As the wait for the highly anticipated “qualified mortgage” final rule continues, its impact on FHA lending programs remains uncertain. Concerns have been raised over the possibility that the final QM rule the Consumer Financial Protection Bureau is finalizing may establish a “safe harbor” for prime loans with a maximum debt-to-income ratio of up to 43 percent. This could have implications for FHA loans, which allow higher back-end ratios under certain circumstances, according to some lenders and industry participants. At what point the DTI ratios will ...

The FHA and VA have announced loan limit adjustments in many counties even as disparities with conventional loan limits persist in 2013, according to a new analysis by Inside FHA Lending. FHA loan limits for forward mortgages will increase in 2013 for 19 counties, 10 of which are part of the Houston metropolitan area. In those counties, the one-unit limit is going up just $1,500 to $272,550. The remaining counties are in Alaska. Congress authorized the “emergency” loan limits for high-costs markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac –to run through Dec. 31, 2013. The base loan limit nationwide and in ...

The Department of Housing and Urban Development reported strong note sales of more than $1.7 billion under the expanded Distressed Asset Stabilization Program (DASP) and announced another big sale in the first quarter of 2013. Preliminary results from the sale in September showed record participation among interested bidders on 13 pools. In total, the 13 pools went to 10 different entities, among them nonprofit and community-based organizations, according to HUD. While still in the process of settling the transactions, the FHA said it is very ...

Despite the renewed focus on the FHA in the wake of the recent actuarial report, analysts do not expect any meaningful action in 2013 given the important role that FHA plays in supporting the housing market. But that does not mean that the Department of Housing and Urban Development will be sitting idly by next year. It has a lot of additional measures to implement to protect and preserve the FHA Mutual Mortgage Insurance Fund, HUD Secretary Shaun Donovan told Senate lawmakers recently during a hearing on the condition of the fund. The changes are both ...

Wells Fargo Bank and Bank of America maintained their dominance in the FHA servicing market while the other institutions in the top five category held on to their respective market shares in the third quarter of 2012, according to the latest rankings by Inside FHA Lending. Except for some slight changes in the rankings, overall volume appeared flat during the quarter with no significant jumps or decline. The volume of mortgage debt outstanding with FHA insurance increased to $7.6 billion in the third quarter, up from $7.5 billion the previous quarter, with top-ranked Wells Fargo and second-place BofA accounting for ... [1 chart]

Ginnie Mae servicers reported a small increase in total production on a quarterly basis and a modest improvement year-over-year, according to an Inside FHA Lending analysis of FHA data. Third quarter servicing volume was up 2.1 percent to $1.3 trillion from the previous quarter and 9.7 percent from the same period last year. Not surprisingly, top-ranked Wells Fargo Mortgage and second-place Bank of America accounted for 52.0 percent of total production. Wells Fargo grew its Ginnie Mae servicing portfolio to $399.6 billion in the third quarter, 4.2 percent better than the previous quarter and a 17.4 percent improvement from a year ago. That bumped up Wells’ market share to ... [1 chart]

An FHA lender need not cancel a scheduled foreclosure sale to reassess a borrower if the property is non-owner occupied, vacant or an investment property, according to newly issued agency guidance. Under such circumstances, the lender does not have to cancel a foreclosure sale date because loss mitigation retention options are only available to owner-occupants, the FHA explained in a frequently-asked-questions guidance on the revised requirements for loss mitigation retention options. The FHA announced the changes last month in an effort to ...

The FHA has made changes to its internal systems to make sure lenders are paying the correct recertification fees based on the number of FHA-approved branch offices. Currently, an approved lender is required to pay annual recertification fees within 90 days of the end of the fiscal year to maintain approval for the next annual reporting period. Recertification fees cover the home office and each FHA-approved branch office. Previously, lenders were allowed to terminate branch offices at the start of the annual reporting period but before paying the recertification fees. However, system flaws caused ...

Industry observers are holding out fading hope that Congress will act on time-sensitive mortgage-related bills before the lame-duck session draws to a close, but as the clock winds down, real estate interests are already adjusting their legislative expectations for 2013. At the top of the list of mortgage bills being watched closely is the extension of the Mortgage Forgiveness Debt Relief Act of 2007. The law exempts up to $2 million in mortgage debt forgiven by a lender in a short sale, loan modification or foreclosure from federal taxation. Despite support from both political parties, industry groups and consumer advocates, legislative efforts to renew the act have...

Panelists with opposing views of the FHA this week supported raising the single-family mortgage insurance program’s minimum credit score to keep borrowers with questionable credit quality out and help preserve the high quality of FHA’s newer books of business. Despite their disagreements over whether the FHA will ultimately need a taxpayer bailout, participants in a policy forum hosted by the Cato Institute called for reforms to reduce government presence in the mortgage market and help the FHA to avoid ...