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Inside FHA/VA Lending

May 14, 2010

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FHA Changes Cause Lenders Headaches

Changes to FHA regulations aimed at increasing lender accountability and strengthening the lender base are having ripple effects that are making life difficult for both mortgagees and third-party originators attempting to remain in the FHA market.The two major changes that will affect lenders are increased net worth requirements and no further correspondent approvals by the FHA, both of which will... Read More

FHA Stability Improving, But Worries Persist

Government officials said efforts to shore up the FHA’s insurance fund, remove fraudulent practices from the program and improve loan performance are making significant progress, but the still-uncertain housing market remains a cloud over the operation. Speaking before lawmakers on a Senate appropriations subcommittee, FHA Commissioner David Stevens said the program’s total capital reserves are currently... Read More

Mortgage Insurers Pricing to Compete with FHA

Private mortgage insurers are seeing a distinct improvement in delinquencies and a return of private investor capital, but it’s unclear how much market share they will be able to reclaim from the FHA. Private MIs saw their share of new primary insurance activity sink to a record low of 11.8 percent in late 2009. Up until 2009, private MIs accounted for upwards of 77.3 percent of new mortgage... Read More

Vendors Solicited to Develop FHA Safety Measures

Flush with a much bigger information technology budget, the FHA has made its anti-fraud initiative a top priority. The agency this week released a request-for-proposal under its Risk and Fraud Initiative, which aims to strengthen the FHA’s ability to better mitigate mortgage fraud by identifying loan-level and portfolio weaknesses and responding to emerging risks. The goal of the RFI is to “identify and... Read More

FHA Delinquency Falls for Second Straight Month

The performance of FHA loans continued to improve at the end of the first quarter of 2010, as the rate of past-due FHA mortgages fell for two consecutive months from January to March this year for the first time in more than a year. The serious default rate on FHA loans fell from 9.2 percent in February to 8.8 percent in March. An Inside FHA Lending analysis of Department of Housing and Urban... Read More

CBO: FHA Annual Premium Expected to Be 0.88%

With the added flexibility it would get under the FHA Reform Act passed this month by the House Financial Services Committee, the FHA is expected to raise the annual premium it charges to 88 basis points, up from the current 55 bp level. The bill, H.R. 5072, has not yet been scheduled for debate on the House floor. Information released by the House committee last week noted that along with the... Read More

Wells Takes Even Larger Share of FHA Market

Wells Fargo tilted the top-heavy FHA lending sector even more in the first quarter, increasing its market share to 15.9 percent of total FHA originations in the quarter. That share is up from just 9.2 percent at the end of 2009 and 8.3 percent from year-ago levels, when Bank of America was the top FHA lender. Wells was the largest mortgage lender in 2009 in the overall market, as well. Wells’ $11.48 billion... Read More

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