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Inside FHA/VA Lending

July 23, 2010

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More Indemnification Coming, HUD Says

With expanded authority to require lenders to indemnify the Department of Housing and Urban Development for rules breaches on defaulted FHA loans, as well as a new method for reviewing claims, agency officials expect more indemnification in the coming months. Industry experts agree, noting that the influx of defaulted loans due to increased FHA lending last year will cause HUD to more closely... Read More

Significant FHA Underwriting Changes Announced

The Department of Housing and Urban Development detailed three measures that will tighten underwriting for FHA loans in an attempt to further protect the agency’s mortgage insurance fund. While the changes are aimed at borrower sectors with historically poor performance, some of the changes may only impact a small portion of the FHA’s target market. According to the notice published in the... Read More

FHA Funding Flat in 2011 Appropriations Bill

The House Appropriations Committee this week approved a fiscal 2011 funding measure for the Department of Housing and Urban Development that mostly keeps the status quo in various FHA programs. The FY 2011 appropriations bill would give HUD $72.0 million for the agency’s fair housing and equal opportunity programs, the same amount currently funded. Although the Obama administration has committed to... Read More

VA Lending Down From ’09; New Appraisal System

Mortgage lending insured by the Department of Veterans Affairs increased slightly in the second quarter, but the six-month total this year puts the program on pace to drop off a bit from the record level seen in 2009. VA lenders originated $15.3 million in mortgages in 2Q10, up 6.3 percent from the first quarter total. The six-month total of $29.7 million paces the program to nearly hit $60.0 million... Read More

FHA Changes Turn Out Positive for Brokers

The FHA’s new system for monitoring wholesale lenders – and holding them accountable for the activity of third-party originators is turning positive development for the broker community, despite the original thinking from many experts that brokers would be driven from the marketplace. FHA-approved correspondent lenders will keep their approval through 2010, but TPOs must establish relationships with FHA... Read More

FHA to Offer Early Look, Discount on HUD REOs

The FHA announced this week that it will now offer state and local governments as well as nonprofit organizations participating in the Department of Housing and Urban Development’s Neighborhood Stabilization Program an early look and a 10 percent discount on HUD’s inventory of foreclosed properties. The “First Look” initiative aims at moving empty homes off the market faster in... Read More

FHA Lender Keeps Approval Despite Red Flags

Texas lender Allied Home Mortgage has maintained its FHA approval and continued making home loans despite a path of lies, wrongdoing and possibly illegal activity, according to a new report from ProPublica, a public interest group. “The firm has left behind a trail of alleged misconduct and piecemeal government sanctions spanning at least 18 states and seven years,” the report said. “Yet Allied chugs along... Read More

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