Ginnie Mae has good reason to be concerned about rapid demographic change in its relatively small issuer community. Nonbank institutions – many of them relatively newly formed and based on nontraditional business models – are taking over the market. Nonbank issuers accounted for a whopping 69.4 percent of Ginnie’s issuance of single-family mortgage-backed securities during the first quarter of 2016. A year ago, their share was 64.6 percent. Two years ago it was 46.7 percent. With those kinds of gains on the production line, it’s not hard to see why nonbanks are claiming a growing share of Ginnie servicing outstanding. At the end of March, nonbanks owned 46.7 percent of Ginnie single-family mortgage servicing rights, up a hefty 11.5 percentage points in one year. That rate of growth can’t be accomplished just by producing new MBS because the servicing market simply doesn’t grow that fast. (Although the Ginnie market has grown significantly faster than any other segment of ... [ 2 charts ]

Investors in FHA’s distressed note sales program would be required to do more for homeowners to help them avoid foreclosure and keep their homes, thanks to improvements to FHA’s Distressed Asset Stabilization Program (DASP) announced this week by the agency. The changes appear aimed at consumer groups’ criticism of the Department of Housing and Urban Development for allowing profit-oriented investors to purchase the troubled HUD assets at a discount and flip the homes for a profit without ever helping the distressed homeowner. Although the transactions make good economic sense for investors and the government, struggling homeowners end up losing their homes without having tried any loan modification option that could have helped them avoid foreclosure. HUD launched the DASP in 2010 under pressure from Congress to help stabilize the FHA’s Mutual Mortgage Insurance Fund, which ...

FHA condominium lending fell in the first quarter to $1.6 billion, down 8.6 percent from the prior quarter. The volume decline was the second in a row for the sector, when production fell 20.3 percent from the third to the fourth quarter last year. On the other hand, year-over-year volume saw a whopping 35.3 percent increase. The top 10 FHA condo lenders were dominated by nonbanks, with Quicken Loans leading the field. The only bank among the top 10 was Wells Fargo, which landed in third place with $45.3 million despite a 35.7 percent drop in condo loan originations in the first quarter. Leader Quicken Loans closed the quarter with $73.6 million, while second-ranked Freedom Mortgage Corp. clocked in with $55.6 million. Fourth-place LoanDepot originated $33.7 million in FHA condo loans, while Broker Solutions rounded out the top five category with $31.1 million. In November last year, FHA announced ... [ 1 chart ]

The FHA’s 203(k) Property Repair and Rehabilitation program could use some jolt as inflexible agency guidelines, construction inexperience and closing delays continue to constrain loan growth. Origination of FHA-insured fixer-upper loans fell 10.9 percent in the first quarter of 2016 to $762.7 million from $856.2 million in the previous quarter. It was a different story year-over-year, however, as volume during the first three months rose 20.8 percent compared to volume during the same period last year. The top five FHA 203(k) lenders struggled as their combined loan production dropped 9.4 percent quarter-over-quarter and by 3.0 percent on a year-to-year basis. Their combined originations accounted for $157.5 million of total FHA 203(k) loan production for the first quarter. Purchase loans accounted for $131.0 million of rehab loans originated during the period while refinance loans totaled a ... [ 1 chart ]

A new 1 percent home loan product has quietly hit the market to help qualified, cash-strapped borrowers overcome one of the biggest obstacles to homeownership: downpayment. With significant variation in details, the 1 percent down mortgages offered by Quicken Loans and Guaranteed Rate stem from their partnerships with Freddie Mac and are structured as part of Freddie’s Home Possible Advantage program. In Quicken’s version, the borrower pays...

Streamlined mortgage refinancing with FHA and VA guarantees continued its strong growth in the first quarter of 2016, thanks mainly to low interest rates and program features, according to an analysis of agency quarterly and monthly reports. Agency-backed streamlined refinancing refers to the refinance of an existing FHA or VA loan requiring limited borrower credit documentation and underwriting and no appraisal. Streamlining applies only to the amount of documentation and underwriting the lender must perform and not to the costs in the transaction. VA IRRRL (interest rate reduction refinance loans) production rose...

FHA single-family forward endorsements fell by 8.0 percent in the first quarter of 2016 from the prior quarter, suggesting a continued slowing in endorsement in the latter part of 2015 and early 2016 compared to earlier quarters, according to the FHA’s latest quarterly report to Congress on the state of the Mutual Mortgage Insurance Fund. Overall though, the FHA MMIF report as well as FHA monthly production reports for March and April continued to show the very positive trends – rising volume, lower delinquencies and outstanding credit quality – that have been occurring in the FHA program since 2009. Endorsement volume for purchase and refinance loans was down to $53.5 billion during the first three months of 2016 from $58.1 billion in the fourth quarter of 2015, the MMI Fund report showed. Last year, forward endorsements soared in the second quarter and reached a record high in the ...

Ginnie Mae securitization of rural home loans got off to a wobbly start in the first quarter of 2016 as securitization volume fell 13.8 percent from the prior quarter, according to an Inside FHA/VA Lending analysis of Ginnie data. Approximately $3.9 billion in loans with a USDA guarantee were securitized during the first three months, with the top five issuers accounting for $2.1 billion of mortgage-backed securities produced by the segment during the period. USDA securitization volume dropped 9.2 percent year over year. Top USDA issuer Chase Home Finance accounted for $1.2 billion of securitized rural housing loans, while PennyMac, in distant second place, finished the quarter with $378.5 million. Wells Fargo ($294.0 million), Pacific Union Financial ($122.8 million) and Amerihome Mortgage ($102.2 million), in sequential order, comprised the rest of the top five issuers. Pacific Union climbed over ...

A new California law requiring condominium homeowner associations to disclose to their members whether the VA or the FHA has certified their buildings will soon take effect.Starting July 1, 2016, California HOAs will have to disclose in their annual budget report whether or not their condominium projects have been approved for VA or FHA financing. Gov. Jerry Brown, D, signed Assembly Bill 596 into law in August last year to encourage more veterans and first-time homebuyers to purchase condominiums and take advantage of the benefits of government-backed home financing. In signing the measure into law, Brown expressed hopes that condominium HOAs will step up their certification or recertification process. Assemblyman Tom Daly, D-Anaheim, author of the bill, estimates there are 28,000 condo projects in the Golden State, and only a third are FHA-certified. There are far fewer projects that are ...

The California Association of Realtors renewed its push for rules addressing the proliferation of FHA-insured mortgages that have Property Assessed Clean Energy super liens. In a recent letter to Office of Management and Budget Director Shaun Donovan, the CAR requested that both FHA and the Department of Housing and Urban Development adopt policy that is consistent with the Federal Housing Finance Agency’s existing policy on PACE liens. Specifically, such a policy would prohibit the use of PACE encumbrances with a “super lien” priority over mortgage financing. The group also urged HUD to issue guidelines directing FHA lenders and servicers not to place PACE liens above any mortgage insured by FHA. The CAR expressed concern about how PACE liens might affect the FHA Mutual Mortgage Insurance Fund, which is currently recovering from years of losses. “If the ..