdog, which did much of the legwork in the investigations, reveals a much smaller amount. According to recent audit reports published by HUDs Office of the Inspector General, only Bank of America and Flagstar Bank have made payments under settlement agreements with HUD and the Department of Justice to resolve government claims. In separate memos to HUDs Office of General Counsel last month, Kim Randall, director of the HUD OIG Civil Fraud Division, sought clearance to ...
Two lenders lost their approval to underwrite and originate FHA loans under Credit Watch while two others may be ordered to indemnify the Department of Housing and Urban Development for potential losses on several ineligible FHA-insured loans. HUD recently stripped Community Central Mortgage Co. of Mount Clemens, MI, and Strategic Mortgage Co. of Columbus, OH, of their direct endorsement approval because of the exceedingly high default and claim rates of FHA-insured loans they originated in their business areas. The Credit Watch Termination Initiative allows HUD to terminate a direct endorsement agreement with any FHA lender if ...