The recent enactment of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 includes a number of changes to the Department of Veterans Affairs’ Loan Guaranty program, including reverting to the VA’s previous method of calculating maximum guaranty. The restoration of the previous method used to derive VA loan limits has resulted in the increase of some loan limits, according to guidance issued by the agency last week. While VA does not have a maximum loan amount, “county limits” must be used to calculate the maximum VA guaranty for a particular county. The maximum VA loan limit for 2012 in high-cost areas is ...

A proposed rule that would require a flat fee for originating a mortgage loan with a Department of Veterans Affairs guaranty could do borrowers and lenders more harm than good, warned a coalition of financial services providers. The proposal is part of an upcoming Consumer Financial Protection Bureau rulemaking to implement certain provisions under the Dodd-Frank Act relating to loan originator compensation. The rulemaking raises a number of technical drafting issues that could have unintended consequences, cautioned ...

The rising delinquency rates for FHA-insured mortgage loans could spell trouble down the road for the FHA as it struggles to shore up its dwindling loss reserves, according to a new Fitch Ratings analysis. But the chief economist for the Mortgage Bankers Association has a slightly different take on that issue. Fitch analyst Brian Bertsch said a growing gap between seriously delinquent (90-day past due) guaranteed and non-guaranteed loans could presage future losses that could prompt the FHA to restrict loss claims and force banks to buy back defaulted loans. This could be the scenario ...

Ocwen Financial Corp. and joint venture partner Altisource will soon be buying FHA-insured loans from lenders through a special vehicle, Correspondent One, for future securitization. In its second quarter filing with the Securities and Exchange Commission, Ocwen said it expects Correspondent One will be able to use its relationship with Lenders One to grow its volume substantially. “Correspondent One has seen significant, positive environmental changes in the correspondent lending market, [and] there has been a contraction in correspondent lending,” Ocwen said, alluding to ...

VA Flunks ‘Plain Writing’ Test. The Department of Veterans Affairs got an “F” for not following the requirements of the Plain Writing Act, which directs federal agencies to take steps to ensure they are communicating clearly with businesses, consumers and stakeholders. The statute went into effect July 2011 and the Center for Plain Language, a nonprofit organization that grades government agencies on their efforts to comply with the Act, evaluated and graded 12 agencies for compliance. The center gave two grades – the first grade represents how well the agency followed the requirements of the act, and the second grade reflects ...

Single-family MBS issuance in the agency market dropped 4.8 percent from June to July, according to a new Inside MBS & ABS market analysis and ranking. A total of $133.23 billion of agency single-family MBS were issued last month, a huge 82.9 percent increase of the amount produced in July of last year. That brought year-to-date issuance in 2012 to $893.92 billion, an increase of 40.5 percent from the same period last year. Fannie Mae was the only agency to see...[Includes one data chart]

The expanded Home Affordable Refinance Program saw a major surge in business activity during the second quarter of 2012, following a similar boom during the first three months of the year, but overall refi business appears to be slowing. The Federal Housing Finance Agency this week reported a huge 86.6 percent jump in HARP volume in June, mostly resulting from a new securitization option for refi mortgages with loan-to-value ratios exceeding 125 percent. Fannie and Freddie purchased some 53,758 of such loans during June, and they accounted for 24.9 percent of HARP business during the second quarter. There was also...[Includes two data charts]

The private mortgage insurance industry is now officially under the microscope of the Consumer Financial Protection Bureau over its captive mortgage reinsurance premium ceding practices for possible violations of key federal statutes, including the Real Estate Settlement Procedures Act. The CFPB is carrying forward a number of investigations it inherited from the Department of Housing and Urban Development after passage of the Dodd-Frank Act. Critics contend that captive reinsurance programs violate RESPA’s prohibition by collecting insurance premiums without providing any real service or value to the transaction. Civil investigative demands, or CIDs, sent to several private MIs “mean...[Includes one data chart]

Encouraged by the performance so far of the recently revised Home Affordable Refinance Program, the Federal Housing Finance Authority announced this week it is working to expand the pool of borrowers eligible to refinance through HARP by aligning Freddie Mac policies with Fannie Mae’s. The agency announced the additional tweaks to HARP at the same time it said it would not sanction a Treasury Department-endorsed effort to allow the two government-sponsored enterprises to write down mortgage principal as part of loan modifications. The FHFA said that Freddie will soon issue...

A proposal by Sen. Jeff Merkley, D-OR, to help refinance non-agency borrowers with negative equity has support from the Obama administration and could begin tests without action from Congress. The proposed “Rebuilding American Homeownership” has been characterized as a Home Affordable Refinance Program for non-agency mortgages. “I think the policy is very good; it’s very well designed,” Treasury Department Secretary Timothy Geithner said in testimony last week before the Senate Committee on Banking, Housing and Urban Affairs ...