Cart

Inside FHA/VA Lending

June 22, 2012

View Archived Issues

Policy Threatens Streamline Refi Program

A new secondary market policy announced by Wells Fargo last week is sending ripples across the industry and could potentially cause the FHA Streamline Refinance program to falter in the coming weeks. Major FHA lenders have quietly adopted similar policies as FHA refinance volume, fueled by increased streamline refi business, more than doubled over the week. Wells Fargo raised eyebrows by announcing it will do FHA streamline refis only on loans in its own servicing portfolio and will not accept streamline refis from third-party originators. The top FHA producer in the first quarter of 2012 said focusing on ... Read More

New Overlay Guidance in the Works, Says Galante

FHA lenders may expect new guidance on the use of credit overlays as the Department of Housing and Urban Development expressed concern over lenders imposing additional underwriting beyond what FHA already requires. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said there is concern about FHA lenders raising credit score requirements much higher than the agency requires to shield themselves from future liability. She said many lenders are requiring credit scores of 700 or higher, way above the traditional FHA borrower score of 640-650 – a practice that is not prohibited but ... Read More

HUD Mulls 203(k) Expansion for REO Properties

The Department of Housing and Urban Development is looking for ways to expand the FHA’s home renovation program to accommodate real estate-owned properties even as the mortgage industry urged HUD to open the program to investors. Acting FHA Commissioner and Assistant Secretary for Housing Carol Galante said HUD is considering use of the 203(k) Rehabilitation Loan program to ease FHA’s huge inventory of foreclosed properties. HUD’s REO inventory has dropped from a peak of 68,997 foreclosed properties in March 2011 to 29,692 in February. As of May 27, the inventory was ... Read More

Disputed Debt Policy Lifted, New Guidance Coming

Widespread objection by stakeholders has forced the Department of Housing and Urban Development to rescind a new lending policy regarding borrowers with disputed debt and unresolved collection issues and to consider clarifying the issue in future guidance. The policy, announced along with other FHA underwriting changes in February, was initially to take effect on April 1. However, industry concern about fewer borrowers qualifying for an FHA-insured loan caused HUD to extend the policy’s effective date to July 1 to reexamine and gather more information from stakeholders. HUD announced its decision to ... Read More

Condo Rule Reforms Still A Long Way Off

Advocates for FHA condominium rule changes may have to wait a bit longer for a proposed rule currently in development, according to Acting FHA Commissioner Carol Galante. Galante said the Department of Housing and Urban Development is reviewing the current FHA condo rules for future revisions that would remove the roadblock to buyers, sellers and lenders. A proposed rule is in the works but it could take considerably more time to finish and finalize it, she said without providing a timetable. In the meantime, new guidance is on the way to ... Read More

VA Urged to Implement 203(k) Rehab Pilot Plan

The real estate industry called on the Department of Veterans Affairs to offer an existing pilot program on property rehabilitation similar to the FHA’s 203(k) program in all markets, especially those with a high veteran population. In a letter, the National Association of Realtors asked that the Veterans Renovation Pilot Program be administered through the VA Loan Guaranty Program, allowing veterans to purchase distressed property for repair, alteration, renovation and improvement. The VA pilot resembles the FHA’s “fixer-upper” program for buyers interested in purchasing ... Read More

Virginia Court Upholds Face-to-Face Meeting Rule

FHA lenders and servicers commencing foreclosure on FHA-insured mortgage loans in the Commonwealth of Virginia must first meet with the borrower personally before proceeding or risk voidance of the foreclosure sale, the state supreme court ruled recently. Because of the decision by the Supreme Court of Virginia, the state has joined a growing list of states that require a face-to-face meeting between a mortgage lender and a borrower before initiating foreclosure proceedings on an FHA-insured mortgage loan. In Mathews v. PHH Mortgage Corp., the court upheld ... Read More

FHA Jumbo Production Rises in First Quarter 2012

FHA production of mortgages with loan amounts exceeding $417,000 rose to $4.8 billion during the first three months of 2012, according to Inside FHA Lending’s analysis of FHA data. The FHA posted a significant 21.1 percent increase in agency jumbo production from the fourth quarter of 2011, offsetting the 17.9 percent drop in production year over year. The agency’s maximum loan limit remained at $729,750 in high-cost areas while those of its competitors, Fannie Mae and Freddie Mac, were at the lower $625,500. Purchase loans accounted for 42.4 percent of FHA jumbo originations in ... [1 chart] Read More

Latest Imf News

More Imf News

Featured Data

More Featured Data

Featured Reports

More Latest Reports

Featured Poll

As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

View Results