VA Issues Warning. Loans reported for guaranty more than 60 days after loan closing will be subject to automatic full review, the Department of Veterans Affairs warned. In guidance issued earlier this month, the VA reminded lenders that they must enter guaranty requests in the VA’s webLGY system within 60 days of closing or risk going through another review and additional requirements. If a loan is guaranteed late, the lender must include a brief explanation and a certification that the loan was current when they submitted the file to VA. Timely reporting of loans for VA guaranty ensures ...

Reaction to a report about Obama administration efforts to get banks to increase their purchase mortgage lending, particularly through the FHA, has ranged from supportive to dire warnings of déjà vu. Apparently, administration officials are trying to push banks to make more loans to qualified lower-income borrowers as well as minority and first-time homebuyers who have been shut out of the mortgage market because of stringent credit overlays. The report, which ran in the April 2 Washington Post, described the targeted borrowers as “people with weaker credit,” which, for some, conjures up the ...

The FHA is seeking comment on a proposal to change the period for reviewing loans for direct endorsement from pre- to post-closing in order to increase the number of acceptable loans and, therefore, reduce any potential risk to the Mutual Mortgage Insurance Fund. Under the proposal, a lender applying for unconditional direct endorsement authority would be required to submit the necessary loan files only after closing. After determining that the mortgage is acceptable and meets all FHA requirements, the agency would notify the lender that the loan has been endorsed. Current regulations provide for ...

With the deadline for filing individual income tax returns just around the corner, the FHA has reminded lenders of its rules regarding the eligibility of a borrower who has a delinquent federal tax debt or lien. According to the FHA, an individual with an overdue federal tax debt or tax lien is not eligible for an FHA-insured mortgage loan until the delinquent account is either brought current, fully paid or is resolved by a satisfactory repayment plan agreed to by the borrower and the federal agency owed. Tax liens may remain unpaid as long as the lien holders subordinate the tax lien to the ...

The FHA may allow a borrower’s 401(k) retirement fund to be included in the calculation of debt-to-income (DTI) ratio, according to the agency. Normally, up to 60 percent of the fund’s value may be included in the DTI ratio, the agency said. Fund assets, such as Individual Retirement Accounts, thrift savings plans, 401(k) retirement plan and Keogh Accounts, may be counted in the underwriting, it added. The rule remains applicable unless the borrower presents proof that a higher percentage may be withdrawn after subtracting any federal income tax and withdrawal penalties. In such cases, the lender would ...

Funding for a federal program providing guarantees to mortgage loans to Native Americans and other indigenous peoples has been spared from mandatory budget cuts under a temporary budget measure signed into law by President Obama last month. The Department of Housing and Urban Development has resumed accepting new loan applications under the Section 184 Indian Home Loan Guarantee Program. The mortgage product is for American Indian and Alaska Native families, Alaskan tribal members and tribally designated housing entities. Congress established the program in 1992 to ...

Ginnie Mae issuance fell in the first quarter of 2013 but was easily offset by significant gains from a year ago, according to Inside FHA Lending’s analysis of FHA data. Mortgage-backed securities production at the government facility dropped 5.1 percent to $104.1 billion in the first quarter but increased 28.6 percent year-over-year , which was more than enough for an offset. The securities were backed mostly by FHA and VA loans with a combined total of $99.33 billion. Federally guaranteed rural housing loans totaling $4.84 billion were also in the mix. Wells Fargo and Chase Home Finance led the Ginnie Mae market with a combined ... [1 chart]

Two differing notions have emerged during a recent hearing in the House Financial Services Subcommittee on Housing and Insurance regarding the rapidly changing relationship between private mortgage insurance and the FHA single-family mortgage insurance program. One view is that FHA’s existing policies either ignore or violate basic regulatory principles and continue to crowd out private capital. Compared to state-regulated private MIs, the FHA has far less stringent standards and enforcement from a regulatory perspective has been disappointing. Proponents of this view say that ...

The Internal Revenue Service is preparing to launch an industry-wide review of housing counseling agencies, including those approved by the Department of Housing and Urban Development, as well as other tax-exempt entities that provide mortgage foreclosure assistance, compliance experts warned. In fact, the IRS has started looking at providers that have applied for tax-exempt status in recent months and has denied three organizations in February 2013 alone, according to attorneys with the Washington, DC, law firm Venable. Housing counseling agencies can use the issues raised in the “private letter” rulings as a ...

A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUD’s budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUD’s entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...