At the end of FY 2013, Congress will be looking at the results of two, separate actuarial audits of the FHA Mutual Mortgage Insurance Fund that may or may not agree with each other’s findings. Nonetheless, the FHA contends it needs a second actuarial opinion on the FY 2013 audit to ensure that the review of the financial condition of the MMI Fund is robust, thorough, consistent, accurate and transparent. “The FHA recognizes the value of having ‘fresh eyes’ on our insurance fund – new perspectives and different analytical models will give us a more ...

The Department of Housing and Urban Development is phasing out the Saver and Standard loan products under the Home Equity Conversion Mortgage program in favor of a new reverse mortgage that limits the amount of money a borrower can draw at closing to 60 percent of the value of the home. The fixed and adjustable HECM Standard and Saver options will still be available until Sept. 29, said HUD. The revised principal limit, pricing and disbursement policies for the new HECM product will become effective on Sept. 30. The revised HECM guidance also ...

The Department of Housing and Urban Development has issued guidance establishing general procedures for mortgages and foreclosures on tribal lands. The Model Tribal Mortgage Lending Code is designed to meet the needs of mortgage loan guaranty, insurance and direct loan programs of the FHA, the Home Loan Guaranty program of the Department of Veterans Affairs, and the Rural Housing Program of the Department of Agriculture. Each of the federal agencies offers various mortgage-loan programs for Native Americans who wish to live on tribal trust lands or within a tribal area. The Housing and Community Development Act of 1992 created ...

The Department of Housing and Urban Development has charged Fifth Third Bank and a mortgage broker with discrimination for allegedly requiring medical proof from a couple with disabilities who were seeking FHA refinancing. Fifth Third Bank, Fifth Third Mortgage Co. and Cranbrook Mortgage Corp. were accused of violating the Fair Housing Act, which makes it illegal for creditors to deny or discriminate against borrowers based on disability, race, color, religion, national origin, gender or family status, including imposing different application or criteria on protected classes. The married couple, whose names HUD withheld, receive ...

Many of the lenders with high default rates are smaller companies while those with larger portfolios tend to perform better than the national average, according to Inside FHA Lending’s analysis of compare ratios on two-year FHA loan portfolios. The compare ratio is the percentage of a lender’s default and claim rate compared to the national average. It is shown as a numerical value, which HUD uses to determine lender performance. A compare ratio of over 150 percent will land a lender on HUD’s watch list and a ratio greater than 200 percent could result ... [1 chart]

The Department of Veterans Affairs has announced it will accept electronic signatures in closing home loans with a VA guaranty. The VA said lenders are not required to use electronic signatures in VA loans but if they choose to, they must comply with the Federal Electronic Signatures in Global and National Commerce Act, or the E-Sign Act. The measure was signed into law in June 2000. The E-Sign Act establishes the baseline rules for Internet commerce, including nondiscrimination between handwritten and electronic signatures. The law also requires that electronic records be ...

VA Loan Guaranty: New Percentage to Determine Net Value of Collateral. The Department of Veterans Affairs has revised the percentage lenders and mortgage holders in the VA loan guaranty program use in calculating the purchase price of a property that secured a terminated loan. Effective Oct. 8, 2013, the new percentage is 14.95 percent, up from 11.87 percent, which has been in place for the past 12 years. North Carolina Amends Anti-Predatory Lending Law. The Tar Heel State enacted HB 692 on Aug. 23 to strengthen current consumer protections against ...

The sale of residential mortgage servicing rights (MSRs) tied to Ginnie Mae mortgage securities is gathering steam with a handful of large deals currently in the market. Bank of America recently held an auction for $22 billion of legacy Ginnie MSRs, according to investment bankers familiar with the offering. Final bids were being taken this week. A winner has yet to be declared. A spokesman for BofA told Inside FHA Lending that in general the bank does not comment on MSR sales, though it has made exceptions when unloading very large packages. Earlier this year, for example, it sold just over ...

FHA lenders have gradually stretched to originate loans for borrowers with more modest credit scores in recent quarters, although these borrowers typically are better positioned to keep up with their payments, according to an Inside FHA Lending analysis of data released by the agency. The average credit score for single-family loans endorsed in the second quarter of 2013 was 693 – the lowest such average in nearly four years. This is partly the result of a shift toward more purchase-money mortgages, which generally have ... [1 chart]

Sen. Elizabeth Warren, D-MA, is asking the Department of Justice to explain why it failed to get “adequate” compensation from major mortgage servicers for fraud committed against the FHA. In an Aug. 21 letter to U.S. Attorney General Eric Holder, Warren raised concerns about the $225 million paid by five servicers last year to obtain releases from False Claims Act liability stemming from fraudulent mortgage insurance claims the servicers submitted to FHA and other agencies from 2008 to 2010. The FHA’s woeful financial condition led to legislative reform efforts, including the ...