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Inside FHA/VA Lending

August 12, 2016

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FHA Endorsements Climb on Purchase Activity in 2Q16

FHA single-family endorsement activity saw a solid 15.0 percent increase from the first to the second quarter of 2016, but the program lost market share in the red-hot primary mortgage insurance business. The FHA endorsed a total of $61.54 billion of forward mortgages during the second quarter, according to a new Inside FHA/VA Lending analysis and ranking. That brought year-to-date production to $115.06 billion, a 9.0 percent increase over ... [Includes two data charts] Read More

VA Home Loan Guaranty Volume Up 30% in 2Q16 on Refinance Boom

Mortgage lenders originated $48.26 billion of single-family mortgages with VA home loan guaranties during the second quarter of 2016, according to agency data provided this week to Inside FHA/VA Lending. Second-quarter volume was up 30.0 percent from the first three months of the year, with the biggest increase coming in streamlined refinancing. The VA said originations of interest rate reduction loans totaled $16.50 billion in the second quarter, up 51.6 percent ... Read More

HUD IG Takes Up Premium Pricing Concerns with House Panel

The Department of Housing and Urban Development’s inspector general has taken its dispute with HUD over downpayment assistance to Congress, accusing FHA of steering borrowers to DPA programs with an illegal funding scheme. In a recent letter to House Financial Services Committee Chairman Jeb Hensarling, R-TX, HUD Inspector General David Montoya said premium pricing uncovered during an audit of an Arizona-based FHA lender violates federal law regarding ... Read More

Lapses in Communicating Loss Mit Options Result in HUD Violations

An FHA servicer’s failure to communicate in a timely manner with delinquent borrowers for potential loss mitigation options exposed troubled homeowners to the risk of losing their home, according to results of an audit by the Department of Housing and Urban Development’s inspector general. The delay also may have resulted in a violation of federal and state bankruptcy laws, the inspector general’s report noted. The audit looked into Selene Finance’s servicing of FHA loans and ... Read More

FHA Implements Modified Lender Certifications to Ease Liability Fear

Revised forms lenders must file when submitting a mortgage loan for FHA insurance became mandatory on Aug. 1, raising hope for more lender participation in the FHA single-family mortgage insurance program without fear of liability. The improved form, HUD/VA Addendum to the Universal Residential Loan Application (Form 92900-A), eliminates the requirement that lenders certify to their compliance with all FHA requirements. The FHA first proposed changes to ... Read More

DOJ, HUD-IG Investigating Alabama Bank’s FHA Lending, Underwriting

Regions Financial Corp., a $125 billion Alabama bank, has reached a preliminary settlement with the Department of Justice and the Department of Housing and Urban Development to resolve an investigation into the bank’s FHA lending practices. The reason for the investigation was not disclosed in the bank’s 10-Q filing, although Regions acknowledged that DOJ and the HUD inspector general are focusing on its FHA loan origination procedures, underwriting and ... Read More

HUD Offices Disagree on How to Process Settlement Collections

A dispute over which office within the Department of Housing and Urban Development is responsible for tracking and recording certain collections from civil fraud settlements is wreaking havoc on HUD’s accounting of collections and recoveries. In its semiannual report to Congress, HUD’s Office of the Inspector General said it might have to elevate the matter to the HUD deputy secretary for a decision as to which office is responsible for each action. The dispute ... Read More

VA Issues Funding-Fee Guidance For Loans to Vets, Reservists, NGs

The Department of Veterans Affairs has issued new guidance to clarify the loan-fee structure for VA purchase and refinance mortgages, loan assumptions and manufactured home loans. The detailed funding fees are in effect for VA loans closed on or after Nov. 22, 2011, and before Sept. 30, 2024. For first-time use of the VA housing benefit, a VA loan with a downpayment of less than 5 percent would have a funding fee of 2.15 percent for veterans and 2.40 percent for reservists ... Read More

HUD Proposes HECM Claims Be Made at 98% of Max Amount

The Department of Housing and Urban Development is seeking comment on a supplemental proposal, which would require an FHA lender to file a claim when a Home Equity Conversion Mortgage loan reaches 98 percent of the maximum claim amount. The proposal stems from another proposed rule published by HUD last May that would codify previous revisions to the HECM program and make additional changes. The proposal would provide the lender an opportunity ... Read More

Flint Lenders Must Verify Quality of Water Source for FHA Properties

The Department of Housing and Urban Development’s inspector general has urged the agency to direct FHA lenders to show documented proof that properties in Flint, MI, had a safe and potable water source at the time their FHA loans were closed and endorsed, or face indemnification. The HUD IG, in a report, said it audited the department’s oversight of FHA-insured loans in Flint in the wake of news reports of high levels of lead contamination in the city’s public water system ... Read More

Subordination to Loans with PACE Liens Yields Mixed Result for MBS

The FHA’s and VA’s acceptance of residential properties with existing senior PACE (Property Assessed Clean Energy) liens is credit positive for asset-backed securities backed by PACE assessments and could have a mixed effect on some residential mortgage-backed securities, according to a new analysis by Moody’s Investors Services. The move is expected to expand the availability of mortgage financing for purchasers of homes with PACE obligations as well as ... Read More

Around the Industry

Interest Rate for VA Streamline Modifications. Servicers initiating a trial payment plan (TPP) for a VA streamline loan modification may seek pre-approval from the Department of Veterans Affairs to complete the modification with an interest based on the approval date of the TPP instead of the interest rate at the time the modification was approved. All pre-approval requests must be submitted prior to the TPP agreement or loan modification ... [Includes three briefs] Read More

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