The amount of single-family Ginnie Mae mortgage servicing rights increased a modest 0.9 percent during the third quarter, according to a new analysis and ranking by Inside FHA/VA Lending. Some $1.858 trillion of Ginnie mortgage-backed securities were outstanding at the end of September, a 6.2 percent gain over the previous 12 months. Loans guaranteed by the VA continued to be the fastest growing segment of the Ginnie market. Volume was up 1.3 percent from the end of June, hitting $630.9 billion, an 11.0 percent increase from the same time last year. The FHA segment remained far bigger: $1.114 trillion at the end of the third quarter. However, its growth rate has been slower: 0.7 percent from June and 3.9 percent compared to September 2017. Loan performance deteriorated slightly in both programs. Some 92.9 percent of FHA loans were current at the end of September, down from ... [Charts]

Participants in Ginnie Mae’s single-family mortgage-backed securities program may expect new policy changes, including servicer and credit ratings for the largest issuers, clarification of “appropriate sources of liquidity” and other financial requirements. The changes come as issuer liquidity continues to be a primary concern for Ginnie Mae, particularly with nonbanks now the dominant segment in the single-family MBS program. “We’re working on those policies right now,” said Leslie Meaux Pordzik, Ginnie’s acting senior vice president, Office of Issuer and Portfolio Management, at the Mortgage Bankers Association’s annual convention in Washington, DC, this week. Nonbanks account for nearly two-thirds of Ginnie MBS issuance and approximately 75 percent of FHA and VA lending. Nonbanks serviced a record 61.1 percent of outstanding Ginnie single-family MBS at the end of the ...

The Department of Veterans Affairs has asked the Office of Management and Budget to review a draft final rule that would establish major requirements for guaranteed cash-out refinance loans. The Economic Growth, Regulatory Relief, and Consumer Protection Act, which reformed the Dodd-Frank Act, gave VA the authority to regulate cash-out refis. The agency has 180 days from enactment to promulgate regulations. The final rule sets the parameters of VA cash-out home loans, to include defining net tangible benefit, recoupment and seasoning requirements. The Dodd-Frank reform act and Ginnie Mae have established similar requirements for Interest Rate Reduction Refinance Loans. IRRRLs and, to a much lesser extent, cash-out refis came under scrutiny due to loan churning or serial refinancing. Last year, a small group of lenders targeted servicemembers and veterans with VA loans to ...

Information technology improvement is the top priority of government lending programs in the coming months and into 2019. Agency representatives at the Mortgage Bankers Association’s annual convention in Washington, DC, said policy changes are in the works to enhance and improve operations, compliance and customer service. FHA Commissioner Brian Montgomery, who joined the agency four months ago, said IT modernization is his primary concern. A state-of-the-art IT system and advanced data analytics are needed to manage FHA exposures effectively, he said. Montgomery made clear FHA has no plans to build a proprietary system but is considering the idea of shared technology, possibly with VA and USDA; something based on Fannie Mae’s and Freddie Mac’s systems; or some off-the-shelf software. In his view, a modern IT system would have automated underwriting that provides ...

Ginnie Mae has made considerable progress in dealing with rapid prepayments on VA loans but prepayment speeds on Ginnie mortgage-backed securities in general continue to annoy investors. Prepay speeds on Ginnie MBS are now at the lowest since 2014 but it is not enough for agency Executive Vice President Maren Kasper to feel confident as she addressed the annual convention of the Mortgage Bankers Association this week. “Our prepayment issue is not solved,” said Kasper, as she spoke on a panel with representatives of government-lending programs. The agency continues to hear from investors about the problem, she said. Kasper cited two instances where Ginnie officials were summoned to meetings in China and New York to explain the prepayments to irate investors. They threatened to stop purchasing Ginnie bonds, she said. Kasper declined to say how bad the ...

Community mortgage lenders are asking the U.S. Senate to consider with caution before voting on legislative language passed recently by the House of Representatives to address “orphan” VA streamline refinance loans. Specifically, the Community Mortgage Lenders of America asked the Senate to step back and allow some time for substitute language to be presented with input from the industry and the Department of Veterans Affairs. At issue is the wording in H.R. 6737, the Protect Affordable Mortgages for Veterans Act of 2018. The bill fixes a technical issue that prevented VA lenders from pooling certain VA Interest Rate Reduction Refinance Loans in Ginnie Mae mortgage-backed securities pools. Approximately 2,500 VA refi loans were affected by an inconsistency between the loan seasoning guidelines issued by Ginnie in late 2016 and provisions in the ...

The Department of Veterans Affairs will begin a new rulemaking on qualified mortgages to conform to Dodd-Frank reform act mandates. Observers say the move is simply housekeeping, since the previous QM interim final rule (IFR) requirements were rendered moot with the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act back in May. The new law, also known as the Dodd-Frank reform act, superseded the previous rule’s seasoning and recoupment requirements for VA Interest Rate Reduction Refinance Loans. Specifically, the act removed the category of rebuttable presumption for IRRRLs deemed as QM under the interim final rule. It also imposed new requirements that were not considered at the time the IFR was issued. The VA did not say whether changes were made ...

The CFPB will start a rulemaking process to clarify what practices will be deemed “abusive” in the bureau’s sweeping authority to ban unfair, deceptive and abusive acts or practices, said Acting CFPB Director Mick Mulvaney. Speaking at the annual convention of the Mortgage Bankers Association in Washington this week, Mulvaney said Congress has defined “unfair” and “deceptive” practices fairly clearly, but the meaning of “abusive” is not well established in the law....

A recent court ruling that Zillow’s co-marketing program does not violate the Real Estate Settlement Procedures Act is helpful to the industry, but lenders still need guidance from the CFPB to confirm the standards set by previous rulings, said compliance attorneys. Richard Andreano, a partner at Ballad Spahr, told Inside the CFPB that it is positive for lenders that a federal judge dismissed a lawsuit challenging Zillow’s co-marketing program. The bureau itself ...

The CFPB recently announced changes in how it communicates with lenders about supervisory events and how it will articulate supervisory expectations to institutions in the future. The bureau plans to continue sending examination reports and supervisory letters to institutions after exams are completed, according to a bulletin. These reports and letters will include two categories of findings: the matters requiring attention (MRAs) and supervisory ...