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Inside FHA/VA Lending

September 25, 2008

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HUD and Mortgage Lenders Face Onslaught Of Change Amidst Booming FHA Volume

Officials from the Department of Housing and Urban Development are racing to implement a host of new program changes at a time when FHA market share is soaring and lenders are putting increased emphasis on a product designed to help the country pull out of the Great Depression. Read More

OMB Meets With Industry Groups On Controversial RESPA Reform Rule

The Office of Management and Budget has convened at least two meetings with Bush administration staff and outside experts to mull over a controversial proposal by the Department of Housing and Urban Development to overhaul the mortgage shopping process. At times in the past, the OMB has been the stage in the government rulemaking process where outside interests have succeeded in killing... Read More

Seller-Funded DAP, RBP Bill to House Floor

Bipartisan legislation allowing limited seller-funded downpayment assistance for FHA programs and deployment of a new risk-based premium pricing program may soon come up for a vote on the House floor. Last week, the House Financial Services Committee reported out a revised version of H.R. 6994, the FHA Seller-Financed Downpayment... Read More

Further Expansion of FHASecure Sought

The Department of Housing and Urban Development is weighing an industry recommendation to allow delinquent fixed-rate mortgages into the FHASecure program to get more distressed borrowers qualified for government rescue. In a letter last week to HUD Secretary Steve Preston, the Mortgage Bankers Association unveiled a list of... Read More

Secondary Market Reform, Early Disclosures Top Industry Priorities

An aggressive overhaul of the mortgage capital market, harmonization of early loan disclosures, and implementation of the Housing and Economic Recovery Act will be the focus of mortgage bankers’ lobbying efforts through next year. The current environment presents an opportunity for a bold “do over” for the mortgage industry, to... Read More

With Volume Up and Ongoing Market Tumult, Ginnie Mae Stiffens MBS Issuer Standard

Ginnie Mae late last week announced tougher eligibility rules for companies that want to be approved securities issuers in its rapidly growing MBS program. One of the most significant changes made is to the agency’s net worth requirements. According to the updated eligibility requirements, applicants must have an adjusted net worth of at least $1 million, including all single family MBS and home equity conversion MBS. If an issuer would like to deal with project… Read More

Amended FHA Bill on Seller-Funded Downpayment Aid, Risk-Based Premiums, Passed to House Floor

The House Financial Services Committee this week approved a revised bill that would revive a controversial FHA program for seller-funded downpayment assistance and allow the agency to deploy a new risk-based premium program. Committee Chairman Barney Frank, D-MA, pushed a revised version of H.R. 6694, the FHA Seller-Financed Downpayment... Read More

Federal Agencies Say FHA Homeowner Bailout Program Will Launch on Time

The Department of Housing and Urban Development and other federal regulators say the HOPE for Homeowners program will be up and running by its anticipated Oct. 1 implementation date, but there are still major hurdles in the way. In a testimony before the House Financial Services Committee this week, FHA Commissioner Brian Montgomery... Read More

FHA’s Past Actions a Concern For Refi Plan Participants

Participants in the FHA’s impending refinance program for troubled borrowers “do not want to be the ‘chumps’ to whom FHA reallocates the risk of loss,” according to Larry Platt, financial services practice area leader at K&L Gates. He said the FHA’s practice of reallocating the risk of loss on delinquent loans to lenders, as well as its... Read More

Emerging HOPE for Homeowners Program May Become Quicksand for Lenders

Mortgage lenders are eager for ways to reduce losses as the housing market continues to stagger, but a rapidly approaching government program to bail out underwater borrowers could prove to be a boondoggle for companies that participate in it. And industry groups aren’t at all happy with the pressure that sponsors of the HOPE... Read More

FHA Production Volume Keeps Streaking To New Record Levels in Third Quarter

A new Inside Mortgage Finance analysis of FHA data suggests that the venerable government-insurance program is still being revved at a record pace during the third quarter in an otherwise despondent mortgage market. Over 97,000 mortgage loans were endorsed by FHA lenders during August, up more than 10 percent from the record 87,246 FHA loans put on the books in July, according to our estimates. FHA officials say the program was running at an annual… Read More

MIs, Analysts See No Significant Short-Term Effect of Government Takeover of Fannie Mae, Freddie Mac

The government’s takeover of Fannie Mae and Freddie Mac over the weekend left the private mortgage insurance industry relieved that the intervention did not affect MI ratings or disrupt insurers’ business with the government-sponsored enterprises. But some observers expect the government to push the GSEs to do more high... Read More

FHA Announces RBP Moratorium Guidance, Reverts to Old Plan

Mortgage lenders reiterated their support for the Department of Housing and Urban Development’s effort to institute risk-based premium pricing and said they regretted that Congress did not allow the agency to go down that path. Lender groups said they were not surprised at all by HUD’s announcement to impose a one-year... Read More

FHA Not Thrilled with Seller-Funded DAP, RBP Tradeoff Bill

The Department of Housing and Urban Development will not support pending House legislation that would allow limited seller-funded downpayment assistance, even though the measure would also restore FHA risk-based premium pricing, a source familiar with department policymaking said. While department officials reportedly... Read More

Lenders Seek Clarity, Flexibility in HFH Plan

A regulatory board overseeing implementation of the $300 billion FHA borrower-rescue program under the recently enacted Homeownership and Economic Recovery Act of 2008 is considering guidance recommended by the mortgage industry. In a recent letter to the oversight board in charge of implementing The HOPE for Homeowners program, the... Read More

Loss Mitigation Still Preferred: Lenders Hint at Backup Role for HERA’s Borrower-Rescue Program

Lenders are likely to do more loss mitigation than refinancing under the Hope for Homeowners program to help distressed borrowers, although the $300 billion FHA borrower-rescue program will still be a valuable tool for people who can no longer be helped through loss mitigation, according to the mortgage banking industry. Reiterating previous... Read More

Lawmakers Try to Reinstate Seller-Financed DPA

Just one month after a Housing and Economic Recovery Act of 2008 provision ended a popular FHA program that allowed seller-funded downpayment assistance, bipartisan legislation aimed at reversing the decision surfaced in the House of Representatives. Reps. Al Green, D-TX, Maxine Waters, D-CA, Gary Miller, R-CA, and Christopher Shays... Read More

MBA Seeks Guidance for Borrower-Rescue Plan

The alternative mortgage product with the best growth may be the new FHA refinancing program authorized by the 2008 housing act, but industry groups say government officials designing the program need to be careful that it works for investors and servicers. Under pressure from key members of Congress, the Bush administration is... Read More

HUD Says Risk-Based Premium Pricing Good Until Oct. 1; Industry Not Surprised by Move

Mortgage industry groups said they were not surprised at all by the Department of Housing and Urban Development’s announcement last week to impose a one-year moratorium on risk-based pricing for FHA mortgages – and then start the program back up again in 2009. The Consumer Mortgage Coalition said HUD’s action was “what everybody... Read More

Government Lending Surges as Nonconforming Mortgage Sector Sinks Even Further in 2Q08

The nonconforming mortgage market continued to wilt under the pressure of rising loan defaults, deteriorating house prices and tighter underwriting standards, falling to less than 10 percent of new home loan production during the second quarter of 2008, according to a new analysis and ranking by Inside Mortgage Finance.... Read More

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