The Department of Veterans Affairs is seeking clearance for two information-collection forms that are crucial to a veteran’s ability to obtain or cure a VA-guaranteed mortgage loan. The Office of Management and Budget is currently reviewing the forms. The VA also has published notices in the June 1 Federal Register seeking public comment on the proposed revised forms. Comments for both notices are due July 3, 2017. The first form relates to information a veteran must provide to be exempted from paying a funding fee. Borrowers are required to pay a funding fee to obtain a loan with a VA guaranty, unless the borrower is a disabled veteran receiving VA compensation for his or her service-connected disability. Loans made to unmarried surviving spouses of veterans who have died in service or from a service-related disability also are exempted from payment of the funding fee (regardless of whether the ...

Ginnie Mae is sailing without a captain, a fact that is causing some concern among mortgage bankers and mortgage-backed securities investors. The agency tasked with securitizing government-backed mortgages has been without a president since Democrat Ted Tozer left on Jan. 20, 2017, the same day that President-elect Donald Trump was sworn in as the 45th president of the United States. Since that time, Nancy Corsiglia, a career Ginnie official, has been acting president. She was elevated from her position as chief operating officer. Industry officials who claim to have knowledge of the selection process maintain that mortgage banke David Kittle, president of the Mortgage Collaborative, is the leading candidate to fill the post with Michael Bright, a director at the Milken Institute, a close second. One source close to the situation claimed that background checks by the Trump White House are likely ...

Reverse-mortgage originations with FHA insurance rose in the first quarter of 2017 from the prior quarter and from the same period last year despite a long-term slowdown in Home Equity Conversion Mortgage activity, an analysis of agency data found. HECM lenders, including an increasing number of nonbanks, produced $4.5 billion in new HECM loans during the first three months of 2017, up 16.9 percent from the prior quarter. Production also was up 16.6 percent year-over year. Purchase reverse mortgages comprised 83.6 percent of HECMs produced during the period. Borrowers appeared to favor reverse mortgages with adjustable rates over fixed-rate HECMs, which accounted for only 10.7 percent of HECMs in the first quarter. Despite increased originations in the first quarter, FHA data show a gradual decline in HECM endorsements since peaking in FY 2009 with ... [Charts]

An industry trade group is requesting that the Consumer Financial Protection Bureau exclude reverse mortgages from the income-reporting requirement of the Home Mortgage Disclosure Act.The National Reverse Mortgage Lenders Association is seeking an exemption similar to the HMDA exemptions for rate spread; Home Ownership and Equity Protection Act status; origination charges; discount points; lender credits; total loan costs; points and fees; prepayment penalty term; and balloon payments. However, should the CFPB require income reporting on reverse mortgages, the NRMLA would want further guidance and clarification. Home Equity Conversion Mortgage loans make up over 99 percent of the reverse mortgage market today, and have not dropped below 85 percent since 1993, according to the group. NRMLA’s request is part of a broader comment on ...

VA originations saw a significant drop during the first three months of 2017 as refinancing continued to slow, according to an Inside FHA/VA Lending analysis of agency data. Lenders closed $42.9 billion of VA loans in the first quarter, down 28.1 percent from the previous quarter The numbers show purchase mortgages continued to drive VA originations. A slowdown in VA refinancing appears to be the key factor in the decline. Refis accounted for 27.7 percent of total VA production, down from the fourth quarter of 2016. A change in Ginnie Mae’s pooling rules aimed at discouraging churning has taken much of the steam out of the once-booming VA refi segment. The steep drop in volume ended an upward quarter-to-quarter trend in VA originations last year. Eight of the top 10 VA lenders saw huge quarter-over-quarter declines in their VA lending, with top-ranked Freedom Mortgage posting the largest ... [ Charts ]

The Financial Services Roundtable called for changes to FHA’s legal liability standards to encourage banks to make more FHA loans. Increased risks of False Claims Act enforcement and concerns about multi-million dollar penalties even for the slightest underwriting errors have forced banks to restrict their FHA lending. The top 10 FHA lenders, once dominated by banks, are now nondepository institutions, which accounted for 83 percent of FHA forward originations in the first quarter of 2017. Wells Fargo, once the leader in FHA lending, has dropped to a woeful 20th place in the rankings. “Some federal officials have expressed concern about the capacity of the government to evaluate the qualifications of lenders that are not subject to regulation by federal agencies,” the FSR said. The group also noted the credit overlays many FHA lenders have added to the loans due to ...

False Claims Act enforcement against FHA lenders appears to have slowed with no new cases being filed by the Department of Justice or referred by the Department of Housing and Urban Development’s inspector general for nearly a year. Neither agency has gone after any lender for alleged False Claims Act violations since May of last year when the Department of Justice intervened in an FCA case brought by a whistleblower against Guild Mortgage, an FHA direct endorsement lender. The complaint alleged that San Diego-based Guild Mortgage knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. The alleged violations occurred between 2006 and 2011, resulting in “tens of millions of dollars” in losses to HUD. The case is pending in federal district court in Washington, DC. Indications are the FCA cases involving FHA lenders have ...

Requesting a certificate of eligibility (COE) may be just a click away but the process is not without pitfalls, cautioned a panel of VA loan production officers during an industry conference. The panelists – Maxine Henry, program analyst with the VA Central Office; Ricardo Holloway, loan production officer with the Atlanta Regional Loan Center; and Paula Jesse, assistant loan production officer with the Denver RLC – urged veterans to order their COE early in the loan-application process to avoid any hiccups. A COE verifies to the lender that the veteran/borrower is eligible for a VA loan. Ordering early would help prevent last-minute delays, said Henry. “It is a problem if the veteran is at the closing table and still does not have a COE because it was ordered just a few days prior to closing,” Henry noted. Other potential hitches are incorrect documentation or receiving a VA determination that the ...

Loan processing for incompetent veterans presents significant challenges to VA lenders, requiring strict compliance with special guidance on top of the basic VA underwriting rules. One challenge is dealing with legal appointees who assist and represent veterans in legal transactions, such as applying for a mortgage loan. There are ways to determine whether a veteran is incompetent, said Mark Jamison, loan production officer (LPO) with the VA Cleveland Regional Center, during the VA Lender Conference in Kansas City, MO, last month. The Department of Veterans Affairs or a probate court can deem a veteran incompetent due to severe injury, medical conditions, mental disorders, and financial instability, he said. A mortgage lender could make a determination of incompetency if the initial purchase contract documents were signed by an attorney-in-fact, the veteran divulged the incompetency, or the ...

Moody’s Rates Credit Suisse FHA Securitization Transaction. Moody’s assigned investment-grade ratings to Credit Suisse’s first securitization deal in 2017 backed by seasoned re-performing and performing, fully amortizing, fixed- and adjustable-rate mortgages insured by FHA. The deal is the first FHA-insured re-performing transaction since 2010, according to the rating agency. The collateral pool is comprised of 672 first-lien, fixed-rate loans and ARMs with a weighted average updated FICO score of 614 and loan-to-value ratio of 94.2 percent. Approximately 82.4 percent of the loans in the collateral pool were previously modified. Approximately 52.8 percent of the loans have been current for at least 24 months. Another 17.3 percent of the loans have been current for more than 12 months. Comments Sought on Various Information Collection Proposals. The Department of Housing and ...