The Department of Veterans Affairs and the FHA have issued guidelines concerning the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure (TRID) rule as it relates to VA- and FHA-backed mortgages. The new TRID rule covers loan applications received on or after Oct. 3, 2015. It replaced Truth-in-Lending-Act disclosures and the Department of Housing and Urban Development’s closing (HUD-1) settlement statement. The rule requires that all covered loans be closed using the new closing disclosure. The VA has announced new closing-disclosure guidelines and a new mandatory method for the stacking order of loan files selected for full-loan review. According to the VA, all files selected for full review on or after Oct. 3 may include the HUD-1 statement. The agency is aware that loans will be requested that have the HUD-1 closing document, and that it will perform the full file review with the ...

A trade association representing large financial institutions has asked the FHA to clarify its policy regarding the use of downpayment assistance programs on home purchases financed with FHA mortgage loans. The differences in the interpretation of the Department of Housing and Urban Development’s inspector general and the FHA of downpayment assistance programs (DAP), especially by state housing finance agencies, has created uncertainty among lenders, according to the Consumer Mortgage Coalition. In a letter to HUD Secretary Julian Castro, the CMC expressed concern that lenders may become unwilling to continue offering loans with assisted financing because of legal uncertainty. “This would be unfortunate for moderate-income borrowers nationwide, and it would unnecessarily limit the ability of [state housing finance agencies] to function,” the group said. SHFAs do not rely on taxpayer funding for ...

The Department of Veterans Affairs has issued guidance clarifying certain procedures when conveying a property to the agency in Florida. Overall, it is necessary to provide proper documentation when conveying a property to VA. This usually involves providing an owner’s title insurance policy with no exclusions, other than for taxes that have not been billed but may be accrued against the property. In 2008, Florida amended its condominium and planned unit development (PUDs) laws to allow homeowner associations (HOAs) to collect unpaid dues and assessments. The purpose of the legislative change was to make current owners jointly liable with the past owner for the full amount of past-due HOA dues and assessments, unless the HOA was named in the foreclosure complaint at the time it was filed. However, if the HOA is properly named in the foreclosure, a current owner’s limited liability could be less. In order to ...

Fannie Mae, Freddie Mac and Ginnie Mae securitized $119.7 billion of correspondent-originated loans during the third quarter of 2015, a new Inside Mortgage Trends analysis reveals. That was up 8.6 percent from the second quarter. Meanwhile, broker production fell 10.6 percent during the third quarter. Brokered loans accounted for just 11.5 percent of agency mortgage-backed securities issued during the third quarter, down from 12.9 percent in ... [Includes one data chart]

Nonbanks comprised a significant portion of Ginnie Mae business as independent mortgage companies replaced banks as primary securitizers of FHA and VA loans. In the third quarter of 2015, mortgage companies accounted for 60.8 percent of VA loans and 67.1 percent of FHA loans securitized in Ginnie pools. For mortgage companies, production of Ginnie mortgage-backed securities backed by FHA loans increased by 5.0 percent in the third quarter from the previous quarter and was up a whopping 118.1 percent during the first nine months of 2015 over the same period last year. Nonbank securitization of VA loans rose by a modest 1.5 percent quarter over quarter and by 83.6 percent over the nine-month period compared to the same period last year. Megabanks, whose assets exceed $1 trillion, were the second largest issuers of Ginnie Mae MBS, accounting for less than ... [3 charts]

Some observers say the reduction in the annual mortgage insurance premium earlier this year has put the FHA Single Family Mutual Mortgage Insurance Fund on an accelerated path to recovery. Whether that is enough to get the fund back to its statutory 2 percent capital reserve ratio remains to be seen. The FHA is getting stronger faster, said Brian Chappelle, a mortgage industry consultant, in an analysis foreshadowing the FHA’s November actuarial report on the state of the MMIF. Last year’s independent actuary projected FHA’s total loan production in 2015 at $124 billion, but the MIP cut has led to a 60 percent increase in the volume forecast, said Chappelle. In all likelihood, the FHA could be looking at more than $200 billion in total originations this year, he predicted. “When a business lowers its prices, it’s going to make it up in volume,” the consultant noted. “Thus, FHA revenue is going to be ...

The number of VA loans with a deficiency fell in April from March but was up 71.7 percent from the same period a year ago, according to the VA Lender Report Card. The report card includes VA loan reviews and deficiencies by month from April 2014 through April 2015. VA loan originations over the one-year period totaled 563,967, the report showed. Of those loans, 303,149 were purchase loans, 162,447 were streamlined refinances, and 98,371 were cash-out refis. A total of 39,037 loans were reviewed by VA, which comprised about 7.0 percent of total volume. Altogether, 14,793 loans (37.9 percent) had deficiencies. The average deficiency response time was 28.1 days. Of the 1,726 loans the VA examined in April, 613 (35.5 percent) contained deficiencies, down from 1,234 loans (33.7 percent of 3,662 loans reviewed) that were found with flaws in March. The number of deficient loans found in ...

A VA mortgage servicer must immediately schedule an inspection and protect a property securing a VA loan if the property has been left vacant or abandoned by its owners. According to new guidelines issued by the VA, loan servicers must conduct an inspection immediately after becoming aware that the property’s physical condition may be in jeopardy. If local codes require more extensive protection than what VA requires, servicers should adhere to local requirements, the agency said. Failure to protect and preserve the collateral may result in a reduced guaranty claim if the servicer’s failure increased the VA’s liability on the loan. Unless the loan is undergoing loss mitigation, a property inspection is also required before the 60th day of delinquency or before starting foreclosure, whichever is earlier, the VA said. In addition, a property inspection will be required at least once a month after ...

The VA loan is a great option for veterans and servicemembers looking to purchase a new home. However, did you know it could also be paired with other home-financing programs to give the borrower a bigger bang for the buck? For instance, many real estate brokers and mortgage lenders are unaware that the VA loan can be used with certain products offered through state housing finance agencies to provide greater benefits to veterans and members of the military. The Colorado Housing and Finance Authority (CHFA) offers a tax credit program that allows VA borrowers to claim a percentage of the annual mortgage interest paid each year as a federal tax credit on their federal income tax returns. “It is not a tax deduction,” said Chad Patterson, a real estate agent with RE/MAX Traditions in Longmont, CO. “This can be a huge asset to the ...

The Department of Housing and Urban Development’s Inspector General has slammed Ginnie Mae for understating the severity of misstatements in prior year financials. In a memorandum, the HUD IG said Ginnie Mae’s inadequate disclosures in a restatement notification did not help users of financial statements understand the full impact of the material misstatements. The reporting errors were identified in an IG audit of Ginnie’s fiscal year 2014 financial statements. According to the IG, the misstatements in the 2014 audit were due to improper accounting for FHA’s reimbursable costs and the flawed accounting treatment and inadequate disclosure of borrowers’ mortgage escrow funds held in trust by Ginnie in its defaulted issuers’ portfolio. These errors may have affected Ginnie Mae’s prior year financial statements as far back as FY 2011, the IG concluded. In its audit report, the IG ...