Lending groups are urging the Consumer Financial Protection Bureau to broaden classifications of “qualified mortgages” that it adopted in its final rule implementing ability-to-repay standards mandated by the Dodd-Frank Act. The Mortgage Bankers Association said the interest-rate threshold for determining which loans are eligible for safe harbor provided to QM loans should be raised. The CFPB rule generally allows QM status for loans with annual percentage rates up to 1.5 percentage points higher than ...
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 ...
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 ...
The National Association of Federal Credit Unions is urging the Consumer Financial Protection Bureau to take another look at the usefulness of APR disclosures, among other things.
Warehouse banks that extend credit to nonbank residential lenders ended the fourth quarter with almost $40 billion in commitments on their books, their best quarter of the year, according to exclusive survey figures compiled by Inside Mortgage Finance. The top five warehouse banks – which control about half of the estimated total market – had $19.9 billion of commitments on their books, a 4 percent improvement from the third quarter. Compared to the end of March, commitments were up 37 percent. Wells Fargo, the largest buyer from correspondents, ranked...[Includes one data chart]
The group of regulators that established the $25 billion national servicing settlement with five servicers is in negotiations to expand the settlement’s requirements and monetary penalties to other servicers. Some servicers involved in the negotiations are willing to comply with the servicing requirements but objecting to paying any penalties. “We continue to have productive discussions with the state regulators, state attorneys general and the [Consumer Financial Protection Bureau] on adopting standards similar to the national mortgage standards adopted by the big banks,” Ronald Faris, president and CEO of Ocwen Financial, said last week during the company’s earnings call for the fourth quarter of 2012. “Ocwen Loan Servicing and other servicers have also been asked...
When a lender like Wells Fargo – the top lender and servicer in the industry – describes a lengthy list of “pain points” in the new loan originator compensation rule issued by the Consumer Financial Protection Bureau, it’s fair to conclude the rule presents a huge challenge for mere mortals. During an Inside Mortgage Finance webinar last week on the bureau’s final rule, Amy Thoreson Long, senior counsel in the consumer lending division of Wells’ law department in Minneapolis, started with one of the most visceral issues for lenders: the human impact. “One of the big key things here is...
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