FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...

Increased securitization of purchase-money mortgages provided the lift for a pickup in the production of new single-family MBS by Fannie Mae, Freddie Mac and Ginnie Mae in May, according to a new market analysis and ranking by Inside MBS & ABS. The three agencies produced a total of $114.71 billion of new single-family MBS last month, a 5.3 percent increase from April’s volume. May was the third straight month of increased production and it just barely exceeded the $113.56 billion issued during the same period a year ago. For the first five months of 2016, production was down 2.8 percent from last year. Purchase mortgages accounted...[Includes two data tables]

FHA originations rose significantly in the first quarter of 2016 from the same period last year even as VA loan production decreased slightly, according to an analysis of Ginnie Mae data. Lenders delivered $54.4 billion of FHA-insured loans to Ginnie Mae for securitization during the first three months, up 36.2 percent from the previous year. In contrast, the volume of VA loans securitized over the same period, $35.0 billion, fell 1.5 percent compared to the same period a year ago. A strong purchase-mortgage market drove FHA activity from January to March. The reduction in FHA’s annual insurance premium in January 2015 continued to have an impact on FHA’s purchase-loan market share. In 2015, FHA purchase originations accounted for $151.0 billion of the estimated $881.0 billion in total purchase originations (conventional and government single-family forward originations), according to ... [ 2 charts ]

Eleven lenders paid a total of $152.1 million in civil penalties and settlements while three others lost their FHA approval for various violations of FHA requirements, according to the Mortgagee Review Board’s latest report on administrative actions taken against FHA-approved lenders. As required by the Department of Housing and Urban Development, the report summarizes the disciplinary actions imposed by the board on FHA lenders from Oct. 1, 2014, to Sept. 30, 2015. These actions include $151.7 million in settlements and $370,119 in civil money penalties, withdrawals of FHA approval, suspensions, probations and reprimands. Allied First Bank of Oswego, IL, agreed to pay a $17,000 civil money penalty for improper use of FHA’s name in certain correspondence and for failure to notify HUD of a consent order entered into by the bank and federal and state banking regulators. The MRB voted to ...

A California-based mortgage lender and six senior executives have agreed to pay $12.7 million to the Securities and Exchange Commission to resolve allegations they schemed to defraud investors in the sale of residential mortgage-backed securities with a Ginnie Mae guarantee. The SEC complaint alleged that, from March 2011 to March 2015, Ginnie Mae issuer First Mortgage Corp. and its top executives pulled current performing loans out of Ginnie Mae MBS. The issuer falsely claimed that the loans were delinquent so that it could recycle them as newly issued MBS and sell them at a profit. FMC allegedly issued Ginnie Mae MBS prospectuses with false and misleading information by using a Ginnie Mae rule that allowed issuers to repurchase seriously delinquent loans. In addition, the SEC complaint alleged that FMC deliberately delayed depositing checks from borrowers who had been behind on ...

Refinance lending gained strength in the first quarter of 2016 and surpassed origination of purchase-money mortgages, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders originated an estimated $195 billion of refinance loans in the first three months of this year, an 11.4 percent increase over the fourth quarter. With purchase-mortgage production slumping by 11.9 percent to $185 billion, the refi market accounted for 51.3 percent of total originations for the first quarter. Although purchase-mortgage lending is expected to pick up considerably in the second and third quarters, the refi market isn’t...[Includes three data tables]

Activity in the Home Affordable Refinance Program continued to dwindle in the first quarter of 2016 as the post-housing crisis initiative winds down before expiring at the end of the year. HARP refinances fell to just 19,989 in the first quarter, down 5.2 percent from the previous period and off 36.8 percent from a year ago, according to a new Federal Housing Finance Agency report. While both government-sponsored enterprises saw a decline in volume, Freddie Mac volume was...[Includes one data table]

FHA activity was lackluster in the first three months of 2016 as loan originations fell 7.8 percent from the prior quarter, according to Inside FHA/VA Lending’s analysis of agency data. The weak first-quarter production of $53.5 billion appeared to continue a trend from 2015, which saw the fourth quarter close with $58.1 billion, down significantly from $73.7 billion in the third quarter. In contrast, FHA originations fared better year-over year. Loan production was up 35.6 percent in the first quarter compared to the same period last year. Purchase lending totaled $36.5 billion in the first three months with overall production trending downward during the period. Borrowers in the 640-679 and 680-719 credit score ranges made up the bulk of new endorsements for January and February, the latest FHA data show. It is unlikely that trend will change even if March endorsements were added. Between all ... [ 2 charts ]

The rapid deconsolidation in the Ginnie Mae issuer community and shift to nonbanks helped expand access for borrowers, but it’s also given the agency new issues to consider, officials said. Back in 2010-11, three Ginnie issuers dominated the program, noted Ginnie Mae President Ted Tozer during the Mortgage Bankers Association secondary-market conference in New York this week. But those three firms now account for just 14 percent of the agency’s business, and nonbanks held a combined 70 percent of the market, he said. Many new firms became issuers in part so they could get away from the credit overlays imposed by the national aggregators, Tozer said. The result is that the average score on a Ginnie loan is now 60 points lower than on loans securitized by Fannie Mae and Freddie Mac, he added. Michael Drayne, senior vice president in Ginnie’s office of issuer & portfolio management, said the ...

Recent circuit court rulings may bolster FHA lenders’ defense against the government’s heavy use of the False Claims Act in FHA lending cases, according to industry attorneys. In the years following the financial crisis, the Department of Justice and the relators bar have used the FCA aggressively to target banks and nonbank mortgage lenders for losses incurred by FHA due to poor underwriting and false certifications. The DOJ and the Department of Housing and Urban Development have recovered billions of dollars through settlements with various mortgage lenders and servicers, using increasingly creative theories of liability to hold them responsible for FHA losses. This week, the DOJ filed a lawsuit in federal court in Washington, DC, accusing Guild Mortgage of improper origination and underwriting of FHA-insured mortgage loans from January 2006 through December 2011. As in ...