A coalition of financial services trade groups expressed support for the permanent extension of the one-year protection from foreclosure for service members who have just left the military. The provision under the Servicemembers Civil Relief Act will expire at the end of 2015 and revert to the original 90-day protection unless extended by legislation. Eight industry trade organizations in a joint letter urged House lawmakers to extend the provision through 2016 if they cannot make it permanent. Some service members continue to face financial hardship upon returning to civilian life, the groups noted. Slow recoveries in real-estate markets in certain areas of the country, particularly those around military bases, make it difficult for those retiring or opting out after their tour of duty is up to sell their houses. The protection becomes effective on the date the service member is ...

The Urban Institute has suggested separating FHA’s reverse mortgage business from future actuarial audits of the Mutual Mortgage Insurance Fund because it is producing a skewed picture of MMIF finances. In a recent blog, Laurie Goodman, director of the institute’s Housing Finance Policy Center, said including the highly volatile and unpredictable Home Equity Conversion Mortgage portfolio in FHA’s solvency calculation severely distorts the fund’s true financial condition ...

The first nine months of 2015 have seen a tremendous increase in FHA single-family originations as borrowers took advantage of a 50 basis-point premium reduction implemented earlier this year, according to Inside FHA/VA Lending’s analysis of agency data. Total FHA loan production during the first nine months of 2015 was up a whopping 81.3 percent increase. Data also showed a 13.1 percent increase in the third quarter from the prior quarter. It is hard to imagine that back in February this year, we reported a dismal ending for 2014, where overlays and high-loan costs caused an 8.1 percent decline in FHA endorsements in the fourth quarter and a 36.6 percent drop from 2013. In 2015, FHA fixed-rate originations increased 12.7 percent from the second to the third quarter, and rose 86.0 percent on a year-to-date basis. In 2014, conversion ... [ 2 charts ].

Despite FHA’s denial of further mortgage insurance premium reductions any time soon, stakeholders are holding out hope for another cut in the near future. Those supporting the idea of another pricing adjustment say it could open the door wider for more borrowers to use the FHA single-family program and generate the volume needed to offset any potential revenue loss that may result from the reduction. But Housing and Urban Development Secretary Julian Castro and his top officials have denied any plans of reducing MIPs. Castro has called such talk “premature,” despite a positive FY 2015 actuarial evaluation of the FHA’s Mutual Mortgage Insurance Fund, which some claim could be used to justify another premium reduction. Principal Deputy Assistant Secretary for Housing and Interim FHA Chief Ed Golding, in a press briefing, said the focus is elsewhere and not on ...

Though the Department of Housing and Urban Development strongly highlighted the positive aspects of the FY 2015 actuarial report on the state of Mutual Mortgage Insurance Fund, it also downplayed the impact of the Home Equity Conversion Mortgage portfolio on the latest projections. FHA’s volatile HECM portfolio has had an unpredictable impact on the MMI Fund – a drag in some years and a boost in others. According to the report, the actuarial value of HECM capital has swung dramatically over the last four years and stood at $6.8 billion in FY 2015, up from negative $1.2 billion in fiscal 2014. The 6.44 percent spike in HECM gains helped boost the MMI Fund’s capital reserve ratio to 2.07 percent, in excess of the minimum 2.0 percent capital requirement. Excluding HECMs, the FHA fund – and the forward portfolio – would be at 1.6 percent, below the 2.0 percent threshold. The ...

The FHA has issued temporary guidance for approving condominium projects for agency financing – a good first step, according to industry groups. Stakeholders have been waiting for a broader rewrite of the condominium rules for years, and they see the interim guidance as limited but positive. Announced on Nov. 13, the guidance is in place for a year while the FHA works on a more comprehensive rule that addresses all condominium lenders’ concerns. The temporary guidelines modify the requirements for condominium project recertification. It can cost up to $3,000 and, in some cases, take more than a year, to complete a condominium recertification project. The certification is good for only two years. Condo projects run afoul of FHA rules when the certification lapses, rendering the ...

It may take Ginnie Mae a bit longer than expected to make all the accounting corrections necessary before the Department of Housing and Urban Development’s inspector general to render a clean opinion on the guarantor’s fiscal 2015 financial statement and its restated financials for FY 2014. In fact, Ginnie might have to make some significant long-term investments to address the IG’s accounting concerns, said Thomas Weakland, acting chief financial officer at Ginnie Mae. The agency may have to spend on new technology and infrastructure, and beef up its staff “spanning multiple years” to remediate all of the IG’s concerns, said Weakland. However, Weakland did not state a timeline for making all the necessary corrections and adjustments. Until the IG is fully satisfied with the restatement, it will continue to withhold an audit opinion. “We recognized some of the efforts made and the constraints that ...

Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

Mortgage lenders are more willing to expand the credit box for FHA borrowers, but they appear to be getting more cautious about FHA lending, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. Over two thirds of FHA loans securitized in the first nine months of 2015 had credit scores below 700, and 6.2 percent of them had scores of 620 or lower. By comparison, 47.0 percent of VA loans were below 700 and just 4.4 percent were in the lowest category. But FHA lenders became more cautious as the year wore on. In the first quarter, 6.8 percent of FHA loans had scores of 620 or lower. That fell to just 6.0 percent in the third quarter. The FHA purchase-mortgage sector skews even further away from the riskiest borrowers and toward safer ground. The share of FHA purchase loans with scores of 620 or lower fell from 5.8 percent in the first ... [ 2 charts ]

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...