Financial industry trade groups want all Title II forward mortgage loans that meet FHA requirements to be treated as “safe harbor” qualified mortgage loans instead of being lumped in either of two QM buckets as proposed by the Department of Housing and Urban Development. Commenting on HUD’s proposed definition of a “qualified mortgage,” the industry groups – Mortgage Bankers Association, Consumer Bankers Association, Consumer Mortgage Coalition, American Bankers Association, and the Independent Community Bankers of America – urged HUD to ...

Establishing a higher, mandatory capital reserve requirement for the FHA under the Protecting American Taxpayers and Homeowners Act, or PATH Act, would help reduce discretionary spending over 10 years, according to the Congressional Budget Office. According to CBO estimates, implementing the legislation would result in a net decrease in discretionary spending of $41.2 billion over the 2014-2023 period. This assumes future appropriations laws are enacted to implement the act’s provisions. The potential reduction in government spending would stem from ...

FHA jumbo loan originations continued their quarterly fluctuations as production in the second quarter of 2013 slipped after a good run in the previous quarter, according to Inside FHA Lending’s analysis of FHA data. Volume fell 1.5 percent from the first quarter, during which the FHA posted $5.36 billion in jumbo mortgage originations. The first quarter number broke a declining production trend that began in the second quarter of last year when FHA reported $6.27 billion in jumbo lending. FHA lenders produced a total of $10.8 billion in new jumbo loans in the first half of 2013, down 2.7 percent from ... [2 charts]

FY 2013 Actuarial Report to Congress on the State of the MMIF Delayed. Release of the FY 2013 actuarial audit of the FHA Mutual Mortgage Insurance Fund will be delayed because of the recent government shutdown, according to a government source. No other details were provided. The FHA recently notified Congress that it would seek a mandatory appropriation of approximately $1.7 billion to bolster its capital reserves for expected future losses. FHA officials said the draw does not suggest anything dire but is simply a matter of ...

Early indicators suggest that private mortgage insurers saw an uptick in new business during the third quarter, a time when most mortgage production indicators were losing momentum. Fannie Mae and Freddie Mac securitized a total of $58.18 billion of single-family loans that were insured by private MIs during the third quarter, according to a new Inside Mortgage Finance analysis of loan-level detail. That was up 3.7 percent from the second quarter at a time when total production by the two government-sponsored enterprises declined by 15.6 percent. Private MI-insured loans accounted...[Includes two data charts]

SunTrust Banks has agreed in principle with the Department of Housing and Urban Development and the Department of Justice to settle certain FHA-related claims. Separately, a federal judge in Texas refused to dismiss a government suit against two FHA lenders accused of manipulating HUD into insuring poorly underwritten loans which later resulted in massive losses to the agency. Announced on Oct. 10, SunTrust’s agreement with the government agencies is part of a broader resolution of certain legacy matters and repurchase agreements with Fannie Mae and Freddie Mac. SunTrust has agreed to settle certain ...

The Department of Housing and Urban Development’s proposed “qualified mortgage” rule attaches certain conditions to QM treatment that may complicate matters for participating lenders, said attorneys with K&L Gates in Washington, DC. On Sept. 30, the Department of Housing and Urban Development published its own proposed QM rule for FHA loans. The CFPB rule takes effect on Jan. 14, 2014, and will apply to FHA loans until HUD issues a final rule. Under the CFPB rule, many FHA loans would not qualify for the rule’s safe harbor because the higher mortgage insurance premiums would make them “higher priced mortgage loans.” Thus, in order to ...

The U.S. Court of Appeals for the First Circuit has affirmed a district court’s dismissal of a putative class action alleging that a lender improperly required FHA borrowers to buy and maintain higher flood insurance coverage than that indicated in their mortgage contracts. According to an analysis by the Washington law firm BuckleySandler, the ruling from an equally divided en banc court allows mortgage lenders to require borrowers to maintain flood insurance equal to the replacement value of their homes. In Kolbe v. BAC Home Loans Servicing, LP, No. 11-2030, 2013 WL 5394192 (1st Cir. Sept. 27, 2013), plaintiff Stanley Kolbe contends ...

FHA loan originations declined by 10.5 percent in August from July, following a downward trend that seems to suggest that private mortgage insurance companies are gaining the upper hand against their biggest government-backed competitor. Volume dropped to $16.8 billion in August from $18.8 billion in July, and from $22.1 billion a year ago, according to Inside FHA Lending’s analysis of FHA data. Purchase-mortgage originations comprised 68.7 percent of FHA business for the month as rising interest rates slowed refinancing activity. Despite the increase in purchase lending, FHA lenders noted it was ... [1 chart]

The MGIC Investment Corp. reported its second straight profitable quarter in 2013 and another increase in new insurance written. While the numbers may not yet indicate a trend, it certainly appears that the Milwaukee-based mortgage insurer is slowly but consistently showing improvement in its performance since posting a net loss of $246.9 million for the same quarter a year ago. MGIC reported net income of $12.1 million in the third quarter and $12.4 million in the second quarter, compared with a net loss of ...