One of the goals in the recent revisions to the Home Affordable Refinance Program is to stimulate more interest among lenders, largely through relaxed requirements on representations and warranties and some streamlining of the process. But HARP 2.0 also includes new guidelines on soliciting potential customers, both from the lender’s own portfolio and from borrowers currently serviced by another firm. A handful of lenders have begun touting the expanded program to consumers. The new program includes specific refi solicitation practices that lenders must...

Although primary market lenders will face fewer hurdles in originating refinance loans for underwater Fannie Mae and Freddie Mac borrowers, detailed guidelines released by the government-sponsored enterprises this week confirm that it will take several months before the expanded programs are fully implemented. And when they are, the revamped Home Affordable Refinance Program will generate up to one million new loans that otherwise wouldn’t have happened, according to estimates by Keefe, Bruyette & Woods. That’s just about what the market expected, and it will mean... (Includes one data chart)

The FHA Mutual Mortgage Insurance Fund for single-family loans again fell short of minimum capital standards, spurring renewed warnings of a taxpayer bailout if losses continue to mount. According to FHA’s annual report to Congress on its financial status and the condition of the MMI Fund, reserves dropped to 0.24 percent in 2011 from 0.50 percent last year. This means that the agency is holding only $2.6 billion of excess reserves, down from $4.7 billion the year before, against roughly $1.1 trillion of FHA-insured loans. The report also noted that unless housing prices stabilize and losses drop, the fund has a 50 percent chance of a taxpayer bailout. The negative effects in the report’s “base case” scenario were caused by ...

The fallout from Taylor, Bean & Whitaker’s collapse in 2009 continues to haunt Ginnie Mae after a recent independent auditor’s report found a potential overstatement of the agency’s portfolio of mortgages-held-for-investment (MHFI) apparently linked to the TBW debacle.The report by Clifton Gunderson, a Fairfax, VA-based certified public accounting firm, attributes the apparent portfolio anomaly to the current document custodian’s failure to complete a review and provide a final certification on the non-performing TBW loans. Ginnie Mae repurchased the loans from the defaulted TBW mortgage-backed securities pools and reclassified them as MHFIs. Overall, independent auditors signed off on Ginnie Mae’s FY 2011 balance sheet and found no material weaknesses in internal control over financial reporting or any instance of noncompliance. Auditors, however, noted ...

The Department of Housing and Urban Development will integrate risk management efforts as soon as the agency’s new Office of Risk Management (ORM) is up and running, according to a new report from the Government Accountability Office. Although the report provides no timeline, it said that HUD has indicated a willingness to adopt changes the GAO recommended to speed up the implementation of an overall risk management strategy. The FHA needs to reassure Congress that it has the proper controls in place to minimize financial risks arising from increased reliance on FHA mortgage insurance, the GAO said. Lawmakers are concerned that ...

Home Equity Conversion Mortgage claims increased by a whopping 48.3 percent in FY 2011 from last year, while the number of loans originated under the program also fell on a year-over-year basis, according to Inside FHA Lending’s analysis of FHA data. HECM claims were up to 7,951 in 2011 compared to 5,361 claims filed under the program the year before.

Home Equity Conversion Mortgage lenders may now use certain financial assessment criteria in qualifying consumers for a HECM loan prior to FHA’s publication of its own guidance. Officials from the Department of Housing and Urban Development broke the news during the recent National Reverse Mortgage Lenders Association annual conference in Boston. They said the new underwriting assessment tool would help ensure borrowers can pay required taxes and insurance on their homes. The notification followed the unveiling of the NRMLA’s recommended underwriting guidance. In a previous email notice to industry participants, Acting Assistant Secretary of Housing/FHA Commissioner Carol Galante indicated that ...

President Obama has announced Carol Galante as his pick for Assistant Secretary for Housing and FHA Commissioner at the Department of Housing and Urban Development. Galante has occupied the two posts in an acting capacity since July 12, when she replaced Robert Ryan. Ryan temporarily assumed both jobs after former HUD Assistant Secretary for Housing and FHA Commissioner David Stevens left HUD at the end of March 2011 to join the Mortgage Bankers Association as its new president and CEO. Prior to her current post, Galante served as HUD deputy assistant secretary for multifamily programs. In addition, Galante, a licensed real estate broker, has been a leader of major administration initiatives, including ...

Endorsements of Home Equity Conversion Mortgage loans during the first six months of 2011 rose 0.4 percent above the rate of endorsements from a year earlier but fell 20.2 percent on a quarterly basis, according to Inside FHA Lending’s analysis of HECM activity during the first six months of 2011. At the mid-year mark, HECM endorsements totaled $9.5 billion, with third-party originators sponsored by FHA-approved lenders accounting for 40.4 percent of all HECM originations. Non-FHA-approved mortgage brokers are no longer allowed to originate HECMs under a policy change last year aimed at reducing FHA losses and risks to the FHA Mutual Mortgage Insurance Fund. HECM endorsements totaled ... [includes two (2) data charts]

The improvements that the Federal Housing Finance Agency is expected to make to the government’s Home Affordable Refinance Program will likely come at the expense of MBS investors, say experts. The outlines of an expanded HARP are far from clear, but the FHFA is said to be giving serious consideration to lifting the 125 percent loan-to-value limit, in addition to waiving loan-level pricing adjustments, representation and warranties imposed on lenders, valuation requirements and the portability of mortgage insurance. The agency, which oversees Fannie Mae and Freddie Mac, is expected to make an...