Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]

Half of the loans in the Distressed Asset Stabilization Program have been resolved and a significant percentage of homeowners have avoided foreclosure, according to the latest DASP progress report from the Department of Housing and Urban Development. A review of the FHA single-family loan sale (SFLS) program found that, of the 48.6 percent that have been resolved, 43.5 percent have avoided foreclosure. The anticipated alternative for these borrowers – property conveyance, where their property becomes real estate-owned – would have led to foreclosure, the report said. Specifically, short sales and deeds-in-lieu of foreclosure were the disposition methods employed in foreclosure avoidance. In addition, 16.3 percent of resolved loans were re-performing as of Feb. 6, 2015. This reflects a 49.5 percent change in the re-performing rate reported in the ...

Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...

The FHA’s request for authority to require specialized subservicing in certain circumstances could be included in an appropriations bill rather than in housing-related legislation, according to Sen. Jack Reed, D-RI, ranking minority member of the Senate Appropriations Subcommittee on Transportation, HUD and other Related Agencies. Reed raised the possibility during a recent hearing on the Department of Housing and Urban Development’s FY 2016 budget proposal. Among other things, the FHA has been seeking authority from Congress to require, in individual cases, inexperienced lender/servicers to transfer the function to a specialized servicer to better assist borrowers and reduce losses to the Mutual Mortgage Insurance Fund. Allowing the FHA to require transfer of servicing will help more distressed homeowners stay in their homes and avoid foreclosure, said ...

Issuer registration for Ginnie Mae’s Issuer Performance Scorecard has been somewhat slower than expected, according to agency officials. The reason is unclear but only about 70 issuers so far have registered for Ginnie’s Issuer Operational Performance Profile (IOPP) tool since its launch on Feb. 17, 2015. Officials said they need to sign two-thirds more to get the IOPP system up to full speed. In a recent outreach call, officials urged those issuers who have not yet registered to contact their security officers for authority to access the Ginnie Mae Enterprise Portal (GMEP), the gateway to the IOPP system. Issuers must first be enrolled in GMEP before their security officer can grant them authority to access the IOPP system. The IOPP, also known as the Issuer Performance Scorecard, will rate each issuer’s operational performance and default management and compare them to ...

FHA launched into the new year with a slight dip in forward mortgage loan originations in January from December with nonbanks leading the charge, according to Inside FHA Lending’s analysis of agency data. Lenders originated $11.8 billion in FHA-insured loans in January, a 0.7 percent decrease from December and down 3.5 percent from the prior year. FHA was charging a higher annual mortgage insurance premium of 1.35 percent for most of the month until a 50 basis point reduction, effective Jan. 26, lowered the MIP to 0.85 percent for a 30-year, fixed-rate mortgage with a five percent downpayment, and down to 0.80 percent for a similar FHA loan with more than five percent downpayment. The impact of the reduced MIP on February originations is still unclear, but most FHA lenders are expecting a boost in volume because many consumers ... [1 chart]

Ginnie Mae will restate its FY 2014 and FY 2013 financial statements after federal auditors withheld their opinion for lack of sufficient information because of accounting anomalies and poor servicing oversight. An audit report issued by the Department of Housing and Urban Development Inspector General said the issues in the FY 2014 financial statement arose from servicing problems associated with a defaulted issuer’s portfolio, which Ginnie Mae is currently managing. The portfolio once belonged to the now-defunct Taylor, Bean & Whitaker, a Florida-based loan originator and a top Ginnie Mae issuer.The FHA suspended TBW in August 2009 due to its failure to submit a mandatory annual report and to disclose certain transactions that suggested fraud. Soon after, Ginnie Mae terminated TBW as an issuer/servicer and seized the company’s $25 billion Ginnie MBS portfolio. According to the IG report, ...

The Department of Justice shows no sign of letting up in its pursuit of FHA lenders that originate improperly underwritten mortgages that later result in significant taxpayer losses. MetLife Home Loans, which is no longer in operation, became the newest addition to the government’s growing list of financial institutions that opted to settle allegations brought under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, in connection with the origination and servicing of FHA-insured mortgages. Under the agreement, MetLife will pay $123.5 million to resolve allegations that its predecessor it “[turned] a blind eye to mortgage loans that did not meet basic FHA underwriting standards,” and stuck the FHA and taxpayers with the bill when the loans defaulted. In June 2013, MetLife Bank merged into MetLife Home Loans, a mortgage finance company ...

The FHA’s recent decision to reduce its annual mortgage insurance premium by 50 basis points pushes back the agency’s timeline for attaining the 2 percent capital reserve requirement by 2016 and limits private mortgage insurance companies’ ability to serve borrowers with higher loan-to-value ratios, warned MI industry representatives. Testifying before the House Financial Services Subcommittee on Housing and Insurance, Clifford Rossi, chief economist of Radian Group, said the FHA sought to justify the premium cut by saying it far exceeded the amounts necessary to cover new FHA-insured mortgages. “But this ignores the higher expected losses on earlier insured loans,” he said. Comparing lifetime premiums on current borrowers to their projected average lifetime losses is not a meaningful comparison for an insurance portfolio comprised of borrower risk profiles over book years subject to different economic scenarios, Rossi argued. Moreover, comparing premiums to average losses overlooks ...

The FHA bucked a decreasing delinquency-rate trend for all other types of loan by posting an increase in past-due loans during the last three months of 2014, according to the Mortgage Bankers Association’s latest national delinquency survey. On a seasonally adjusted basis, the overall delinquency rate fell 17 bps for all loan types to 5.68 percent, MBA data showed. Data compiled by the Inside Mortgage Finance Large Servicer Delinquency Index also showed a sizeable decline of 32.7 basis points in the fourth quarter from the prior quarter. The 24 servicers covered by the index had a delinquency rate of 6.34 percent in the fourth quarter, down from 7.59 percent in the same period the prior year. The IMF data are not seasonally adjusted. In contrast, the FHA delinquency rate rose to 9.73 percent in the fourth quarter, up 4 bps from the previous quarter, according to the MBA. On the other hand, loans with a ...