The Ginnie Mae servicing market continued to grow during the first three months of 2016, with most of the impetus coming from the VA home loan guaranty program. A new Inside FHA/VA Lending analysis of mortgage-backed securities data reveals that the amount of Ginnie servicing outstanding swelled to $1.544 trillion as of the end of March, a 1.65 percent gain from the previous quarter. Because issuer-servicers regularly repurchase seriously delinquent loans out of Ginnie MBS pools, the actual volume of government-insured loans outstanding was somewhat higher. The VA program saw the most growth, increasing by 3.25 percent in just three months, while FHA servicing in Ginnie MBS rose only 0.96 percent from December 2015. Servicing of rural housing loans guaranteed by the U.S. Department of Agriculture was up 1.34 percent, while the FHA insurance program for Native Americans ... {4 charts]

Borrowers saddled with student loan debt now have a better chance of qualifying for an FHA mortgage, thanks to a recent change in the way lenders factor such payments in the calculation of a borrower’s debt-to-income ratio. Under newly revised guidance announced by the FHA recently, lenders may apply the same calculation criteria used in the mortgage industry regardless of the type of student loan-payment plan (such as income-based payment plans) or a deferred-payment plan. Currently, there are...

The flow of home loans covered by private mortgage insurance into new Fannie Mae and Freddie Mac mortgage-backed securities fell by 11.5 percent during the first quarter of 2016, according to a new Inside Mortgage Finance analysis and ranking. That decline mirrored the 11.6 percent drop in purchase-mortgage securitization from the fourth quarter by the two government-sponsored enterprises. A slight uptick in refinance activity partly offset the slide in purchase-mortgage business. Private MIs do...[Includes two data tables]

Ginnie Mae issued $93.41 billion of single-family mortgage-backed securities during the first three months of 2016, an 8.6 percent drop from the previous quarter, according to a new Inside FHA/VA Lending analysis of loan-level MBS data, excluding FHA reverse-mortgage activity. Early 2016 was the slowest market in a year for Ginnie MBS production, though it still was stronger than most of the agency’s pre-2015 business. And issuance in the first quarter of 2016 was 17.0 percent ahead of the volume produced during the same period last year. The soft spot in the first quarter was FHA lending, especially purchase-mortgage activity. Issuers delivered $54.44 billion of FHA loans into Ginnie MBS during the period, a 12.1 percent drop from the fourth quarter, including a 15.0 percent decline in FHA purchase mortgages. Securitization of VA loans fell by a ... [4 charts].

Approximately 300 FHA lenders are seeing their recertifications held up because they failed to report in a timely manner events or changes that may affect their eligibility to participate in FHA programs.Delays are occurring because lenders have failed to notify the FHA of material events as soon as they have occurred and waited until the annual recertification to report them, according to industry sources. Under rules of the Department of Housing and Urban Development, a notice of material event alerts the agency to a significant change to the information provided by the lender at application that may affect its status as an FHA-approved lender. The department strongly encourages lenders to notify FHA within 10 days of the event to prevent delays during the annual recertification. Each FHA lender must complete the annual recertification process in order to retain its FHA approval. Lenders must ...

Policy changes are underway to prevent nonprofit groups from gaining an unfair advantage over legitimate investors in purchasing real estate-owned properties under the Department of Housing and Urban Development’s single-family property disposition program. An audit conducted by the HUD inspector general found that certain nonprofits were acting as investors while purchasing REO homes through HUD’s distressed-asset sales program. While this may seem to be a case of nonprofits gaming the system, the IG said no regulations were violated because program requirements did not explicitly bar nonprofits from acting as investors during the exclusive listing period. HUD’s distressed-asset sales program is designed to clear the department’s REO inventory in a manner that expands homeownership opportunities, strengthens neighborhoods and communities, and ensures a ...

The FHA has issued new, more permissive loss-mitigation guidelines for Home Equity Conversion Mortgages, including an optional extension for mortgagees when submitting due-and-payable requests. Additionally, the guidelines allow mortgagees to cure a HECM borrower’s taxes and/or insurance defaults as long as the FHA incurs no cost and the mortgagee agrees to refrain from seeking loan assignment for at least three years. The guidelines further remove a previous restriction prohibiting the use of the permissive loss-mitigation options announced in Mortgagee Letter 2015-11 for borrowers in foreclosure. Accordingly, for HECM loans that were in the process of foreclosure prior to the issuance of ML-2015-11, mortgagees may assess those borrowers for a repayment plan in accordance with the mortgagee letter. The repayment plan must have the ...

Cutting back on its FHA business helped reduce JPMorgan Chase’s foreclosure inventory but made it harder for the bank to meet its community reinvestment goals, according to the bank’s top executive. In a letter to shareholders, Jamie Dimon, president/CEO of JPMorgan Chase, said he would rather see the bank no longer service defaulted loans. “If we had our druthers, we would never service a defaulted mortgage again,” he wrote. “We do not want to be in the business of foreclosure because it is exceedingly painful for our customers, and it is difficult, costly and painful to us and our reputation.” Chase has cut back on FHA lending and has reinstated overlays in response to stiff penalties it paid to resolve False Claims Act allegations brought by the federal government. In 2014, Chase agreed to a $614 million settlement with the Department of Justice over allegations of ...

Fannie Mae and Freddie Mac saw a slight decline in their single-family mortgage business during the first three months of 2016 – in fact, it was the slowest quarter in nearly two years – according to a new analysis and ranking by Inside Mortgage Finance. The two government-sponsored enterprises issued $172.97 billion of single-family mortgage-backed securities during the first quarter of this year, a 3.4 percent decline from the fourth quarter of 2015. It was the slowest three-month volume since the second quarter of 2014, and the fourth-lowest output since the GSEs were put in conservatorship back in 2008. The slowdown stemmed...[Includes three data tables]

The new refinance program being developed for Fannie Mae and Freddie Mac borrowers with high loan-to-value ratios will not be available for homeowners who have already used the Home Affordable Refinance Program, according to the regulator of the two government-sponsored enterprises. The Federal Housing Finance Agency this year directed Fannie and Freddie to develop a replacement program for HARP, which will sunset at the end of 2016. MBS investors have been concerned...[Includes one data table]