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Inside FHA/VA Lending

April 10, 2009

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FHA to Increase Fraud Monitoring Efforts

FHA officials announced plans to crack down hard on fraudulent activities last week, but delays in getting additional funds could expose the rapidly growing program to significant risk over the next several quarters. Department of Housing and Urban Development Secretary Shaun Donovan told a Senate appropriations subcommittee that he plans to use much of the... Read More

Many Pitfalls for FHA Adopting Obama Mod Plan

It is unclear whether the FHA can impose the stringent buyout provisions of the Obama administration’s new loan modification plan without any negative consequences to mortgage servicers, said a top industry compliance expert. Larry Platt, a partner with K&L Gates and a panelist during a recent audio conference hosted by Inside Mortgage Finance Publications, warned that such consequences... Read More

Technology Upgrades a Priority for FHA

The FHA’s mission in the coming year will be to shore up its information management capabilities to keep up with its new role in the mortgage industry, officials told a Senate subcommittee last week.The growth of the FHA market has been well-publicized – the volume of single-family FHA-insured originations has grown from $59 billion in 2007 to more than $180 billion, and FHA’s... Read More

Report: FHA ‘New High-Risk Segment of Lending’

The surge in FHA business has paved the road for FHA lending to become the new face of subprime fraud, according to a recent report from California-based BasePoint Analytics. Recent reports of increasing early default statistics are a leading indicator of fraud, even in an industry where “there is a frustrating lack of standardized fraud reporting,” said BasePoint... Read More

First H4H Loan Closed, Expectations Still Subdued

It took six months, but finally one American homeowner found HOPE. The FHA in late March closed the first loan in its thus-far-failed HOPE for Homeowners refinance program, according to the Department of Housing and Urban Development. Industry participants widely agree that H4H has been a huge disappointment, and even optimism is fading that program revisions in a Senate bill can get the program going... Read More

FHA Refinance Applications Slow in March

FHA refinance activity is still higher than it was in all of 2008, but slowed in March as Fannie Mae and Freddie Mac’s refi business surged to towering levels. The latest analysis of FHA data by Inside FHA Lending shows that 56.0 percent of FHA endorsements in the first half of March were refinances, in terms of number of loans, up only slightly from the 54.7 percent in... [Includes two graphs] Read More

HECM for Purchase Program Details Emerge

The FHA recently released more details about its reverse mortgage program for seniors seeking to buy a house, including a warning about “buy and bail” scams. The Home Equity Conversion Mortgage for Purchase program was authorized by the 2008 housing act and allows qualifying seniors to use HECM loan funds to purchase a new principal residence...In Mortgagee Read More

HECM Counseling Requirements Clarified

In an update to its counseling requirements for home equity conversion mortgages, the FHA reminded lenders that the prospective borrower, not the lender, must initiate counseling. According to Mortgagee Letter 2009-10, the FHA is adamant about prohibiting the lender from initiating the counseling process, because the agency does not want senior homeowners to feel pressured into... Read More

Fannie Issues New Guidelines for FHA Sellers

The government-sponsored enterprises play big parts in the booming FHA business, but Fannie Mae has recently updated its guidelines for purchases of government-insured loans and tightened its requirements for lenders selling seasoned FHA loans. In Announcement 09-09, Fannie stipulates that it will only buy government mortgages that were originated within the 12 months that... Read More

Electronic Delivery of FHA Loans Gains Steam

A Virginia-based mortgage document imaging company has joined the wave of industry technology vendors tailoring their electronic solutions to fit the now vital FHA sector. VirPack announced the addition of FHA loans to its imaging platform, Direct, which will now support electronic case binder delivery to the appropriate FHA Home Ownership Center. VirPack completed... Read More

Wells Holds a Quarter of Outstanding FHA Loans

Wells Fargo stood as the only servicer with more than 1 million FHA-insured loans in its portfolio at the end of February, accounting for 26.0 percent of the outstanding FHA loans, according to an Inside FHA Lending analysis of data from the Department of Housing and Urban Development’s Neighborhood Watch database. The mortgage giant surprised the... [Includes one chart] Read More

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