Sellers saw a modest increase in VA loans delivered to Ginnie Mae in the second quarter of 2015, most of which were streamline refinance loans, but FHA definitely took the cake, according to an Inside FHA/VA Lending analysis of agency data. Approximately $39.1 billion in VA purchase and refi loans were placed in Ginnie Mae pools in the second quarter, up 11.8 percent from the prior quarter. Of that amount, $20.9 billion were VA refinances, up 2.1 percent from the first quarter. Some 52 percent of the VA refis were originated in-house while correspondents accounted for 30.7 percent. Brokers brought in 17.3 percent of the securitized VA refi loans. VA purchase loans underlie an estimated $18.2 billion in Ginnie mortgage-backed securities in the second quarter, 48.4 percent of them retail. That number was up 25.5 percent from the previous quarter. VA loan correspondents were busy as well, accounting for ... [ 2 charts ]

The fastest-growing sectors of the mortgage market during the second quarter of 2015 were jumbo loans and government-insured production, according to a new Inside Mortgage Finance ranking and analysis. The conventional-conforming segment remains the biggest piece of the mortgage market, accounting for 52.8 percent of originations during the second quarter. Back in early 2013, when refinance activity accounted for three of every four new home loans, the conventional-conforming share was 68.1 percent. Lenders generated...[Includes two data charts]

FHA/VA lender Castle & Cooke Mortgage is embarking on a major expansion that could boost their standing in the government-backed market if things work out as planned. The Salt Lake City-based retail lender is in the midst of an aggressive expansion plan to be in 48 states by the end of 2016, according to Adam Thorpe, who was named president and chief operating officer in late 2014. C&C’s government-backed lending activities are mostly in the West with licenses to operate in 18 states. Recently the company, which entered the mortgage market in 2005, opened a new branch office in Anaheim, CA, bringing to 36 the number of C&C branch offices across the country. Orange County and the Southern California housing market are among the priciest in the nation, and the high demand and lower inventory in those areas can be good for government and ...

Department of Housing and Urban Development program staff and the agency’s inspector general are reportedly at loggerheads over an IG recommendation to deny FHA insurance to loans that receive downpayment assistance from programs funded through premium-pricing mechanisms. Responding to critics, the HUD OIG is standing by its audit findings, which could force the HUD deputy secretary to intervene in order to resolve the issues raised by the audit report and restore lender confidence. The report’s recommendation has alarmed lenders that participate in downpayment assistance “gift” programs run by housing finance agencies (HFAs). This prompted Ed Golding, HUD’s principal deputy assistant secretary for housing and head of the FHA, to issue a clarification of the FHA’s position on the issue. Golding’s note reaffirmed FHA’s support for certain downpayment assistance programs (DAPs), “like those run by ...

The Department of Housing and Urban Development’s proposal to remove a key disclosure in a standard HUD/VA form that comes with a residential mortgage closing document is getting flak from the mortgage industry and from some members of Congress. Leading Democrats on the Senate Banking and House Financial Services committees are pushing HUD to reconsider the proposal. They fear the proposed change would make it easier for lenders that have engaged in criminal behavior to re-enter the FHA and VA markets and continue their illegal lending practices. Among other things, HUD’s proposal would eliminate the requirement that FHA lenders certify on each loan application that they are not, or have not recently been, subject to certain charges or penalties. In their letter, Senators Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, urged HUD to ...

A multi-million dollar false claim lawsuit filed by the Department of Justice against Wells Fargo in 2012 appears headed to trial unless both sides agree to renegotiate a settlement. Brought under the federal False Claims Act, the lawsuit has moved on to the discovery phase of the litigation following a failed attempt by the parties to reach a settlement. The DOJ has wielded the FCA effectively in the past couple of years in efforts to recover losses from lenders that allegedly committed loan fraud against the FHA. A string of FCA lawsuits against FHA lenders has resulted in approximately $4.5 billion in recoveries for the government. The 2012 lawsuit alleged that Wells Fargo misled the FHA as to the quality of underwriting on 6,320 FHA-insured loans, which later caused approximately $190 million in losses to the agency’s mortgage insurance fund. Wells Fargo has denied the allegations and maintains that, as a ...

The Federal Home Loan Bank Mortgage Partnership Finance program has announced its first security issuance with a Ginnie Mae guarantee. The $5 million security is backed by home loans originated by community banks and credit unions through the MPF Government MBS product. The Mortgage Bankers Association welcomed the new MBS, seeing it as another opportunity for all lenders to access the capital markets directly, reducing costs and increasing originations. “Many community banks use the FHLB MPF program to sell conventional mortgages into the secondary market,” observed Ron Haynie, senior vice president at the Independent Community Bankers of America. “This expansion in aggregating and securitizing government loans provides community banks with the opportunity to reach more borrowers, especially in rural and small-town markets, and to safely sell those loans to ...

The Federal Home Loan Bank’s Mortgage Partnership Finance (MPF) Program has removed certain barriers to streamline refinancing of government-backed mortgages. Effective on July 6, 2015, the MPF no longer requires minimum FICO score, maximum loan-to-value ratios or appraisals for FHA streamlined refis, VA Interest Rate Reduction Refinance loans and rural housing home loans with a U.S. Department of Agriculture guarantee. The MPF program’s participating financial institutions (PFIs) may now originate and underwrite streamline refis based solely on the requirements of the FHA, VA or the USDA’s Rural Housing Service. The program currently requires borrower and co-borrower income for government loan streamline refis for the purpose of loan presentment. “Presentment” refers to the right to require a lender to demand payment of amounts ...

Ginnie Mae issuance of government-insured mortgage-backed securities rose a whopping 47.3 percent in the second quarter of 2015 from the previous quarter, powered by a robust FHA refinancing volume, according to an Inside FHA/VA Lending analysis of agency data. Government-backed Ginnie MBS production in the second quarter totaled $117.5 billion, up from $79.8 billion in the prior quarter. Volume year-to-date also increased by 57.7 percent from the first six months of last year. From May to June, government-backed securitization increased a modest 2.9 percent. FHA loans comprised 62.6 percent of Ginnie MBS issuance in the second quarter while VA accounted for 33.7 percent. Securitized loans with a Rural Housing Service guaranty represented 3.6 percent of total Ginnie MBS issuance during the period. FHA loan securitization was robust in the second quarter, as volume ... [ Charts ]

Rising home values could present a new opportunity for FHA borrowers to refinance into a conventional loan and enable those borrowers who choose to stay with FHA financing to take advantage of FHA’s reduced annual mortgage insurance premium, according to lenders. With house prices on the rise, FHA borrowers are seeing a build-up in equity. This might be a good time for them to remove that monthly payment and get out of their FHA loan, said Faramaz Moeen-Ziai, vice president of national sales and production at Commerce Home Mortgage in Huntington, CA. With an FHA-insured loan, coverage is for the life of the loan while private mortgage insurance on a conventional is cancellable when paid down to 79 percent of the loan amount. This might be especially beneficial to homeowners living in homes valued far less than what they owe on the property, or to holders of ...