The Department of Housing and Urban Development has outlined steps FHA lenders must take following the successful deployment of a new system for requesting changes and notifications as well as completing their annual recertification.The changes became effective on May 27, 2014, as the new system, Lender Electronic Assessment Portal (LEAP), went live. All of FHA’s approximately 2,500 approved lenders will now use LEAP for their annual recertification and business updates and changes. Senior HUD officials, who requested anonymity, said the transition from the Lender Assessment Subsystem (LASS) and the Institution Master File (IMF) to LEAP is almost complete, except for a few kinks HUD staff is working out. “The change in the IMF is noteworthy because it was the repository for information about all FHA lenders and it had been operating on outdated technology for a long time,” said one agency executive. “All essential information about all FHA lenders is now consolidated in a ...

HUD Nominee Picks Up Support from Grassroot Activists, Home Builders. San Antonio Mayor Julian Castro, President Obama’s pick to replace Secretary Shaun Donovan at the Department of Housing and Urban Development, has won support from the National Community Reinvestment Coalition and the Center for Responsible Lending and the National Association of Home Builders. “Mayor Castro’s experience and strong commitment to neighborhood revitalization and community development will be critical to the recovery of communities still reeling from the housing crisis,” said NCRC President and CEO John Taylor. “We welcome his leadership and look forward to working in partnership with him to increase access to affordable housing and create vibrant, healthy communities.” CRL President Mike Calhoun noted Castro’s long record of ...

New originations of both refinance loans and purchase mortgages fell sharply from the fourth quarter, with the biggest slump in the refi market, according to a new Inside Mortgage Finance ranking and analysis. An estimated $104 billion of refinance loans were originated in the first quarter, down 45.6 percent from the end of 2013. Compared to a year ago, refi production was down 76.2 percent. Refinance originations hit a cyclical high at the end of 2012 and early 2013, averaging nearly $440 billion per quarter, and it’s been going down steadily since then. With interest rates dropping in recent weeks, some mortgage observers say...[Includes one data chart]

It’s a buyer’s market for mortgage firms these days, and former Cole Taylor Mortgage Chief Executive Willie Newman couldn’t be in a better place: He’s teamed up with Stone Point Capital, a hedge fund that has committed several hundred million dollars to the purchase of residential lenders. “We have a lot of plans,” Newman told Inside Mortgage Finance. “We plan to be in originations, servicing, capital markets and multi-channel production.” It was...

Mortgage industry stakeholders are wary of a new FHA proposal to offer mortgage insurance premium reductions to borrowers who agree to complete housing counseling before and after they obtain an FHA-insured mortgage loan. The FHA is seeking comment on a proposed four-year, two-phase housing counseling pilot, “HAWK for New Homebuyers.” HAWK is an acronym for Homeowners Armed With Knowledge, and includes several initiatives aimed at broadening the use of counseling in FHA origination and servicing. HAWK is a component of the “Blueprint for Access,” which FHA announced on May 13 as part of the agency’s efforts to expand access to credit for underserved borrowers. The HAWK pilot would provide FHA pricing incentives to first-time homebuyers who participate in ...

Total FHA originations dropped significantly in the first quarter of 2014 as borrower access to credit remained a big problem for the agency, according to Inside FHA Lending’s analysis of agency data. FHA lenders ended the first quarter with a combined $28.3 billion in new originations, down 21.0 percent from the fourth quarter of 2013. Production also fell a whopping 55.6 percent from the same period a year ago. Purchase transactions comprised the bulk of new FHA loans but, so far, the much-anticipated boom in new purchase lending has yet to materialize. The high cost of FHA loans, due mainly to higher mortgage insurance premiums and a requirement to maintain mortgage insurance for the life of the loan, has made it difficult for borrowers to obtain an FHA-insured loan. Lender overlays also have restricted access to FHA credit. The FHA has raised premiums five times since 2009 to ... [1 chart]

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 ...

The FHA has proposed to bring its adjustable-rate mortgage (ARM) rules in line with those of the Consumer Financial Protection Bureau to enable FHA lenders to comply with the new servicing requirements under the Truth in Lending Act. Specifically, two proposed changes would align both agencies’ interest-rate adjustment and disclosure-notification regulations for ARM borrowers as required by the revised TILA. The CFPB issued its final TILA servicing rule in February 2013 but delayed the effective date for another year to allow the Department of Housing and Urban Development sufficient time to write rules for new notification requirements for FHA-insured ARMs with a 30-day look-back period. Hence, FHA ARMs must comply with the new TILA rule on or after Jan. 10, 2015. The FHA insures 1-, 3-, 5-, 7- or 10-year ARMs. The CFPB’s revised look-back period and notification requirements would ...

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 ...

During the first quarter of 2014, private mortgage insurance companies may have seen a somewhat bigger decline in new business than their government competitors, but the industry recorded arare achievement in terms of profitability, according to a new Inside Mortgage Finance analysis. For the first time since early 2007, all four of the private MIs that survived the mortgage apocalypse reported a profitable quarter. Mortgage Guaranty Insurance Corp., Radian, United Guaranty and Genworth all finished in the black, with a combined $296 million in income on their domestic MI activities. Different combinations of these four had reported profitable quarters at various times, and the industry as a whole has been profitable since the second quarter of last year. Including Essent Guaranty and National MI, the industry earned...[Includes three data charts]