FHA servicers held approximately 7.5 million loans as of April 30, with the top 50 servicers accounting for 97.2 percent, an Inside FHA Lending analysis of agency data showed. Wells Fargo and Bank of America together held an estimated 4.0 million loans for a whopping 54.3 percent of the market. An estimated 2.0 percent of FHA loans serviced by Wells were delinquent, while BofA reported 19.2 percent of its FHA portfolio delinquent. Wells had a foreclosure rate of 2.17 percent while BofA had a 2.51 percent rate. JPMorgan Chase had 658,966 FHA loans, 18.8 percent in various stages of delinquency, and a market share of ... [1 Chart]

A proposal to replace the FHA’s current Tier Ranking System with a Servicer Performance Scorecard as a basis for determining servicer incentive payment is expected to be published in the Federal Register by the end of this month. In the previous issue of Inside FHA Lending (Volume 5, Issue 11, May 25), it was reported that a coalition of industry groups asked the FHA to adopt a private transfer fee rule in harmony with the final rule recently adopted by the Federal Housing Finance Agency. In a recent seller/servicer bulletin, Freddie Mac announced that, effective July 16, it will not purchase mortgages that are ...

Despite the sharp increase in production under the Home Affordable Refinance Program, the overwhelming majority of refinance mortgages financed by Fannie Mae and Freddie Mac are well below current property values with substantial borrower equity. According to official data released late last week by the Federal Housing Finance Agency, HARP production jumped a whopping 93.4 percent in the first quarter of 2012, hitting a record 180,185 loans. HARP volume at Freddie was up more than double from the fourth quarter, while Fannie production jumped 79.8 percent. The first...(Includes three data charts)

It’s far too early for lawmakers to entertain another expansion of the Home Affordable Refinance Program given that the most recent tweak to the program, HARP 2.0, only just recently became fully active, according to the Federal Housing Finance Agency. The FHFA has maintained that HARP 2.0 remains a work in progress given the revamped program’s graduated rollout of changes, but this week the Finance Agency said a proposed bill in the Senate to create HARP 3.0 would only get in the way. “The initial results on the enhanced HARP program show that it is working, and new legislation at this time would slow down that progress,” said FHFA Senior Associate Director for Housing and Regulatory Policy Meg Burns.

Bucking an overall slowdown in new mortgage originations during the first quarter of 2012, government-insured lending surged to its highest level since the end of 2010, according to a new ranking and analysis by Inside Mortgage Finance. A total of $83.0 billion of loans insured by the FHA, Veterans Administration and Rural Housing Service were originated during the first three months of the year, up 15.3 percent from the fourth quarter of 2011. That was in marked contrast to the 8.2 percent drop in conventional conforming originations and an overall 3.8 percent decline in total mortgage production during...

Although at least one Senate Republican shows interest in a plan to expand the Home Affordable Refinance Program, the outlook for Congressional action remains doubtful and House Democrats are pushing the Federal Housing Finance Agency to make further HARP changes administratively. During a Senate Banking, Housing and Urban Affairs Committee hearing last week on legislation to expand HARP, Sen. Bob Corker, R-TN, said he was open to the proposal. “I hope that we’ll have a real mark-up on this bill,” he said. Senate Democrats Robert Menendez (NJ) and Barbara Boxer (CA) have introduced legislation...

The Department of Housing and Urban Development has expressed concern over the “lack of alignment” between FHA’s credit underwriting standards and credit overlays – a probable explanation for the apparent increase in FHA lending to non-traditional FHA borrowers. Responding to an Inside FHA Lending inquiry, FHA Deputy Assistant Secretary Charles Coulter said HUD will look at lenders’ compare ratio as a potential driver for overlays and will work to improve clarity in FHA manual underwriting. In recent remarks at the Mortgage Bankers Association’s National Secondary Market Conference in New York, Coulter said ...

Real estate industry groups are urging the FHA to align a forthcoming proposed rule for private transfer fees with a final rule recently adopted by the Federal Housing Finance Agency. In a joint letter to Acting FHA Commissioner Carol Galante, the National Association of Realtors and the Institute of Real Estate Management expressed support for the FHFA rule on transfer-fee covenants and asked that a mortgagee’s compliance with the FHFA rule be deemed as compliance with the FHA’s own rule regarding such covenants. The two groups urged the FHA to ...

FHA-approved reverse mortgage lenders conducting any new financial assessments of elderly borrowers should not be overly restrictive to ensure that the Home Equity Conversion Mortgage program remains a viable option for cash-poor seniors, according to the National Council on Aging. The NCA, an advocacy group for elderly Americans, noted that lender assessments of borrowers’ ability to repay a HECM loan may be tough seniors with modest income who could not qualify for a conventional home loan would be left with fewer alternatives to tap home equity. The FHA does not have specific income requirements for HECM borrowers. However, policymakers are ...

The Department of Housing and Urban Development has paid a total of $962,600 in incentive payments to servicers that used special forbearance for unemployed homeowners since changes to FHA forbearance rules were announced in July last year. The payments covered 6,116 claims filed with HUD under the FHA’s revised special forbearance program from July 2011 through March 2012. The program helps unemployed FHA borrowers stay in their homes while seeking reemployment. Changes to the program require servicers to extend the forbearance period for qualified FHA borrowers from the minimum four months to 12 months. In addition, upfront hurdles were ...