Delinquency

Browse articles from all of our Newsletters related to Delinquency.

August 11, 2017 - Inside MBS & ABS

Fraudulent Activity in the Mortgage Market May Be On the Upswing Thanks to Growing Purchase Market

The transition from a market hot with refinances to a more traditional purchase market has made the industry ripe for new and old mortgage fraud schemes, according to CoreLogic. The company’s National Fraud Risk Index reached 133 in the second quarter, a slight uptick from the first quarter, but it represents the highest it’s been since the index was introduced in 2010. That number was 122 in the fourth quarter of last year. With all of the moving parts and players involved in a purchase transaction versus a refinance, CoreLogic said, there are...


August 4, 2017 - Inside FHA/VA Lending

U.S. Announces Settlements with Contractor, Condo Complex Owner

A property management contractor for the Department of Housing and Urban Development has agreed to pay $4.3 million to resolve allegations that it billed the agency for FHA-related work it did not perform in violation of the federal False Claims Act. Cityside Management Corp. of Manchester, NH, allegedly failed to inspect the work of third-party vendors that it hired to perform termite inspections, treatments and repairs on repossessed houses in HUD’s real estate-owned inventory, as required by its contract with HUD. HUD’s inspector general investigated the case and referred it to the Department of Justice. Following the financial crisis, HUD held title to a large number of foreclosed homes acquired by borrowers with FHA financing. HUD contracted with various field service managers, including Cityside, to prepare the REO properties for resale. According to the Office of the U.S. Attorney for the ...


August 4, 2017 - Inside FHA/VA Lending

CA Wholesaler Unveils PACE Guidelines for FHA, VA Products

NewLeaf Wholesale has announced Property Assessed Clean Energy (PACE) guidelines for its FHA and VA mortgage products. PACE financing allows homeowners to retrofit their homes to make them more energy-efficient. The homeowner pays the loan as part of their property tax bill. In some states, PACE liens have superior status over all other liens, including a mortgage loan. A PACE assessment is a debt of property, where the obligation is tied to the property as opposed to the property owner. Hence, when the property is sold the new owner assumes the PACE lien. Last year, the FHA and VA issued guidance for approving purchase and refinance of mortgaged properties with PACE liens provided certain requirements are met. One requirement is that past due PACE loan amounts retain a first-lien position and this has raised some concern among industry groups that are opposed to ...


August 4, 2017 - Inside FHA/VA Lending

USMI Urges CFPB to Include Fed Agencies in ATR/QM Assessment

The private mortgage insurance industry urged the Consumer Financial Protection Bureau this week to consider including the qualified-mortgage standards of the FHA, VA and the U.S. Department of Agriculture in its assessment of the ability-to-repay/QM rule. In a comment letter, industry trade group U.S. Mortgage Insurers said it would be impossible to perform a full assessment of the ATR/QM rule without considering the different federal agency QM rules. If it does not expand the scope of its assessment, the CFPB should at least consider the impact the rules have on consumers in relation to the agency QM rules. In May, the CFPB notified stakeholders of its plan to evaluate the effectiveness of the ATR/QM rule in terms of its benefits and costs. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which established new standards for mortgage lending, including requiring lenders to assess consumers’ ability to repay. The statute also established a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement.


August 4, 2017 - Inside MBS & ABS

Fannie Reports 18 Percent Profit Increase in 2Q17 While Freddie Posts 25 Percent Decline

This week, the government-sponsored enterprises reported combined earnings of $4.86 billion in the second quarter, which was down 2.4 percent from the first three months of the year. The two GSEs’ fortunes went in opposite directions: Fannie’s net income rose 15.4 percent from the first quarter while Freddie’s was down 24.7 percent. Fannie CEO Tim Mayopoulos said...


July 28, 2017 - Inside Mortgage Trends

Some Loan Mods Have No Effect on Default

Mortgage principal reductions that left short-term payments unchanged had no effect on default or consumption for underwater borrowers, according to a new study from the Harvard Joint Center for Housing. Authors Peter Ganong and Pascal Noel believe the findings are significant in the design of loan modification programs – a key question for policymakers in their attempt to help struggling borrowers remain in their homes. The policy debate hinged on the effect of long-term debt ...


July 28, 2017 - Inside MBS & ABS

CMBS Conduit/Fusion Loan Delinquencies Up In June; Multifamily Sees Largest Increase

Loans collateralized by multifamily properties experienced the biggest increase in the delinquency rate among commercial property types during the month of June, rising 133 basis points to 4.10 percent, according to a new CMBS report from Moody’s Investors Service. But it may not be as bad, sector-wise, as it appears at first glance. “The difference was due mainly to two newly delinquent loans, both multifamily portfolios in the MLMT 2007-C1 transaction,” explained Kevin Fagan, a vice president and senior analyst with the ratings service. “Assuming these loans were current, the multifamily delinquency rate for June would be 2.57 percent.” Delinquency rates increased...


July 21, 2017 - Inside FHA/VA Lending

Millennials Seeking to Buy Homes In Affordable Markets, Data Show

Affordability and job availability are driving millennials to seek homes in more affordable markets, particularly in the upper Midwest, according to Ellie Mae data for the month of May. Ellie Mae’s Millennial Tracker, which monitors millennial mortgage applications during specific times, found that the higher percentages of loans made to millennial borrowers are in Hutchinson and Austin, MN, and Wahpeton and Williston, ND. Anniston-Oxford-Jacksonville, AL, rounded out the top-five markets. Ellie Mae defines millennials as applicants born between 1980 and 1999. Data showed that 48 percent of millennial borrowers who closed loans in May were single. In Hutchinson, for example, the majority of borrowers were single men. “This suggests millennials may be embracing homeownership in these areas for reasons other than what we have historically seen, which was family formation,” explained ...


July 21, 2017 - Inside FHA/VA Lending

MRB Suspends Lender’s Authority To Originate, Service FHA Loans

The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...


July 21, 2017 - Inside FHA/VA Lending

HUD Note Sales Program Operating With No Formal Procedures, Says IG

An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...


July 21, 2017 - Inside FHA/VA Lending

VA Still Gaining Ground in Growing Ginnie MBS Servicing Portfolio

The VA home loan guaranty program continued to grow faster than the FHA program during the second quarter of 2017, according to a new analysis and servicer ranking by Inside FHA/VA Lending. At the end of June, Ginnie Mae mortgage-backed securities pools included $548.04 billion of VA loans, a 3.3 percent increase over the previous quarter. Compared to a year ago, the volume of VA loans was up a hefty 15.6 percent. The $1.055 trillion of FHA loans in outstanding Ginnie MBS was still nearly twice the volume of VA loans. But the FHA total was up a more subdued 1.8 percent from March and by 5.4 percent from a year ago. One reason the VA market grows somewhat faster than the FHA is that it loses fewer loans to default. For starters, the VA delinquency rate is lower – 3.03 percent in the second quarter of 2017 vs. 5.52 percent for FHA. Over the past three and a half years, the ... [ Charts]


July 14, 2017 - Inside Mortgage Trends

Consumers’ Average Credit Score Hits Record High

The national average credit score tracked by Fair Isaac (FICO) recently reached a record high in April: 700. And the share of consumers seeking new credit is actually declining, according to an analysis by FICO. Ethan Dornhelm, a senior principal scientist in the analytic development group at FICO, noted that the average FICO score as of April was 10 points higher than the reading in October 2006, before the financial crisis. Average scores fell to 686 in October 2009 and have ...


July 7, 2017 - Inside FHA/VA Lending

FHA Provides Additional Guidance For Using New Loan Review System

The latest issue of FHA’s Lender Insight provides additional information to lenders regarding the new Loan Review System that was launched on May 15, 2017. FHA urged lenders to keep their contact information current in FHA Connection and in the Lender Electronic Appraisal Portal so that they receive automated system notifications on time. Also, lenders should review current FHAC user access for appropriate roles, the agency added. Lenders’ in-house FHAC application coordinators are authorized to grant access to, and assign roles within, the LRS. Having the correct roles should enable users to access the system from the FHAC menu, the FHA said. In addition, the lender must take a photo of any error messages that might appear on screen before contacting the FHA Resource Center, the agency advised. Be prepared to provide the date and time of the attempted login, user ID, lender user ID and the ...


July 7, 2017 - Inside FHA/VA Lending

VRM Wins 10-Year Contract to Oversee REOs, Service VA Loans

The Department of Veterans Affairs has awarded a 10-year contract to VRM Mortgage Services to manage VA’s real estate-owned assets and service its loan portfolio. The contract requires VRM, a 10-year-old California-based real estate services contractor, to manage, market and sell VA REO properties, and provide other real estate services as well. The new contract was negotiated from a previous five-year contract that was awarded to VRM when VA consolidated both REO management and portfolio servicing into a single contract.VA has often sold conveyed properties with seller loan financing, known as vendee loans, to help keep distressed vet homeowners in their homes. Vendee lending is an arrangement whereby a buyer uses VA financing to purchase a property in the agency’s REO inventory. “Once a loan is sold under the vendee financing program, we would monitor that loan as well as ...


July 7, 2017 - Inside FHA/VA Lending

DOJ, HUD Expand FCA Scrutiny to FHA Servicing, Reverse Mortgages

Mortgage compliance experts are cautioning FHA servicers to tread carefully around loss mitigation, annual certifications and reverse mortgages, which could be a potential minefield for False Claims Act lawsuits. While FHA lenders’ exposure to FCA risk remains, the Department of Justice and the Department of Housing and Urban Development have increased their scrutiny of FHA servicing practices for potential violations, according to Phil Schulman and Krista Cooley, both partners in Mayer Brown’s Washington office. In a recent podcast, Schulman warned of increasing DOJ and HUD scrutiny of FHA servicing practices in the last 18 months, a worrisome shift from the origination side, which has seen an estimated $5 billion in settlements and penalties since 2011 for violations of the FCA and the Financial Institutions Reform, Recovery and Enforcement Act. Since 2008, mortgagees participating in ...


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