VA originations set a new record in the fourth quarter despite a slump in purchase lending. Nonetheless, purchase mortgages accounted for a large share of total VA business in 2019.
Community mortgage lenders are asking FHA to drop its life-of-loan premium policy that requires borrowers to pay annual mortgage insurance premium until their loan is fully paid.
The bank is considering reentering the FHA market, which it fled in 2014 due to tougher regulations and onerous monetary penalties for violating lending rules. The exit of large banks allowed nonbanks to establish a foothold and the correspondent market to flourish in the FHA space.
The revised defect taxonomy will hardly nudge banks to return to or increase participation in FHA programs despite tighter standards for identifying and curing defective loans, according to industry stakeholders.
In 2020, FHA is poised to take a significant chunk of high-risk business as Fannie and Freddie continue to draw back from the over-95% LTV market. VA is expected to continue its slow-growth trajectory.
Based on FHFA’s new 2020 loan limits, VA announced guidance for deter-mining the guarantee on loans to veterans with partial entitlement while Ginnie revised its definition of “high balance” loans.
Borrower demand for FHA-insured loans was strong in the third quarter due to low interest rates. Not surprisingly, refinance activity, streamline refinancing in particular, provided the boost.
VA loan-related provisions in the Blue Water Navy Vietnam Veterans Act of 2019 raise the maximum amount of entitlement available to veterans, the maximum guarantee of loans in excess of $144,000, a revised VA funding-fee table and a fee waiver for certain vets.