A 10 basis point surcharge on Fannie Mae and Freddie Mac guaranty fees that went into effect in 2012 could end up being extended for another five years as lawmakers on Capitol Hill look for money to back the federal government’s Highway Trust Fund. The 10 percent increase in the government-sponsored enterprises’ g-fees was designed to pay for an extension of a federal payroll tax cut. It is currently scheduled to run to 2021, generating $35.7 billion in revenue, according to the Congressional Budget Office. With transportation funding set to expire Oct. 29, the House this week approved...

The Federal Reserve’s zero interest rate policy lives to die another day, as the Fed’s Open Market Committee opted this week to hold the line on a rate increase, as it has since December 2008, leaving investors and other market participants to try to read the tea leaves as best they can. “To support continued progress toward maximum employment and price stability, the committee today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate,” the FOMC said in its much-anticipated statement, issued mid-week. In making its decision about whether to raise the target range at its next meeting, scheduled for mid-December, the Fed said...

It makes sense that Fannie Mae/Freddie Mac g-fees should be used to pay for highway repairs. After all, people drive on highways to reach their homes which were bought with mortgages likely guaranteed by the two.

JPMorgan Chase was set to issue its latest jumbo mortgage-backed security as Inside Nonconforming Markets went to press. The bank’s sixth jumbo MBS of the year was slated to be a $344.87 million deal, according to presale reports. Chase continued to stock its jumbo MBS with loans that have seasoned a while longer than other issuers. Loans in JPMorgan Mortgage Trust 2015-6 had seasoned for an average of nine months, according to DBRS. Nearly 20 percent of the mortgages appear to have application dates from before Jan. 10, 2014. All of the loans subject to standards for qualified mortgages were deemed...

Questions from Inside Nonconforming Markets prompted the Consumer Financial Protection Bureau to acknowledge last week that its director misspoke during a speech at the Mortgage Bankers Association’s annual convention. In arguing that the CFPB’s ability-to-repay rule hasn’t caused a significant reduction in mortgage originations, Richard Cordray said last week that “most” jumbo loans are non-qualified mortgages. While comprehensive data on the non-QM share of jumbo mortgages is not available, a number of data sources suggest that most jumbos are in fact QMs, not non-QMs. Three of the five largest jumbo lenders told...

Citadel Loan Servicing, Irvine, CA, one of the most active nonprime residential lenders in the market, is on track to fund a company-record $400 million worth of mortgages this year, more than double what it produced last year. In a brief interview with Inside Nonconforming Markets this week, company founder and CEO Dan Perl said his goal for next year is $1 billion – all in loans that do not meet the qualified-mortgage standard. If the privately held Citadel – Perl is the chief shareholder – can hit...

The market is there – in nonprime and non-QM lending – the question is figuring out how to do it successfully, according to experts on a panel at the recent annual convention of the Mortgage Bankers Association. Most of the lending that’s fallen outside the qualified-mortgage standard has been to high net-worth individuals, said Matthew Nichols, CEO at Deephaven Mortgage. Most of them have millions in the bank and they’re being served by their bankers, he said, but there are a lot more potential non-QM borrowers who don’t have millions in the bank. Nichols said...

A bipartisan group of lawmakers is clamoring for reform of existing FHA condo rules, saying that temporary guidance issued by the Department of Housing and Urban Development in 2012 has failed to boost the condominium market. In a letter to HUD Secretary Julian Castro, 69 House members called for policy changes that would relax FHA restrictions to facilitate the purchase and sale of condominiums. Condos are the most affordable homeownership option for first-time homebuyers, small urban families and elderly Americans, the letter pointed out. “The FHA certification process can be daunting, especially for smaller properties and those without professional management,” it stated. “It takes significant time and resources to collect the required information and provide the necessary paperwork to become certified, and this must be done every two years.” Lapsed condo certifications are also a problem because ...

Community lenders renewed their call for a further cut in FHA mortgage insurance premiums amid speculation that a healthier FHA insurance fund could lead to another reduction. But analysts are less optimistic about another premium reduction for different reasons. In a letter to FHA Acting Commissioner Edward Golding, the Community Home Lenders Association asked that the annual MIP be reduced to the pre-crisis level of 0.55 percent when FHA’s capital reserve ratio returns to the statutory 2.0 percent level. The call comes less than a month before FHA issues its highly anticipated annual actuarial report on the state of the Mutual Mortgage Insurance Fund. There is speculation within the mortgage industry that the FY 2015 report will show improved FHA fundamentals, bringing the fund closer or over its statutory 2.0 percent capital reserve ratio. The report is expected to highlight the positive results of a ...

Servicers of FHA mortgage loans dodged a regulatory bullet after the Department of Housing and Urban Development withdrew part of a recently proposed rule, which would terminate insurance coverage if an FHA claim were not filed within a certain period. HUD withdrew the provision under heavy pressure from mortgage lenders, servicers and other industry participants, who expressed concern over the punitive penalty for missing prescribed filing deadlines. Published on July 6, 2015, the proposed rule, among other things, would have established a deadline for filing FHA insurance claims to address the problem of delayed claims filing, which put a strain on FHA resources. Late filings were tolerated previously but the problem worsened after the financial crisis when servicers began submitting FHA claims in bunches, causing processing bottlenecks and longer turnaround time for ...