Wells Fargo suffered a big legal setback after a federal judge denied its request to enforce a consent judgment under last year’s landmark $25 billion servicing settlement to prevent a New York lawsuit from proceeding. Judge Rosemary Collyer of the U.S. District Court for the District of Columbia rejected Wells Fargo’s argument that the new government suit filed in Manhattan district court was improper because it violated the consent judgment against Wells Fargo and flies in the face of the judgment’s “liability release” provision. Wells Fargo argued that the allegations in a civil mortgage fraud suit filed by ...

The VA is on pace in 2013 to shatter an old mortgage production record set in 1994, according to agency officials. Mike Frueh, director of the Department of Veterans Affairs’ Home Loan Guaranty Services, said the VA is “trending” to do just about 600,000 home loans even though the home buying-and-selling season, which typically kicks off in the spring, has not yet started. The last time the VA originated that many home loans was in 1994, a banner year for VA mortgage lending to veterans and active members of the military. FY 2012 became the second best year for VA loan originations with ...

The delinquency rate of single-family mortgage loans fell to 7.09 percent of all loans outstanding on a seasonally adjusted basis at the end of the fourth quarter in 2012, the lowest level since 2008, according to the latest Mortgage Bankers Association’s national delinquency survey. The performance of FHA loans, on the other hand, was “mixed,” it said.Loan delinquencies decreased 31 basis points from the prior quarter, and were down 49 basis points from a year ago due to significant improvements in mortgage performance nationwide and in almost every state, the trade group said.“The 30-day delinquency rate dropped by ...

A modest decline in FHA endorsements of jumbo loans in the fourth quarter of 2012 could presage further declines this year, following the Department of Housing and Urban Development’s recent proposal to raise the downpayment requirement to 5 percent, from 3.5 percent, for loans above $625,500. The FHA already has raised its jumbo mortgage insurance premiums to 1.55 percent annually and increased the monthly premiums on new, non-jumbo FHA mortgages by 10 basis points. The agency retained the 3.5 percent downpayment for new forward mortgages below $625,500. The increased premiums are ... [2 charts]

Industry participants who track various FHA data, including Home Equity Conversion Mortgage loans and Neighborhood Watch compare ratios, may have noticed delays in their postings. For example, the latest available data for HECM originations was in September, the end of fiscal year 2012, and no updates have been posted since. David Stevens, president and chief executive officer of the Mortgage Bankers Association, also wondered why Neighborhood Watch was down. He suspected lack of funding. A Department of Housing and Urban Development spokesman explained that the FHA’s reporting timelines and procedures are undergoing ...

NCOA Booklet Required Reading for HECM Borrowers. The National Council on Aging has announced the availability of the 2013 version of “Use Your Home to Stay at Home,”, the official reverse mortgage booklet approved by the Department of Housing and Urban Development. The booklet is designed to help older homeowners understands the pros and cons of a reverse mortgage. Federal law requires that all individuals who are considering a reverse mortgage go through pre-counseling by a HUD-approved counseling agency and receive a copy of the NCOA guide. The NCOA also offers other ...

A deeply divided House Financial Services Committee took on FHA solvency this week as critics and defenders clashed over the agency’s practices, financial health and future role in the nation’s housing market. The distinctly partisan tone of the hearing quickly raised doubt as to whether the Republican majority and their Democratic opponents can come to some compromise to strengthen the FHA and reduce its risk to taxpayers. Committee Chairman Jeb Hensarling, R-TX, echoed complaints by Republican colleagues that the FHA is ...

An announced 10 basis-point hike in the FHA mortgage insurance premium (MIP) may bolster the health of the FHA Mutual Mortgage Insurance Fund and speed up shrinkage of FHA market share, but it will also make FHA-insured loans costlier for borrowers. The increase is the latest in a series of premium hikes imposed by the Department of Housing and Urban Development in the past three years to strengthen the MMI Fund’s capital reserves, which lately have fallen to a negative position. Simultaneously, HUD announced other measures to ... [1 chart]

The FHA this week has proposed to set a 95 percent maximum loan-to-value ratio for FHA-insured loans over $625,500, effectively raising the minimum downpayment for jumbo loans from 3.5 percent to 5 percent. In a Feb. 6 Federal Register notice, the FHA said the proposed change is aimed at improving the health of the Mutual Mortgage Insurance Fund, whose statutory capital reserve ratio has fallen to a precarious level, raising the specter of a taxpayer bailout. Despite steps taken since 2009 to strengthen the MMIF, actuarial reviews of the fund have projected rising levels ...

Although unhappy about the demise of the popular, fixed-rate, standard Home Equity Conversion Mortgage, loan officers are not worried about any long-term adverse effect on their FHA businesses. In fact, members of the National Reverse Mortgage Lenders Association, support the FHA’s decision, which is a part of a broad effort to strengthen and better manage the risk of the agency’s Mutual Mortgage Insurance Fund. They said they have other HECM products to offer in lieu of the standard HECM loan. Beginning April 1, borrowers who choose a fixed interest rate will be limited to ...