The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...

Wells Fargo and the Department of Justice are reportedly at an impasse in their settlement talks in connection with a lawsuit accusing the bank of improper underwriting and false certification of certain FHA-insured loans. In an e-mailed statement to Inside FHA Lending, a bank spokesperson said Wells Fargo’s good faith effort to work with the federal government to resolve the complaint “has not yet resulted in a settlement.” Nonetheless, the bank “will move forward with presenting [its] case in support of [its] prudent and responsible FHA lending practices, which have produced high-quality FHA loans with delinquency rates that are half the industry average,” the spokesperson added. This week, citing an unidentified source, Bloomberg reported that lawyers for the government and the bank have told the presiding judge in the case that they ...

The number of underwater borrowers seeking to refinance their conventional mortgages into an FHA loan fell in fiscal 2014 from the previous year, according to an Inside FHA Lending analysis of agency data. The number of endorsements under the FHA Short Refinance program totaled 1,327 at the end of fiscal 2014, down from a record 1,662 in the prior year. Endorsements hit their peak in fiscal 2013.A total of 5,140 distressed conventional loans with a combined original mortgage amount of $784.9 million were refinanced under the program over the five-year period. In order to participate, borrowers must be current on their mortgage payments, have a credit score of 500 or greater and owe at least 15 percent more on the property than their home is actually worth. Lender participation is strictly voluntary. More importantly, the lender or investor must be ...

Essent EVP to Retire in March. Adolfo Marzol, Essent Guaranty’s executive vice president, will step down, effective March 31, 2015, after five years with the company. VA Hybrid Adjustable-Rate Mortgage Pooling Eligibility. The Department of Veterans Affairs recently expanded the type of loans it will guarantee to include 7/1 and 10/1 hybrid ARMs. While Ginnie Mae’s Mortgage-Backed Securities Guide does not bar the inclusion of hybrid ARMs in Ginnie MBS, GinnieNET is not currently able to process these loans for pool processing. GinnieNET is being updated in order to accommodate VA 7/1 and 10/1 hybrid ARM pooling. Effective with issuances dated on or after Dec. 1, 2014, VA 7/1 and 10/1 hybrid ARMs will be eligible for pooling. CFPB Publishes Revised List of Rural and Underserved Counties. The Consumer Financial Protection Bureau has published its 2015 list of ...

Mortgage originations increased in all the major product categories during the third quarter of 2014, although new adjustable-rate mortgage lending was down slightly. A new Inside Mortgage Finance analysis shows that conventional-conforming originations increased by 11.7 percent from the second quarter to the third. That was slightly faster than the 10.2 percent increase in jumbo production and the 10.1 percent rise in government-insured lending. The home-equity market showed...[Includes two data charts]

Private mortgage insurers reported hefty increases in the volume of new insurance written during the third quarter of 2014, according to a new Inside Mortgage Finance ranking and analysis. The seven active private MIs wrote primary insurance coverage on $53.95 billion of new mortgage originations during the third quarter, a gain of 22.8 percent from the previous period. On a year-to-date basis, total new primary insurance by the MIs was still down 22.4 percent from the first nine months of last year, mostly because activity in the Home Affordable Refinance Program has declined sharply. HARP accounted...[Includes three data charts]

The Department of Housing and Urban Development will not take on the new points-and-fees cure provision for qualified mortgages adopted by the Consumer Financial Protection Bureau. The agency is concerned that lenders might inadvertently violate the FHA’s statutory 3.5 percent downpayment requirement. HUD adopted other changes in the CFPB’s revised final rule on ability to repay and qualified mortgages (ATR/QM) to maintain consistency but saw no need for any further ability to cure points-and-fees errors. Reimbursement of any excess points and fees to the borrower could take away from the mandatory 3.5 percent downpayment and render the loan ineligible for FHA insurance, the agency explained in a notice published in the Nov. 3 Federal Register. HUD said it would provide lender guidance under its own QM rule on ...

Ginnie Mae servicing bumped up slightly in the third quarter after an uneventful prior quarter as FHA purchase activity continued to drag, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose quarter over quarter by 1.4 percent. On an annual basis, volume increased 4.6 percent from the same period a year ago. Ginnie Mae servicers ended the quarter with a total of $1.48 trillion in unpaid principal balance, up from $1.46 trillion in the previous quarter. The top three servicers saw volume drop on both quarterly and year-over-year bases. Wells Fargo remained as top servicer of Ginnie Mae mortgage-backed securities, closing out the quarter with $422.4 million, down 0.8 percent from the previous quarter and down 0.6 percent from the prior year. The mega-servicer dominated the Ginnie market with a 28.6 percent market share. JPMorgan Chase carved out a 10.1 percent market share with ... [1 chart]

The real estate industry is urging the FHA to tighten up its pre-foreclosure sale process and be more vigilant before referring loans to the single-fThe real estate industry is urging the FHA to tighten up its pre-foreclosure sale process and be more amily loan sales program (SFLS). Commenting on the proposed section on servicing of the FHA Single Family Policy handbook, the National Association of Realtors expressed concern that the FHA is auctioning large pools of mortgages without considering the investor’s ability to achieve neighborhood stabilization goals such as homeownership preservation and affordable housing. The first step for FHA to improve servicing and pre-foreclosure efforts is to ensure mortgage servicers’ full compliance with FHA loss-mitigation requirements before referring loans to the SFLS, the NAR suggested. In addition, the FHA should ...

FHA single-family mortgage originations fell slightly in August from July as the agency’s home-purchase volume continued to falter, agency data showed. In August, the latest month for which FHA origination data are available, forward-loan originations totaled $12.6 billion, down 3.2 percent from the prior month and down 25.1 percent from the same period last year. Purchase mortgages made up 81.1 percent of all FHA-insured single-family loans originated during August, while refinances accounted for the remainder. Fixed-rate mortgages were the product of choice, as they have been in previous periods. Quicken Loans relied more on refis than on purchase lending (38 percent of new loans) as it closed the month with $534.8 million in new production, down 8.5 percent from July. Nonetheless, it was good enough for a 4.2 percent FHA market share. Second-place Wells Fargo’s total production for the month was ... [1 chart]