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 ...

Banks with major Ginnie Mae portfolios – and even smaller firms – increased their purchases of delinquent mortgages out of MBS pools in the fourth quarter compared to the third as a way to save money and refinance troubled loans. According to an analysis by Inside FHA Lending, the top 50 Ginnie Mae issuers bought $12.65 billion of problem loans out trusts in fourth quarter compared to $11.17 billion in the third, an increase of 13 percent. “Once you buy the loan it goes into your portfolio,” said Tim Rood, a partner in The Collingwood Group, a Washington-based advisory firm. “You can try to re-perform it and then re-securitize it,” he said. Wells Fargo, the largest Ginnie Mae servicer in the nation with a portfolio of $412 billion, purchased ... [1 chart]

The reverse mortgage lending industry has asked Senate lawmakers to expand the Department of Housing and Urban Development’s authority to strengthen its oversight of the Home Equity Conversion Mortgage program. Testifying before the Senate Committee on Banking, Housing and Urban Affairs recently, Peter Bell, president of the National Reverse Mortgage Lenders Association, said it is crucial for HUD to be able to act swiftly to reduce the risk the program poses to the FHA insurance fund. Bell said HUD needs to implement changes “in a matter of months, not years” and for that to happen, it would need authority from Congress to ...

Reverse Mortgage Solutions, a HECM lender bought by Walter Investment Management Corp. last fall, has received a $100 million warehouse line of credit from Royal Bank of Scotland, according to a new filing with the Securities and Exchange Commission. The line is legally structured as a master repurchase agreement. However, it is also considered “uncommitted” and matures in February of 2014. RMS will use the money to fund new originations of HUD-backed home equity conversion mortgages. Several of the nation’s largest banks have exited the HECM space the past two years, including Wells Fargo and Bank of America. A handful of nonbanks have moved ...

House Republicans may be able to pass tough FHA reform and solvency legislation out of committee but they may not have enough votes on the House floor or in the Senate to sustain such a bill, according to industry sources. Even after two successive hearings in the House Financial Services Committee this month, there has been no clear indication from Chairman Jeb Hensarling, R-TX, as to which proposals might go into a legislative package of FHA reforms. Hensarling is said to be operating “with a very strong hand,” and if it were up to him entirely, he would draft legislation that would contain some ...

Wells Fargo suffered a big legal setback after a federal judge denied its request to enforce a consent judgment under last year’s landmark $25 billion servicing settlement to prevent a New York lawsuit from proceeding. Judge Rosemary Collyer of the U.S. District Court for the District of Columbia rejected Wells Fargo’s argument that the new government suit filed in Manhattan district court was improper because it violated the consent judgment against Wells Fargo and flies in the face of the judgment’s “liability release” provision. Wells Fargo argued that the allegations in a civil mortgage fraud suit filed by ...

The delinquency rate of single-family mortgage loans fell to 7.09 percent of all loans outstanding on a seasonally adjusted basis at the end of the fourth quarter in 2012, the lowest level since 2008, according to the latest Mortgage Bankers Association’s national delinquency survey. The performance of FHA loans, on the other hand, was “mixed,” it said.Loan delinquencies decreased 31 basis points from the prior quarter, and were down 49 basis points from a year ago due to significant improvements in mortgage performance nationwide and in almost every state, the trade group said.“The 30-day delinquency rate dropped by ...

A modest decline in FHA endorsements of jumbo loans in the fourth quarter of 2012 could presage further declines this year, following the Department of Housing and Urban Development’s recent proposal to raise the downpayment requirement to 5 percent, from 3.5 percent, for loans above $625,500. The FHA already has raised its jumbo mortgage insurance premiums to 1.55 percent annually and increased the monthly premiums on new, non-jumbo FHA mortgages by 10 basis points. The agency retained the 3.5 percent downpayment for new forward mortgages below $625,500. The increased premiums are ... [2 charts]