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Volume 10 - Number 16

August 4, 2017

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Correspondent Channel Held Up In Shifting 2Q17 FHA/VA Market

Correspondent-originated mortgages were the only segment of the VA market that saw an increase in activity during the second quarter, according to a new analysis and ranking by Inside FHA/VA Lending. Overall, VA loan securitization declined by 1.8 percent from the first to the second quarter of this year. But delivery of correspondent-originated VA loans was up 4.9 percent, while both the retail and wholesale-broker channels saw declines. It was a slightly different picture in the FHA segment of the Ginnie Mae mortgage-backed securities market. Overall volume was up 9.8 percent from the first quarter, with all three channels posting gains. Brokers saw the biggest increase in FHA business, with volume up 14.5 percent, although the correspondent channel also posted a 12.7 percent increase and remained the most active of the three production venues. Loan characteristics held steady in both ... [Charts]

Groups Seek Rule Change to Allow Private Flood Policies on FHA Loans

Industry groups representing lenders, real estate agents and insurance providers are urging the FHA to adopt a policy allowing borrowers to purchase private flood insurance on FHA-insured loans. In a recent letter, eight industry groups said FHA’s current stance of accepting only policies authorized by the National Flood Insurance Program contradicts Congress’ intent to encourage the use of private flood insurance and conflicts with current lender requirements. Congress is putting together a comprehensive legislative package of flood-insurance reforms, which would extend the NFIP for another five years and require lenders to accept private flood insurance to meet statutory flood-insurance requirements. The group said FHA’s current policy appears to conflict with lender requirements in the Biggert-Waters Flood Insurance Reform Act of 2012. A number of home-loan transactions have failed to ...

Senate Panel Unanimously Passes HUD FY 2018 Spending Package

The Senate Committee on Appropriations last week voted 31 to 0 to set aside $40.2 billion in discretionary spending for the Department of Housing and Urban Development for FY 2018. The full committee vote on July 31 followed a subcommittee vote earlier in the week. The Senate funding bill includes $400 billion in new loan commitments under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $130 million for FHA’s administrative expenses. However, the bill did not grant a HUD request for authority to impose a lender fee to help cover FHA’s information technology upgrades, risk management and quality-assurance improvements. The House HUD spending bill provided $130 million for administrative costs and added another $5 million for IT enhancement. House appropriators passed their version late last month. The Senate bill also ...

GNMA Fully Automates Platinum Securities Processing, Issuance

Ginnie Mae this week announced the full automation of Platinum securities processing and issuance – a key step in modernizing the agency’s outdated technology and infrastructure. Automation went into effect in mid-July and nearly $1 billion of the Platinum pools have been processed through the MyGinnieMae portal, the agency said in a statement. MyGinnieMae is a self-servicing portal that connects users and enables collaboration and the sharing of organizational knowledge, the agency explained. The year-to-date volume for Platinum mortgage-backed securities is $6.1 billion. Ginnie’s Multiclass Securities Program allows participating issuers to pool some of their MBS into a single Platinum trust, which issues securities based on the pool. A Platinum security is designed to improve liquidity of Ginnie MBS through trades or use in structured finance and repurchase transactions. Previously, Platinum products were ...

USMI Urges CFPB to Include Fed Agencies in ATR/QM Assessment

The private mortgage insurance industry urged the Consumer Financial Protection Bureau this week to consider including the qualified-mortgage standards of the FHA, VA and the U.S. Department of Agriculture in its assessment of the ability-to-repay/QM rule. In a comment letter, industry trade group U.S. Mortgage Insurers said it would be impossible to perform a full assessment of the ATR/QM rule without considering the different federal agency QM rules. If it does not expand the scope of its assessment, the CFPB should at least consider the impact the rules have on consumers in relation to the agency QM rules. In May, the CFPB notified stakeholders of its plan to evaluate the effectiveness of the ATR/QM rule in terms of its benefits and costs. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which established new standards for mortgage lending, including requiring lenders to assess consumers’ ability to repay. The statute also established a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement.

CA Wholesaler Unveils PACE Guidelines for FHA, VA Products

NewLeaf Wholesale has announced Property Assessed Clean Energy (PACE) guidelines for its FHA and VA mortgage products. PACE financing allows homeowners to retrofit their homes to make them more energy-efficient. The homeowner pays the loan as part of their property tax bill. In some states, PACE liens have superior status over all other liens, including a mortgage loan. A PACE assessment is a debt of property, where the obligation is tied to the property as opposed to the property owner. Hence, when the property is sold the new owner assumes the PACE lien. Last year, the FHA and VA issued guidance for approving purchase and refinance of mortgaged properties with PACE liens provided certain requirements are met. One requirement is that past due PACE loan amounts retain a first-lien position and this has raised some concern among industry groups that are opposed to ...

U.S. Announces Settlements with Contractor, Condo Complex Owner

A property management contractor for the Department of Housing and Urban Development has agreed to pay $4.3 million to resolve allegations that it billed the agency for FHA-related work it did not perform in violation of the federal False Claims Act. Cityside Management Corp. of Manchester, NH, allegedly failed to inspect the work of third-party vendors that it hired to perform termite inspections, treatments and repairs on repossessed houses in HUD’s real estate-owned inventory, as required by its contract with HUD. HUD’s inspector general investigated the case and referred it to the Department of Justice. Following the financial crisis, HUD held title to a large number of foreclosed homes acquired by borrowers with FHA financing. HUD contracted with various field service managers, including Cityside, to prepare the REO properties for resale. According to the Office of the U.S. Attorney for the ...

HUD Seeks OMB Clearance to Reinstate, Extend Data Collections

The Department of Housing and Urban Development is seeking public comment as well as approval from the Office of Management and Budget for a number of new or expired data collections relating to key FHA programs and issues. Out for a 30-day comment period are proposed data collections relating to the Home Equity Conversion Mortgage program, condominium project approval, claims and conveyance, and property inspection and preservation. Specifically, HUD has asked OMB to reinstate currently approved information collection, which is necessary to screen HECM applications to protect the FHA insurance fund, consumers and taxpayers. HUD also wants OMB approval to extend the forms used to determine the eligibility of borrowers and mortgage transactions for FHA insurance. In addition, HUD’s HECM counseling form was revised to include a property address line for purchase transactions and ...

Around the Industry

VA Announces VALERI Offline Dates. Due to a legacy loan purge, the Department of Veterans Affairs’ VA Loan Electronic Reporting Interface (VALERI) will be unavailable for loading servicing data. VALERI will be offline on the following dates; Aug. 4, 8 p.m. to Aug. 5, 11:59 p.m.; Aug. 11, 8 p.m. to Aug. 13, 12 noon; Aug. 18, 8 p.m. to Aug. 19, 11:59 p.m.; and Sept. 22, 8 p.m. to Sept. 23, 11:59 p.m. All times are EST. Senate Banking Panel Advances HUD Nominees. The Senate Committee on Banking, Housing and Urban Affairs has sent HUD nominations for consideration by the full Senate. On July 27, the committee approved by voice vote the nominations of J, Paul Compton Jr. and Anna Farias for HUD general counsel and assistant secretary for fair housing, respectively. Beal Rackleff’s nomination for HUD assistant secretary for community planning and development also was approved by voice vote ...

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