VA loan servicers are now required to request a redemption quote from the agency’s property management contractor, Vendor Resource Management (VRM), to avoid any confusion in the future about such quotes. In recently issued guidance, the VA established standard procedures for redeeming VA property, after foreclosure, in states that allow “statutory redemption.” Statutory redemption refers to a borrower’s right to regain ownership of his or her home that has been foreclosed. Statutory redemption laws allow the borrower a limited amount of time to redeem their property if they are able to buy it back at the price for which it was sold at foreclosure. The redemption window varies by state and ranges from 30 days to 2 years. At the time of redemption, the entire underlying mortgage debt plus interest, foreclosure fees and other costs are due. In most cases, the servicer has ...

Price reduction and improving economic factors helped push FHA volume up in the first quarter of 2015, according to an Inside FHA/VA Lending analysis of agency data. Production of forward single-family mortgages insured by FHA increased by 12.3 percent in the first quarter to $39.5 billion from $35.2 billion in the prior quarter, powered by a sharp uptick in refinances. FHA’s total refi business jumped from $2.29 billion in endorsements in February, a month of record snowstorms in the Northeast, to $8.15 billion in March. Total FHA forward-mortgage business rose by 83.8 percent from February, data showed. FHA streamline refis rose a whopping 144.1 percent quarter-over-quarter while conventional-to-FHA refis jumped 29.2 percent over the same period. Falling purchase loan volume, which was the reason for the overall decline in FHA originations last year, spilled over into ... [2 charts]

The Veterans Administration’s home loan guaranty program has racked up some serious refinance numbers in recent months, causing primary mortgage insurers to lose some market share during the first quarter of 2015, according to an Inside Mortgage Finance analysis of guarantor activity. Streamline refinance loans accounted for 59.0 percent of VA loans securitized by Ginnie Mae during the first three months, compared to just 32.8 percent of private MI loans securitized by Fannie Mae and Freddie Mac over the same period. In addition, the VA had the highest average loan size among insured mortgages in the first quarter, approximately 7.2 percent larger than the average loan with private MI. Private mortgage insurers provided coverage on $45.2 billion of mint conventional mortgages during the first quarter, down 5.3 percent from the fourth quarter of last year. VA and FHA originations also increased over the same period by 6.0 percent and 5.5 percent, respectively. FHA forward originations surged ... [1 chart ]

The VA share of total loan applications (purchase and refinancing) for the week ending May 8, remained unchanged at 11.9 percent while FHA’s share fell to 13.8 percent from 14.0 percent the week prior, according to the Mortgage Bankers Association’s latest weekly survey of applications. VA purchase loan applications were up a smidgen, 0.2 percent, for the week while FHA purchase applications were up slightly higher, 0.6 percent. Refi applications at both agencies, however, were down for the week – 11.5 percent for FHA and 5.1 percent for VA. Meanwhile, the Rural Housing Service’s share of total applications rose to 0.9 percent as of May 8, from 0.8 percent the week prior. While there was no change in RHS’ share of refi loan applications during the week, its purchase loan applications was up 8.6 percent, a hefty increase for an agency that accounts for only a ...

New life-of-loan representation and warranty- exclusion guidelines issued by the GSEs in November, appeared to have little impact on banks’ lending policies so far, according to a recent Federal Reserve Board survey.The rep-and-warrant changes were intended to reduce uncertainty and increase transparency in addressing lenders’ concerns about when they might be asked to repurchase a loan. The concerns were based on repurchase risk and other market factors that can cause an increase in credit overlays. “Addressing these concerns by providing tighter definitions and clarity should encourage sellers to serve a broader range of qualified borrowers,” said Dave Lowman, Freddie’s executive vice president of single -family business, when the changes were announced in November.

VA home loan guaranty originations nearly caught up with FHA single-family volume in the first quarter of 2015, thanks to a strong pickup in veteran loan refinancings, an Inside FHA/VA Lending analysis of Ginnie Mae issuance data indicated. Refi loans accounted for 58.5 percent of VA loans securitized in the first quarter compared to just 34.4 percent of FHA loans in Ginnie mortgage-backed securities. Approximately $35.0 billion in VA loans were securitized in Ginnie Mae MBS in the first quarter, up 5.5 percent from the fourth quarter of 2014. On the other hand, $35.6 billion of FHA loans were securitized during the same period, down 1.8 percent from the prior quarter. Of the VA loans in Ginnie MBS, $14.5 billion were purchase mortgages, mostly delivered through retail and loan correspondents. Brokers accounted for only 8.5 percent of the purchase loans. Securitized VA purchase volume, however, was ... [2 charts]

Quicken Loan’s lawsuit against the government could help provide some certainty to lenders as to the proper legal standard for evaluating compliance with FHA rules and whether loan sampling is a permissible post-endorsement review strategy, according to legal experts. The adjudication of Quicken’s case against the Department of Justice in a public forum should clarify FHA policies, procedures, and the degree of future liability risks, experts said. Quicken Loans, the top FHA lender in 2014, sued the Department of Justice in federal court in Detroit April 17, accusing it of high-pressure tactics to admit wrongdoing and of using a small sample of flawed loans as a basis for claims under the False Claims Act. Up to that time, Quicken Loans had been the subject of an ongoing DOJ probe, which began three years earlier, in relation to its FHA lending practices. Quicken also asserted that, before filing its lawsuit ...

FHA jumbo loan production dropped significantly in 2014, according to an Inside FHA/VA Lending analysis of agency data. The volume of jumbo loans insured by the FHA – loan amounts exceeding $417,000 up to the national ceiling of $625,500 – fell 41.9 percent from the prior year, and 4.4 percent in the fourth quarter of 2014 from the previous quarter. FHA jumbo production for 2014 totaled $10.5 billion, with purchase loans accounting for nearly 80 percent of volume and fixed-rate loans comprising 87.1 percent of jumbos originated last year. Seventy-two percent of lenders saw their jumbo volume decline, including Provident Savings Bank, which suffered the largest year-over-year drop (84.9 percent). An analysis of FHA endorsements by loan amount show that loans above $417,000 up to $499,000 accounted for 2.12 percent of loans endorsed in the first quarter. Additionally, loans from $500,000 to ... [1 chart]

A high percentage of VA loans are not closing on time, potentially creating a disincentive for borrowers to use the product and opt for the competition instead, according to the latest Campbell/Inside Mortgage Finance’s HousingPulse Tracking Survey. Data showed that the share of VA loans closing on time declined to 55 percent in March 2015 from 70 percent in April 2014. This suggests that 45 percent of VA loans are experiencing serious delays in closing. “For VA, this is a significant change for the worse,” said Tom Popik, designer of the survey. The VA’s average closing time is 41 days as of March this year, up from around 39 percent a year ago. Comparatively, 75 percent of Fannie Mae and Freddie Mac loans with private mortgage insurance are closing on time as of March 2015, up from 68 percent a year ago. When delayed, VA closing takes a lot longer, 29 additional days, up from ...

The FHA Single-Family Policy Handbook’s effective date has been changed from June 15 to Sept. 14, 2015, the agency has announced. The affected sections include the following: Doing Business with FHA – Lenders and Mortgagees; Doing Business with FHA – Other Participants – Appraiser; and Quality Control, Oversight and Compliance. The section for Origination through Post Closing/Endorsement (OTPC/E) becomes effective for FHA case numbers assigned on or after Sept. 14. All applicable existing single-family handbooks, mortgagee letters and policy documents continue to apply until the OTPC/E section becomes effective, the agency said. A number of competing initiatives prompted the change of effective date. The FHA expects lenders to be fully compliant by Sept. 14. The FHA will continue to issue mortgagee letters periodically to ...