The election of Donald Trump and Republican control of Congress could prompt changes to standards for qualified mortgages, according to industry analysts. QM standards were established by the Dodd-Frank Act in 2010 and took effect in 2014 as part of the Consumer Financial Protection Bureau’s ability-to-repay rule. Trump’s financial services policy implementation team said it will work to dismantle the DFA and “replace it with new policies to encourage economic growth and ...

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...

Aggressive refinance solicitation can be a double-edged sword for lenders: It could either result in increased VA refi business or, as the Consumer Financial Protection Bureau found out, consumer complaints. Since the CFPB began taking mortgage-related complaints in 2012, it has received more than 12,500 complaints from servicemembers, veterans, and their families. Of those complaints, 1,800 were related to VA refinancing. The VA offers two types of refinancing options to eligible borrowers – the VA cash-out refinance and the VA streamline refi, or Interest Rate Reduction Refinance Loan (IRRRL). In a cash-out refi, the veteran homeowner can refinance a VA or non-VA loan into a lower-rate VA loan and take cash out of home equity to pay off a debt, finance an educational pursuit or pay for a home improvement. The VA will guaranty up to the full value of the home. On the other hand, an IRRRL can only refinance a ...

State housing finance agencies’ downpayment assistance poses minimal risk to the FHA, and the scope of the problem is nowhere near the size suggested by the Department of Housing and Urban Development’s inspector general, according to a new study by the Urban Institute. The study’s conclusion would appear to bolster HUD’s defense of permissible downpayment assistance in a disagreement with the agency’s inspector general. The dispute arose from an IG audit of NOVA Financial & Investment Corp., an originator of FHA-insured mortgages with downpayment assistance provided by state housing finance agencies (HFAs). In a July 2015 report on NOVA’s audit, the IG alleged that some HFAs were allowing downpayment assistance that was being paid for through higher mortgage rates, in violation of FHA requirements for downpayment assistance. It also put FHA’s mortgage insurance fund at ...

VA lenders must now submit their condominium approval requests electronically to the VA Home Loan Program to enable the agency to lower condo-approval costs and speed up the process. The process of shifting from paper to electronic submission of VA condo-approval documents began on Nov. 3. Lenders and other program participants are required to upload their condo association documents into WebLGY in PDF format. A condo record must exist in WebLGY in order to upload the required paperwork. Directions on how to search condo records and create a new record may be found in the Quick Reference Document. Users can access the site via a link in Section 6 of VA Circular 26-16-35. When creating a new record, documents within the file or that uploaded individually must be stacked and labeled in the ...

FHA and VA loan performance improved in the third quarter of 2016 as the delinquency rate on government-backed loans declined on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest mortgage delinquency survey. The FHA delinquency rate fell by 16 basis points to 8.30 percent, its lowest level since 4Q97, with all categories – 30-days, 60-days and 90 days + past due – reflecting the decline. Over the quarter, the delinquency rate of FHA loans with payments 30 days past due dropped 4 bps from the previous quarter. Insured loans that were 60 days behind on their payments saw a 6 bps drop in their delinquency rate, while that for seriously delinquent loans fell 9 bps during the period. FHA mortgages showed some declines in performance on a non-seasonally adjusted basis. Approximately 8.70 percent of outstanding FHA loans were past due as of the end of the third quarter, up 25 bps from the ...

Industry Groups Urge Congressional Leaders to Pass ‘Tax Extenders’ Legislation. Three industry groups called upon House and Senate leaders to pass “tax extenders” legislation, including two critical tax provisions that are scheduled to expire at the end of 2016. In a joint letter this week, the Mortgage Bankers Association, National Association of Realtors and the National Association of Home Builders called for the “rapid enactment” of a broad “tax extenders” package, including mortgage-debt forgiveness and tax deduction for mortgage insurance premiums. Passing a legislative package of tax extenders that includes the two provisions would provide much-needed certainty to the residential real estate markets, the letter said. Federal Agencies Propose Rule to Expand Access to Private Flood Insurance. Federal banking and credit union regulators and the Farm Credit Administration have published a ...

Most of the lift in third-quarter mortgage originations came from the tail end of the refinance boom, especially in the agency market, according to a new Inside Mortgage Finance analysis. The government-insured market saw a hefty 21.4 percent jump in mortgage originations from the second to the third quarter as the sector reached an estimated $159.0 billion and accounted for 27.4 percent of total first-lien production. It was the second consecutive record quarter for FHA, VA and Department of Agriculture rural-housing production. The conventional-conforming segment was not far behind...[Includes two data tables]

Inside-the-Beltway analysts are predicting that financial regulation and new agency leadership posts will be a primary battleground in the incoming Trump administration. The Bipartisan Policy Center said nominating and confirming people to fill seats on financial regulatory agencies, and at the Treasury, will likely be the most important moves made by the new president and Congress. President-elect Trump wants...