The mortgage banking industry is backing a proposal by the Department of Housing and Urban Development to reduce the loan-to-value ratio on FHA-insured mortgage loans over $625,500 from 96.5 percent to 95 percent. In effect, the proposal would raise the minimum downpayment on FHA-insured jumbo loans from 3.5 percent to 5 percent. According to the Mortgage Bankers Association, the proposal would help return FHA to its historical core mission of providing first-time, minority and low- and moderate-income homebuyers access to affordable mortgage credit. The proposal is also designed to encourage the return of ...

Streamline refinancing helped boost FHA origination volume as lenders reported substantial increases on monthly and year-over-year bases, according to Inside FHA Lending’s latest analysis of FHA data. Despite increases in mortgage insurance premium and other policy changes aimed at reducing FHA market share and strengthening the Mutual Mortgage Insurance Fund, FHA endorsements were up 18.7 percent in January 2013 from December 2012, and a hefty 38.7 percent from January last year. However, FHA refis accounted for 54.3 percent of total production while purchase mortgages made up ... [1 chart]

Ginnie Mae servicing volume was up modest 1.5 percent in the fourth quarter of 2012 and 9.1 percent higher from the previous year, with some eye-popping increases reported by several servicers. The top servicers of Ginnie Mae mortgage-backed securities reported $1.31 trillion in government-backed mortgage debt outstanding in the fourth quarter, up from $1.29 trillion from the previous quarter. Wells Fargo led the pack with $407.2 billion after posting gains on a quarterly and year-over-year basis while second-place Bank of America recorded a total of ... [1 chart]

Some underwriters in the private mortgage insurance space are rolling out new technology in their efforts to reacquire market share lost to the FHA even as market tidal forces continue to shift in favor of private MIs. Radian Guaranty, a subsidiary of Radian Group, has introduced its MI rate finder application, Radian Rates, for Android smart phone devices on Google Play. Designed as a mobile version of the company’s existing online rate finder, Radian Rates checks eligibility, compares options and automatically calculates the MI rate depending on the ...

Early on, one of the biggest problems with the Home Affordable Refinance Program was the inability of nonbank lenders to participate in the effort. Many were willing – but their warehouse lenders were nervous about putting high loan-to-value loans on their books, even for just a few weeks. But since last summer Fannie Mae, and to a lesser extent Freddie Mac, have made a concerted effort to allay the fears of warehouse financiers about the risk inherent in the loans. “Fannie Mae has basically been...[Includes one data chart]

An FHA risk-sharing proposal that almost got off the ground in the early 1990s has sparked lawmakers’ interest during a recent Senate hearing as one way to reduce FHA losses and taxpayer risk exposure while allowing private capital to reenter the market. Testifying before the Senate Committee on Banking, Housing and Urban Affairs on FHA reforms, Teresa Bryce Bazemore, president of Radian Guaranty, urged lawmakers to authorize the FHA to enter into risk-sharing arrangements with private mortgage insurers. Bazemore said the proposal is intended to prevent future FHA borrowers from ...

FHA mortgage delinquency rates trended lower in the fourth quarter of 2012 as did the foreclosure rate – signs that the housing market recovery may be on track finally. An Inside FHA Lending analysis of top FHA servicers’ portfolios showed a modest drop in the overall past-due rate in the fourth quarter to 16.87 percent from 17.45 percent in the previous quarter. This includes loans that are 30-60 days delinquent as well as 90-day + delinquent. As of Dec. 31, FHA servicers held a total of 7.65 million loans in their portfolios, of which 2.87 percent were in some stage of foreclosure, down from 3.07 percent in the third quarter. Of that total number of FHA loans, 7.39 percent were ... [chart]

The Department of Housing and Urban Development said it will share information soon on the estimated impact of mandatory, across-the-board spending cuts on HUD/FHA programs and their recipients. A HUD spokesman declined to put a sequestration tag on all affected programs, including FHA, saying details would be available as soon as the department notifies all HUD funding recipients of automatic spending cuts that went into effect last week. The mandatory cuts to defense and discretionary spending kicked in after Congress failed to enact a plan to reduce the deficit by $1.2 trillion over 10 years, as required by ...

The recent increase in mortgage insurance premium (MIP) and other policy changes to strengthen the FHA Mutual Mortgage Insurance Fund are causing borrowers with better credit to shift from FHA to conventional financing, according to a new Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The monthly survey of real estate agents found that FHA remains an option for borrowers who have limited cash resources and tainted credit. However, given their individual circumstances and FHA’s recent policy changes, many would take out a conventional loan if they could qualify. With a low 3.5 percent downpayment requirement, FHA appears to ...

Expressing its views and estimates for the Fiscal Year 2014 budget, the House Financial Services Committee remains concerned that the FHA has not fully exercised its powers to protect its mortgage insurance fund and urged the agency to begin charging additional user fees to strengthen its financial footing. Apparently, there is a hitch in that proposal. It seems the Department of Housing and Urban Development does not charge user fees and to do so would probably need clear authorization from Congress, said a HUD spokesman. It is not clear what the committee meant by ...