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Inside FHA/VA Lending

May 3, 2013

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FHA Originations Down Slightly in 1Q13

Overall FHA loan production dropped a tad during the first quarter of 2013 even as refinancing volume remained elevated, according to an Inside FHA Lending analysis of agency data. FHA lenders produced a total of $63.7 billion in new FHA-insured loans during the quarter, down 0.6 percent from the previous quarter but up 27.4 percent from the same period last year. FHA streamline refinancing rose 8.4 percent to $31.0 billion in the first quarter from the prior period. That was also up a whopping 97.8 percent from the same period last year. In a new report to Congress, the ... [2 charts] Read More

FHA Claims Payments Exceed Collections, Report Shows

The FHA paid out more in claims than it had collected in premiums and note and property sales as of Sept. 30, 2012, according to the Department of Housing and Urban Development’s quarterly report to Congress on the FHA Mutual Mortgage Insurance Fund. FHA disbursed $19.5 billion at the end of the third quarter last year mostly to pay claims and booked $16.7 billion in collections, resulting in an outflow of $2.8 billion, the report stated. Cash flows from operations over the last year covered 80 percent of default losses, the report noted. Premiums collected over four quarters ending Sept. 30, 2012, totaled ... Read More

Wells Fargo to Appeal Ruling on NY FCA Case

Wells Fargo will reportedly appeal a federal judge’s decision that a $25 billion agreement Wells and four other banks made with federal agencies and 49 state attorneys general last year to settle allegations of servicing malpractices does not make the banks immune to future claims under the False Claims Act. The Feb. 12 decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia said that the landmark settlement she had approved in April 2012 does not release the from future False Claims Act claims the government may bring. Dating back to the U.S. Civil War, the FCA provides for treble damages for fraud that results in ... Read More

HUD Issues Detailed Guidance on LI Final Rule

The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ... Read More

ASF Calls for Reduced FHA/GSE Loan Limits

Wall Street has unveiled policy proposals calling for premium and guaranty fee adjustments and reduced loan limits for FHA and the government-sponsored enterprises to jump start the return of private capital to the U.S. housing market. The American Securitization Forum said the current level of government activity in the mortgage market is neither sustainable nor advisable. The government, through FHA, Fannie Mae and Freddie Mac, directly or indirectly guarantees 90 to 95 percent of new mortgage originations in the country, the trade association said. While everyone agrees the government’s role in housing should be reduced over the long term, there is ... Read More

HUD Closes Offices, Restructures Multifamily Hubs

The Department of Housing and Urban Development has announced plans to consolidate multifamily hubs nationwide and close a number of its smaller field offices. The plan would result in an estimated $61.9 million in annual costs savings for HUD after completion and affect approximately 900 of the department’s 9,300 employees. No employee will be laid off as a result of the restructuring, according to HUD Secretary Shaun Donovan. Donovan said the changes are part of a broader, long-term effort that will allow HUD to continue to deliver high-quality services by adapting modern best practices. The decision to ... Read More

FHA Lenders Liable for Restrictive Covenants

The Department of Housing and Urban Development’s Office of the Inspector General has recommended that two lenders be reviewed for potential treble damages under the False Claims Act for allowing restrictive covenants to be recorded in regard to 864 FHA-insured loans in violation of FHA regulations. CTX Mortgage Co. of Dallas, TX, and Pulte Mortgage of Englewood, CO, could be on the hook for millions of dollars if HUD agrees to accept the OIG’s recommendations, which also include reimbursements and indemnification for paid and potential future claims. Both lenders maintained that ... Read More

Around the Industry

Congress Extends MI Tax Deductibility. Congress again extended legislation ensuring the tax deductibility of mortgage insurance on purchase and refinance loans through Dec. 31, 2013. Consequently, homeowners with adjusted household incomes of $109,000 or less can continue to claim the MI tax deduction on their federal tax return retroactive to Jan. 1, 2012. With a tax deduction, qualified borrowers may be able to ... Read More

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