Ginnie Mae has issued a clarification as to when issuers can buy certain loans out of the pool and redefined certain familiar terms used by government agencies in insuring or guaranteeing mortgage loans. The agency’s mortgage-backed securities guide allows issuers to purchase loans out of pools when the borrower has missed three consecutive monthly mortgage payments or is 90 days past due. However, the guide is unclear whether the issuer must wait at least three months before buying a loan out of the pool if the borrower is making at least a partial payment while the loan is in default. Ginnie Mae made clear in a May 16 memo that issuers may purchase a loan from an MBS pool even though it is seriously delinquent. For example, if the last installment payment on a mortgage loan was Dec. 1 and the borrower missed payments in ...

President Obama is expected to announce his intent to nominate Housing and Urban Development Secretary Shaun Donovan as director of the Office of Management and Budget and San Antonio Mayor Julian Castro to replace him. If confirmed by the Senate, Castro would be the second Hispanic after Henry Cisneros to assume the top post at the Department of Housing and Urban Development. Also a former mayor of San Antonio, Cisneros served as HUD secretary during the Clinton administration from 1993 to 1997. Currently in his third term as mayor, Castro is a strong advocate of affordable housing, neighborhood revitalization, inner-city investment and child education and works closely with the San Antonio Housing Authority. San Antonio mortgage bankers said they have had little interaction with Castro, who, they say is “big on housing issues.” “We’re hoping to hear a little bit more about his ...

Issuance of mortgage bonds with a Ginnie Mae guarantee fell during the first three months of 2013 as higher FHA costs and all-cash home sales appeared to drive the decline, according to Inside FHA Lending’s analysis of agency data. Ginnie Mae issuers closed the first quarter with MBS issuances totaling $58.2 billion, down 19.0 percent from the fourth quarter of 2013. The drop was steeper on a year-over-year basis, 41.3 percent, data showed. FHA accounted for $30.6 billion of government-backed mortgage securities issued during the period, while VA and Rural Housing Development (Department of Agriculture) accounted for $19.1 billion and $4.1 billion, respectively. Top Ginnie Mae issuer Wells Fargo closed out the first quarter with $12.5 billion, down 28.1 percent from the previous quarter and off 59.9 percent from the same period a year ago. Wells’ volume accounted for ... [1 chart]

Servicers of mortgage debt issued by Ginnie Mae reported a slight uptick in government-backed debt outstanding in the first quarter of 2014 though not enough to cause a ripple in a market that has been generally flat since the end of the third quarter last year, according to Inside FHA Lending’s analysis of Ginnie Mae data. Ginnie Mae servicers reported an increase of 0.9 percent in servicing volume from the fourth quarter of 2013 following a 0.2 percent decline in the prior quarter. Volume, however, increased 7.3 percent in 1Q14 compared with volume a year ago. Servicers ended the first quarter with a total of $1.44 trillion in Ginnie Mae mortgage servicing, up from $1.43 trillion in the fourth quarter. Major banks comprised four of the top five Ginnie Mae servicers. Wells Fargo’s overall servicing portfolio declined to $426.7 billion in the first quarter, down ... [ 1 chart]

A revised-areas map that meets the new definition of “rural area” for U.S. Department of Agriculture housing programs is now available to USDA lenders and borrowers seeking affordable rural-home financing. The map was posted on the USDA Income and Property Eligibility Site on May 6 and users may access it by selecting “single family housing” under the Property Eligibility menu. More details about the changes will be available soon in frequently asked questions guidance, the agency said. The new definition of rural area is contained in the Agricultural Act of 2014 (Farm Bill), which was enacted on Feb. 7 and made changes to federal rural development programs. Among other things, the bill redefined rural areas as those with populations up to 35,000 that are “rural in character” for eligibility in the USDA housing programs. The previous population requirement was less than 20,000 people. The area must be ...

Ginnie Mae has held up for several weeks an $8 billion sale of servicing rights from Bank of America to a nonbank because of missing documents on government-backed mortgages. Ted Tozer, president of the agency, confirmed the delay in approvals to Inside FHA Lending, but declined to name the nonbank on the buy-side of the transaction. However, sources familiar with the deal identified the counter-party as PennyMac. BofA and PennyMac would not comment. Once the missing documents are located and placed in the proper files, the deal will move forward, said Tozer. Tozer noted that that in the past the agency did not lose sleep over large MSR transfers because up until three years ago the nation’s megabanks were buyers of MSRs. “We knew they had the financial strength to make the P&I [principal and interest] payments” to the MBS investors, he said. But with nonbank servicers, such as Green Tree, Nationstar Mortgage, Ocwen Financial as well as PennyMac, rapidly growing their portfolios, the agency is ...

The Consumer Financial Protection Bureau will launch a new, voluntary pilot project later this year to promote e-closings as a way to reduce or eliminate many of the “pain points” associated with the mortgage closing process. But officials at FHA and Ginnie Mae were eager to jump on board and reinvigorate similar efforts of their own in this regard, as many government and industry representatives tried to capitalize on a renewed sense that e-mortgages and a greater use of technology can transform the entire origination process – for all stakeholders, not just consumers. “We’re very excited to see the continued advancement of not only the use of technology, but hopefully more effective means of working together as an industry to improve the overall mortgage process,” said FHA’s Patricia McClung, acting director of single family program development, at a public forum ...

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

Home Loan Servicing Solutions recently completed its first acquisition of Ginnie Mae whole loans through the agency’s early buy-out (EBO) program. The purchase price for the FHA-insured loans was $556.6 million. HLSS acquired the loans from Ocwen with an unpaid principal balance (UPB) of $549.4 million. Ocwen initially acquired the loans through the GNMA EBO program, which allows Ginnie Mae servicers to purchase delinquent loans from applicable loan securitization pools. HLSS financed its purchase by opening a new $600 million mortgage loan facility. It received $472.7 million in proceeds from this facility to help fund its EBO loan purchase from Ocwen. The loans are held as investments in a special purpose entity (SPE). “It is our expectation that since our GNMA EBO loans are insured by the FHA, the cash flows of this SPE will be sufficient to meet all claims of the debt holders,” the company said ...

Bank of America and James Nutter & Co. have agreed to indemnify the Department of Housing and Urban Development to resolve allegations that they failed to perform due diligence in underwriting Home Equity Conversion Mortgage loans. An audit of the HECM program by the HUD Office of Inspector General found that the financial institutions allowed 33 HECM borrowers to take out more than one loan, a violation of program requirements. The program requires borrowers to reside in the mortgaged residence as their principal residence. In addition, borrowers may not have more than one principal residence at the same time. In BofA’s case, one borrower obtained two HECM loans on properties she owned in Massachusetts and Florida, both of which she identified as her principal residence. The HUD OIG said there was sufficient information to alert BofA and the underwriter that ...