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Inside FHA/VA Lending

November 26, 2008

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Rise in FHA Lending Could Trigger Increased Fair Lending Scrutiny

The increase in government lending, particularly to black and Hispanic borrowers, could raise new fair-lending concerns for lenders, warned fair lending experts at a recent conference hosted by the Consumer Bankers Association. Over the past years, the focus of fair lending scrutiny and enforcement has been on pricing issues for conventional prime and... Read More

FHA Lending Boom Continues in October

A record 168,062 single-family mortgages were endorsed for FHA insurance in October, continuing a surge in program activity that may only be slowed by seasonal factors as the mortgage market heads into winter. October’s FHA endorsement activity was up 12 percent from September’s volume and represented the tenth consecutive monthly increase in production... [Includes one chart and one graph] Read More

HUD Chief Calls for Investment in FHA Systems

The government needs to give the FHA more resources to upgrade its information systems and better manage its growing business, says Housing and Urban Development Secretary Steve Preston. “FHA must continue moving into the 21st century on the operations front, with a focus on modernizing critical information technology systems that support FHA’s core business functions,” Preston said in... Read More

Audit Calls for Risk Assessment of FHA IT

The FHA needs to continue to modernize and improve its information systems even as it grapples with the growing burden on the system of programs such as HOPE for Homeowners, according to an independent audit report. In a recent FHA review conducted for the Inspector General of the Department of Housing and Urban Development, auditors with Urbach Kahn & Werlin found deficiencies that may... Read More

HUD Makes Anticipated Changes to H4H

A month after launching the HOPE for Homeowners refinance program to a less than enthusiastic reception, the Department of Housing and Urban Development announced changes designed to increase the program’s flexibility and encourage more lenders and servicers to participate. H4H loans can now have loan-to-value ratios as high as 96.5 percent – up from 90.0 percent – and loan... Read More

H4H May Be Hindered by Cramdowns

By the time HOPE for Homeowners rolled off the assembly line, its backers on Capitol Hill had largely conceded that the program needed to be changed if it was going to have the impact they hoped for. One way to do that is to require mortgage servicers to participate in H4H when borrowers apply for the program. The “Homeowner Assistance and Taxpayer Protection Act,” introduced to the Senate by... Read More

VA Lending Follows FHA’s Upward Contrail

While the overall mortgage market continues its downward slide, FHA lending has shot through the roof this year, and VA lending is following the same trajectory – at a slightly lower altitude. VA lending grew to $11.8 billion in the third quarter of 2008, up 34 percent from the previous period. That lifted year-to-date VA production a... [Includes one chart] Read More

HUD Drops FHA Fee Cap in New RESPA Rule

Buried in the controversial final Real Estate Settlement Procedures Act rule issued recently by the Department of Housing and Urban Development was a provision eliminating the cap on origination fees charged by mortgage brokers for FHA loans. The thrust of the new RESPA rule, the first major overhaul in 30 years, is a set of expanded disclosure requirements for good-faith... Read More

Though Underfunded, HUD Pushes on With Studies

The Department of Housing and Urban Development completed a number of major changes in the FHA program in recent months as it works to implement the FHA modernization enacted this summer – but the agency still has a number of less-publicized studies, pilot programsand work group projects to tackle. Each study is different, and each one was commissioned by a member of Congress by way of... Read More

Industry Groups Seek Extension of FHASecure

The FHASecure program has yielded somewhat modest results in the number of delinquent conventional mortgages that have refinanced to FHA loans, but industry groups are urging the Department of Housing and Urban Development to keep the program going. FHASecure, created administratively without requiring legislation from Congress, is slated to sunset Dec. 31. According to the most... Read More

Candidates to Become HUD Secretary Emerge

The next secretary of the Department of Housing and Urban Development may get considerable support from the incoming Obama administration and a Democrat-controlled Congress, but he or she also faces a significant challenge in keeping the fast-growing FHA program on sound financial footing. Several names are being floated in transition Washington as possible Obama picks... Read More

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