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Inside Mortgage Finance

April 7, 2006

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Bush Administration’s FHA Modernization Plan Includes Higher Loan Limits in High-Cost Areas, Risk-Based Premiums

The Bush administration’s bid to modernize a slumping FHA mortgage insurance program this week won solid bipartisan support – at least in concept – in the House Financial Services Subcommittee on Housing and Community Opportunity. The legislative proposal features higher FHA loan limits in pricier housing markets, risk-based insurance premiums, and greater downpayment flexibility. It was designed to address the plummeting popularity of the FHA program, which fell from roughly 9 percent of total… Read More

Mortgage Market Starting to Brace for Expected Surge in Delinquencies, Defaults

The residential mortgage market – particularly lenders that service the $6 trillion or so in mortgages originated over the past two years – is starting to brace itself for an expected surge in delinquencies and defaults as rising interest rates and flattening home prices take hold. And concerns already are surfacing that the lending industry may be severely challenged in handling problem loans in a new regulatory environment. … Read More

Industry Groups Working on Standardizing GFE, HUD-1 Forms to Bring Certainty to Closing Costs

The Mortgage Bankers Association and a few other financial trade associations are nearing completion of model forms that would achieve what federal housing regulators have been trying to accomplish with mortgage settlement reform – simplicity and certainty in closing cost. The project began last year after a series of RESPA roundtable meetings hosted by the Department of Housing and Urban Development to gather views, suggestions and recommendations from RESPA stakeholders on how to approach… Read More

MBA Technology Conference Highlights Faster Processing, Gradual Transition to e-Mortgage

Mortgage banking technology experts are still very much committed to the all-electronic mortgage transaction, but a lot of the attention at last week’s annual tech gathering in San Diego was on emerging service-oriented architecture and other strategies for ironing out the kinks in loan processing. In fact, the Mortgage Bankers Association devoted an entire panel to service-oriented architecture, or SOA, at the technology conference – and drew a standing room only crowd of about 300… Read More

General Motors Finds Investors for Major Stake In its Mortgage Banking, Conduit Businesses

General Motors sold off a 51 percent stake in its GMAC financing operations this week in a fire sale that will funnel about $14 billion in badly needed cash into the ailing auto maker’s coffers over the next three years. A consortium led by hedge fund Cerberus Capital Management will transfer to GM $7.4 billion in cash when the deal closes sometime in the fourth quarter. GM will also get another $2.7 billion in cash… Read More

Regulators Begin to Show More Interest as Mortgage Industry Steps up Use of Automated Valuation Models

In a declining mortgage origination environment, lenders are looking to cut costs wherever possible, often by automating processes. One area where automation is gaining acceptance is appraisals. However, as automated valuation models grow in popularity with lenders and the government-sponsored enterprises, AVMs have also gained the notice of regulators. Guidance on AVMs is scarce, though the Office of the Comptroller of the Currency has addressed valuation shopping and lenders expect that more detailed guidance is… Read More

Mortgage Deliveries to Fannie and Freddie Slow in Early 2006, But Market Remains More Favorable to GSEs

Mortgage deliveries to Fannie Mae and Freddie Mac clearly slowed down in the first quarter of this year, but the government-sponsored enterprises are starting out ahead of the pace they set in early 2005, a new analysis by Inside Mortgage Finance reveals. A total of $111.86 billion of single-family mortgages were pooled in Fannie Mae MBS during the first quarter of 2006, down 8.7 percent from the GSE’s volume during the final three months of… [One data table included] Read More

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