FHA & Ginnie Mae

Browse articles from all of our Newsletters related to FHA & Ginnie Mae.

May 26, 2017 - Inside FHA/VA Lending

Around the Industry

Moody’s Rates Credit Suisse FHA Securitization Transaction. Moody’s assigned investment-grade ratings to Credit Suisse’s first securitization deal in 2017 backed by seasoned re-performing and performing, fully amortizing, fixed- and adjustable-rate mortgages insured by FHA. The deal is the first FHA-insured re-performing transaction since 2010, according to the rating agency. The collateral pool is comprised of 672 first-lien, fixed-rate loans and ARMs with a weighted average updated FICO score of 614 and loan-to-value ratio of 94.2 percent. Approximately 82.4 percent of the loans in the collateral pool were previously modified. Approximately 52.8 percent of the loans have been current for at least 24 months. Another 17.3 percent of the loans have been current for more than 12 months. Comments Sought on Various Information Collection Proposals. The Department of Housing and ...


May 26, 2017 - Inside FHA/VA Lending

VA Clarifies Use of Comparables In Appraisals of Remote Properties

Difficulty coming up with comparable home sales data in rural areas has prompted the Department of Veterans Affairs to clarify its requirements for comparable sales for VA appraisals. The VA lender handbook requires comparable sales in appraisal reports to be located as near as possible to the property. Compliance with the requirement has been particularly difficult for VA lenders in rural and certain urban areas, where properties are a good distance apart. According to VA Circular 26-17-14, VA does not set a minimum or maximum distance between properties for an appraisal but requires that “comparable sales should be located as close to the subject as practical.” In cases where obtaining data is a problem because properties may be many miles from the subject property, appraisers should explain why those comparable sales were used and how they compare and/or compete with the ...


May 26, 2017 - Inside FHA/VA Lending

HUD Criticized for Failing to Ensure Proper FHA Insurance Terminations

Poor agency oversight of voluntary lender terminations of FHA insurance on single-family home loans has resulted in increased risk for borrowers, premium overpayments and inaccurate records, according to the Department of Housing and Urban Development’s inspector general. The IG gave the department a poor grade for failing to ensure that lenders properly processed voluntary terminations of FHA coverage and disclosed to borrowers the implications of such termination. The audit report blamed HUD’s failure on its inability to detect and deter lender errors while processing voluntary terminations, causing borrowers to lose FHA-insurance protection and overpay FHA premiums. HUD’s records also were skewed because of the oversight, the report noted. IG auditors reviewed a statistical sample of 115 of the 3,690 loans that were terminated voluntarily by lenders during fiscal years 2015 and ...


May 26, 2017 - Inside FHA/VA Lending

VA LPOs School Lenders on Lending To Incapacitated Vet Borrowers

Loan processing for incompetent veterans presents significant challenges to VA lenders, requiring strict compliance with special guidance on top of the basic VA underwriting rules. One challenge is dealing with legal appointees who assist and represent veterans in legal transactions, such as applying for a mortgage loan. There are ways to determine whether a veteran is incompetent, said Mark Jamison, loan production officer (LPO) with the VA Cleveland Regional Center, during the VA Lender Conference in Kansas City, MO, last month. The Department of Veterans Affairs or a probate court can deem a veteran incompetent due to severe injury, medical conditions, mental disorders, and financial instability, he said. A mortgage lender could make a determination of incompetency if the initial purchase contract documents were signed by an attorney-in-fact, the veteran divulged the incompetency, or the ...


May 26, 2017 - Inside FHA/VA Lending

VA Explains Certificate of Eligibility Process, Entitlement Restoration

Requesting a certificate of eligibility (COE) may be just a click away but the process is not without pitfalls, cautioned a panel of VA loan production officers during an industry conference. The panelists – Maxine Henry, program analyst with the VA Central Office; Ricardo Holloway, loan production officer with the Atlanta Regional Loan Center; and Paula Jesse, assistant loan production officer with the Denver RLC – urged veterans to order their COE early in the loan-application process to avoid any hiccups. A COE verifies to the lender that the veteran/borrower is eligible for a VA loan. Ordering early would help prevent last-minute delays, said Henry. “It is a problem if the veteran is at the closing table and still does not have a COE because it was ordered just a few days prior to closing,” Henry noted. Other potential hitches are incorrect documentation or receiving a VA determination that the ...


May 26, 2017 - Inside FHA/VA Lending

FCA Action Against Lenders Slows As DOJ’s List of FHA Targets Shrinks

False Claims Act enforcement against FHA lenders appears to have slowed with no new cases being filed by the Department of Justice or referred by the Department of Housing and Urban Development’s inspector general for nearly a year. Neither agency has gone after any lender for alleged False Claims Act violations since May of last year when the Department of Justice intervened in an FCA case brought by a whistleblower against Guild Mortgage, an FHA direct endorsement lender. The complaint alleged that San Diego-based Guild Mortgage knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. The alleged violations occurred between 2006 and 2011, resulting in “tens of millions of dollars” in losses to HUD. The case is pending in federal district court in Washington, DC. Indications are the FCA cases involving FHA lenders have ...


May 26, 2017 - Inside FHA/VA Lending

Groups Oppose Proposed IT Fee, Suggest Other Funding Sources

The Mortgage Bankers Association is pushing back against a controversial budget proposal to charge FHA lenders a fee to pay for technology upgrades to help protect the Mutual Mortgage Insurance Fund. Rather than charging lenders an “administrative fee,” the MBA prefers that funding improvements to FHA’s aging information systems be done through the appropriations process. “We need to be working with [the Department of Housing and Urban Development] and Congress to find ways to fund technology upgrades and risk-management improvements,” MBA Senior Vice President Pete Mills told Inside FHA/VA Lending. The White House’s budget plan for FY 2018 incorporates verbatim a proposal by the Obama administration to charge FHA lenders an administrative fee to support the upgrades needed to reduce MMI Fund losses. According to the previous administration’s estimate, the ...


May 26, 2017 - Inside FHA/VA Lending

Housing Finance Reform Should Include FHA Lending Reform

The Financial Services Roundtable called for changes to FHA’s legal liability standards to encourage banks to make more FHA loans. Increased risks of False Claims Act enforcement and concerns about multi-million dollar penalties even for the slightest underwriting errors have forced banks to restrict their FHA lending. The top 10 FHA lenders, once dominated by banks, are now nondepository institutions, which accounted for 83 percent of FHA forward originations in the first quarter of 2017. Wells Fargo, once the leader in FHA lending, has dropped to a woeful 20th place in the rankings. “Some federal officials have expressed concern about the capacity of the government to evaluate the qualifications of lenders that are not subject to regulation by federal agencies,” the FSR said. The group also noted the credit overlays many FHA lenders have added to the loans due to ...


May 26, 2017 - Inside FHA/VA Lending

VA Production Drops in 1Q17 as Refinancing Train Loses Steam

VA originations saw a significant drop during the first three months of 2017 as refinancing continued to slow, according to an Inside FHA/VA Lending analysis of agency data. Lenders closed $42.9 billion of VA loans in the first quarter, down 28.1 percent from the previous quarter The numbers show purchase mortgages continued to drive VA originations. A slowdown in VA refinancing appears to be the key factor in the decline. Refis accounted for 27.7 percent of total VA production, down from the fourth quarter of 2016. A change in Ginnie Mae’s pooling rules aimed at discouraging churning has taken much of the steam out of the once-booming VA refi segment. The steep drop in volume ended an upward quarter-to-quarter trend in VA originations last year. Eight of the top 10 VA lenders saw huge quarter-over-quarter declines in their VA lending, with top-ranked Freedom Mortgage posting the largest ... [ Charts ]


May 26, 2017 - Inside FHA/VA Lending

MBA, NAR Identify HUD Rules for Clarification, Revision, Repeal

FHA liability standards, Property Assessed Clean Energy (PACE) lien guidance, downpayment assistance and revised condominium rules are among the regulations industry groups would like the Department of Housing and Urban Development to change or clarify. HUD is putting together an internal task force to identify regulations for review and to assess their compliance costs and regulatory burden. The department also has published a notice of the undertaking in the Federal Register with a request for comment. The comment period ends on June 14, 2017. President Trump issued an executive order in January directing federal agencies to identify at least two prior regulations for elimination for every new regulation they issue. The Mortgage Bankers Association is seeking clarification of FHA liability standards to entice banks to resume their FHA lending. The group thinks HUD’s new defect taxonomy ...


May 26, 2017 - IMFnews

A Unique Deal from Credit Suisse: A Non-Agency MBS Backed by Seasoned FHA Mortgages

Credit Suisse was a major issuer of post-crisis jumbo MBS, but hasn’t come to market with a jumbo deal since the fourth quarter of 2015.


May 26, 2017 - IMFnews

Depositories Increased Their MBS Holdings in 1Q17 – With a Boost from Large Thrifts

Much of the growth in MBS investments came from two large thrifts: Charles Schwab Bank and E*Trade Bank…


May 25, 2017 - IMFnews

Short Takes: Trump Copies Obama’s FHA Tech-Fee Idea / More Wholesale Lenders? / Home Point Deal Progresses / CHLA Presses for FHA Premium Cut / A New Director at Impac Mortgage

When’s the last time a publicly traded mortgage company was sold in a stock transaction?


May 25, 2017 - IMFnews

More MSR Offerings from Incenter

For the week, IMA rolled out $3.87 billion worth of servicing auctions.


May 25, 2017 - IMFnews

TPO Lenders Fared Slightly Better Than Retail in a Declining 1Q17 Market

The retail segment saw the biggest decline, dropping 34.6 percent to an estimated $221.0 billion.


May 24, 2017 - IMFnews

Short Takes: ABA Wants Explicit Guaranty on MBS / Does it Matter? / Trump Wants to Kill USDA Loan Program / Rep. Hensarling an Optimist but… / A Promotion at Arch MI

In the new Trump budget, the White House takes an ax to the USDA’s rural single-family housing direct loan program.


May 24, 2017 - IMFnews

The MSR Market Firms Up; More Buyers; What Could Go Wrong?

Servicing advisors Steve Harris and Mark Garland view the MSR market as improving…


May 22, 2017 - IMFnews

MBS Trading Volume Declines to Lowest Level of the Year. Meaning?

The low trading volume is an indication that liquidity is drying up, but it also reflects a decline in new agency MBS being created.


May 19, 2017 - IMFnews

REIT MBS Holdings Grew Slightly in 1Q17, but Change in CRTs Could Boost Volume

Some 91.8 percent of REIT MBS holdings ($211.95 billion) are in agency securities…


May 18, 2017 - IMFnews

All Major Loan Categories Saw Big Drops in 1Q17 Originations; GSE Market Hurt the Most

The nonprime residential market is getting more attention as the big product categories hit the skids.


May 17, 2017 - IMFnews

Short Takes: Refis Hit a Low Not Seen Since 2008 / Let’s Compare Conservatorships / HUD Chief Agrees with NAR on Condos / Dead Reverse Lender Settles / A New Branch for Castle & Cooke

This fall will mark – unless there’s divine intervention or a Kumbaya moment in Washington – the ninth anniversary of the federal takeover of Fannie and Freddie.


May 17, 2017 - IMFnews

HUD Wants Your Input on Regulatory Burden

Specifically, HUD wants to know if there are any regulations that should be repealed, replaced or modified.


May 16, 2017 - IMFnews

Nonbanks Dominate FHA Primary Market; Volume Slowed in 1Q17

The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot.


May 15, 2017 - IMFnews

Brian Montgomery Back as FHA Commissioner?

Montgomery currently serves as vice chairman of The Collingwood Group, a consultancy which he co-founded in 2009.


May 15, 2017 - IMFnews

VA Explains Characteristics of an ‘Egregious Loan’

The VA panel presented several “egregious loan” scenarios involving reviews of several mortgages from 2016 in which lenders were required to sign indemnification agreements.


May 12, 2017 - Inside FHA/VA Lending

Around the Industry

New USDA Chief. Former Georgia Governor Sonny Perdue was sworn in as Secretary of Agriculture on April 25, shortly after the Senate confirmed him. At the same time, President Trump signed an executive order creating a task force on growing housing, among other things, as an economic driver in rural communities. Improved Lender Search List Launched. The FHA last week announced an improved lender list-search capability to help the public search for FHA-approved single-family and multifamily lenders. The search engine allows search on a variety of criteria, including lender name, city, state, servicer-originator type, and recent Home Equity Conversion Mortgage or 203(k) rehabilitation mortgage experience. The Department of Housing and Urban Development’s new Lender List Search web page replaces the previous Lender List lookup page on HUD.gov. While search criteria have not ...


May 12, 2017 - Inside FHA/VA Lending

HUD Names Industry Veteran as Senior Advisor to Secretary Carson

The Department of Housing and Urban Development this week announced the appointment of industry executive Adolfo Marzol as senior advisor to HUD Secretary Ben Carson. Prior to his appointment, Marzol was a member of the board of directors of Essent Group, a private mortgage insurance company based in Radnor, PA. He resigned from the board on May 6, 2017. Marzol retired as executive vice president of Essent in 2015. During his long career, he held senior posts at Fannie Mae, including executive vice president and chief credit officer. He left the government-sponsored enterprise in 2004. Prior to his stint with Fannie, Marzol worked at Chase Manhattan Mortgage, which is now a part of JPMorgan Chase. HUD noted that Marzol will advise Carson “on matters related to mortgage finance.” An experienced professional, his expertise lies in housing finance reform. “His knowledge of ...


May 12, 2017 - Inside FHA/VA Lending

Preparations for LRS Intensifies as May 15 Effective Date Approaches

With only days to go before the implementation of its new Loan Review System, the FHA is encouraging lenders to take a few more steps to ensure smooth transition to the new system. The LRS will go live on May 15, 2017, as the new electronic platform for FHA’s Title II single-family, quality-control processes. Lenders will use the LRS to interact with FHA during post-endorsement loan reviews, direct endorsement authority test cases, lender monitoring reviews and lender self-reporting of fraud and other material findings. Findings will be communicated through the system’s defect taxonomy, which provides a streamlined method of identifying and capturing information about defects uncovered during individual loan reviews. In its latest guidance, the FHA instructs lenders to check access to FHA Connection for any potential glitches. All users access the LRS through FHA Connection via the ...


May 12, 2017 - Inside FHA/VA Lending

FY 17 Spending Bill Passed, FHA, Ginnie Mae Budgets Unchanged

Appropriation levels for FHA and Ginnie Mae from the previous fiscal year were unchanged in the FY 2017 omnibus spending bill, which President Trump signed into law on May 5. The bill, which passed the House by a 309-118 vote and the Senate by a 79-18 vote on May 4, will fund the federal government through the rest of the fiscal year ending Sept. 30, 2017. Among other things, the bill allocates $400 billion to single-family guarantee commitments under the FHA Mutual Mortgage Insurance Fund, and provides $130 million for administrative contract expenses. In addition, the budget provides an additional $30 million if guaranteed loan commitments exceed $200 billion. The agreement also sets aside up to $30 billion for FHA multifamily and specialized loan guarantees during FY 2017. A total of $55 million was set aside for housing counseling programs, $65.3 million for fair housing activities, and $4 million to ...


May 12, 2017 - Inside FHA/VA Lending

PennyMac Now Allows Equifax’s VOE in Lieu of Tax Transcripts

PennyMac has announced that, effective immediately, for FHA, VA, Fannie Mae and Freddie Mac transactions, lenders may provide Equifax’s The Work Number verification of employment, or a written VOE from an equivalent income-verification company in lieu of tax transcripts for salaried borrowers. The Work Number is a user-paid VOE database acquired by Equifax in February 2007. The written VOE must have full income figures supporting the qualifying income, said PennyMac. For all loans closed on or after June 15, 2017, the 2016 tax transcript will be required, unless the file contains evidence an extension was filed along with a copy of the Internal Revenue Service notice for 2016 showing “no record of return filed.” For all loans closed on or after Dec. 15, 2017, 2016 tax returns and tax transcripts will be required. PennyMac reminded lenders that its underwriting system cannot respond to ...


May 12, 2017 - Inside FHA/VA Lending

VA Instructs Lenders on Completing Streamline Refinance Worksheet

The Department of Veterans Affairs has issued guidance clarifying its requirements for completing the Interest Rate Reduction Refinance Loan Worksheet. The guidance is effective for all IRRRL applications originated on or after July 2, 2017. The VA said it has received many inquiries from lenders regarding the proper completion of IRRRL Worksheet (VA Form 26-8923) since the implementation of the TRID-LE and CD (Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Loan Estimate and Closing Disclosure.) The guidance clarifies and establishes VA policy regarding the following: Amount of the existing allowable loan balance (Line 1); Principal reduction from veteran (Line 2); Maximum allowable discount points (Line 5); Maximum allowable closing costs (Line 8); Maximum allowable closing costs (Line 11); and Maximum loan amount (Line 18). VA said it understands the ...


May 12, 2017 - Inside FHA/VA Lending

VA Clarifies QM Safe Harbor Rules For Streamlined Refinancings

The Department of Veterans Affairs’ interim final rule on qualified mortgages (QM) implements the Dodd-Frank provision requiring creditors to make a reasonable and good faith determination that the borrower has a reasonable ability to repay the loan. The VA interim final rule defines QM to mean any loan that the agency guarantees, insures or originates. However, certain limitations apply to VA’s Interest Rate Reduction Refinance Loans (IRRRLs) in the rule’s guidance for “safe harbor.” Under the safe harbor requirements for an IRRRL, the loan being refinanced must have been originated at least six months before the new loan’s closing, and six payments must have been made. In addition, the veteran should not have been more than 30 days past due during the six months preceding the new loan’s closing. The QM rule’s six-month seasoning requirement, however, inadvertently created an ...


May 12, 2017 - Inside FHA/VA Lending

VA Explains Characteristics of an ‘Egregious Loan,’ Discusses Cases

What is an “egregious” VA mortgage loan? Panelists at last month’s VA Lending Conference in Kansas City, MO, helped shed light on such loans by describing them as flawed and in violation of VA requirements. “But there’s more,” said Greg Nelms, VA chief of loan policy. Unstable income and use of active-duty income when that income will be extinguished within one year could taint a VA loan and make it egregious, said Nelms. High debt-to-income ratio, residual income that is below VA requirements and failure to consider a spouse’s debts or credit in a community-property state also could have an adverse effect on a VA loan, he added. The panel presented several “egregious loan” scenarios involving reviews of several mortgages from 2016 in which lenders were required to sign indemnification agreements. The first example consisted of a VA home loan for $102,047, which closed in ...


May 12, 2017 - Inside FHA/VA Lending

Nonbanks Dominate FHA Primary Market; Volume Slowed in 1Q17

Nonbank lenders far out-produced depository institutions in originating FHA mortgages during the first quarter of 2017. A new Inside FHA/VA Lending analysis reveals that nonbank lenders produced over 83 percent of FHA forward loans endorsed during the first quarter. With over 8,000 entities listed as originators and sponsors in FHA loan-level data, the overwhelming majority of them were independent mortgage banks, mortgage brokers and other nonbank lenders. The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot. One sign of the overwhelming fragmentation in the FHA primary market is the fact that these three lenders accounted for just 11.3 percent of first-quarter endorsements. The largest depository originator of FHA loans was PrimeLending, an affiliate of PlainsCapital Bank. It ranked 15th in production with a ... [charts ]


May 11, 2017 - IMFnews

Servicing Sales Market Looking Much Stronger

The MSR market is in a good place now, said MountainView’s David Bennett.


May 11, 2017 - IMFnews

Private Mortgage Insurers Lost (Some) Ground to FHA in 1Q17

The key factor for the greater MI penetration was the relatively stronger performance of purchase-mortgage lending compared to refinance activity…


May 9, 2017 - IMFnews

Former Fannie Mae, MI Official Adolfo Marzol Named Senior Advisor to HUD Secretary

During his long career in mortgage finance, Marzol held senior posts at Fannie Mae where he served as executive vice president and chief credit officer...


May 9, 2017 - IMFnews

Short Takes: Pence Economist and GSE Expert Calabria Cancels Speech / Former OCC Chief Eugene Ludwig Pinch Hits / FHFA Notes Chattel Risks / A Sweet Deal for Redwood / Irving Mayor Gets HUD Post

The FHFA wants the GSEs to provide liquidity to the trailer home market but there are risks...


May 9, 2017 - IMFnews

It’s Time for the Fed to Scale Back its MBS Holdings, Former Fannie Economist Says

The former Fannie Mae economist suggested the Fed should decide to have a measured reduction in its MBS holdings…


May 8, 2017 - IMFnews

Phoenix Selling Almost $5 Billion of Servicing Rights

The company that owns the portfolio was described in the offering circular only as an “experienced seller.”


May 5, 2017 - IMFnews

Ginnie Lifts April’s Agency MBS Production Number, but Volume Hardly Budges

Purchase loans accounted for 57.9 percent of April issuance for all three agencies, the highest penetration since September 2015…


May 2, 2017 - IMFnews

FHA/VA Default Rates Down in Early 2017, Some Sharply

The number of FHA loans 30-60 days past due declined by 28.4 percent, lowering the delinquency rate by 1.51 percentage points…


April 28, 2017 - Inside FHA/VA Lending

Around the Industry

EAD Portal Suspended for System Maintenance. The Electronic Appraisal Delivery (EAD) portal used by FHA lenders to submit appraisals to the agency will be on hiatus for much-needed maintenance work and a major upgrade beginning at 10 p.m., May 5, until 2 a.m., May 8, 2017. No appraisal submissions will be accepted via the EAD portal or EAD direct integration because both systems will be unable to make a connection, said the Department of Housing and Urban Development. FHA Credit Underwriter Training. The HUD Atlanta Homeownership Center is hosting on-site training on FHA credit underwriting at the agency’s San Juan Field Office in San Juan, Puerto Rico, on May 16, from 8:30 a.m. to 4 p.m., EST. The training is free. It will provide an overview of FHA underwriting procedures and address several industry-related frequently asked questions. The training also will look at ...


April 28, 2017 - Inside FHA/VA Lending

Trump Nominates Former Housing Official Patenaude as HUD DepSec

President Trump Friday morning signaled his intent to nominate former regulator Pamela Patenaude to be the next deputy secretary of the Department of Housing and Urban Development. According to a bio listed on the White House website, Patenaude is president of the J. Ronald Terwilliger Foundation for Housing America’s Families. She also served as HUD assistant secretary for community, planning and development during the George W. Bush administration. Patenaude’ s nomination had been expected for some time. She is expected to play a key role in shaping housing policy in the new administration and brings to the table a depth of knowledge about the industry. HUD Secretary Ben Carson was a career brain surgeon with little in the way of housing and mortgage experience. Meanwhile, industry lobbyists contend the White House continues to vet candidates for two other ...


April 28, 2017 - Inside FHA/VA Lending

Millions of Disabled Vets Unware of VA Home Loan Benefit, Experts Say

Millions of disabled post-9/11 veterans may qualify for a VA-guaranteed home mortgage but the majority are not taking advantage of the program, according to a new report from American Financing. The VA loan is great for injured veterans exiting the military but many are either unaware or uninformed, said Greg Vogel, manager of American Financing in Aurora, CO. Active-duty servicemembers and retired military are entitled to VA housing benefits, including an agency guarantee on their mortgage in lieu of mortgage insurance and no downpayment. A first-time VA borrower pays a 2.15 percent funding fee. Borrowers with a service-connected disability are exempt from paying the fee. “You would expect many of our injured warriors would take advantage of this great loan but that’s not what the numbers indicate,” said Vogel, who left the Army as a disabled vet Tim Byers, a mortgage analyst at ...


April 28, 2017 - Inside FHA/VA Lending

Federal Shutdown or Not, No Major Disruption Anticipated for FHA

As of press time, Congress passed a one-week stopgap spending measure to keep the government open through May 5, averting a looming government shutdown. The House passed H.J. Res. 99 by a vote of 373 to 30. The continuing resolution has been sent to President Trump. The continuing resolution provides lawmakers sufficient time to negotiate an omnibus spending bill. The previous spending bill was scheduled to expire at midnight, April 28, which would have resulted in a government shutdown similar to the one that paralyzed the federal government in 2013. A shutdown can cause grief for sellers and homebuyers and severely delay processing of mortgage loans if lenders cannot verify a borrower’s tax data or Social Security number. This time, however, the FHA and VA are prepared for such an eventuality, said industry observers. A 16-day government shutdown in October 2013 sent millions of ...


April 28, 2017 - Inside FHA/VA Lending

VA Issues New Loss-Mitigation Option to Help Vets Retain Homes

The Department of Veterans Affairs has issued new guidelines and instructions for modifying VA-guaranteed mortgages in lieu of previous guidance regarding the agency’s Home Affordable Modification Program (HAMP). VA has a long-standing policy of encouraging servicers to work with borrowers to explore all reasonable options to help them keep their home or reduce losses through loss mitigation. The agency requires lenders to consider VA-guaranteed loans for a VA Affordable modification (VAAM) when traditional home-retention options are not feasible. A VAAM allows a new monthly, fixed-rate mortgage payment no greater than 31 percent of the borrower’s monthly gross income. It can cover principal, interest, property taxes, insurance and condominium or homeowner association fees The rate must not exceed the most recent Freddie Mac benchmark rate for ...


April 28, 2017 - Inside FHA/VA Lending

Extra Income, Loan Payoff Leading Reasons for Taking Out HECM Loan

The most common motivation for borrowers (and nonborrowers) in opting for a reverse mortgage was “to gain extra income for everyday expenses” and “paying off mortgage debt,” according to an Ohio State University study on reverse mortgage motivations and outcomes. Published in the latest issue of the Department of Housing and Urban Development’s Cityscape: A Journal of Policy Development and Research, the study said both motivations reflect previous findings that reverse mortgage borrowers are likely to be “house rich” and cash poor.” The study used survey information collected as part of the Aging in Place (AIP) study, which looked at borrower motivations for seeking a Home Equity Conversion Mortgage as well as reasons for not getting one. The primary data set consisted of 1,761 senior households that received counseling for a HECM loan between 2006 and 2011 and responded to the ...


April 28, 2017 - Inside FHA/VA Lending

VA Issues Guidance for Recording Fees, Charges on TRID-CD Form

The Department of Veterans Affairs has issued guidance regarding documentation of allowable fees and charges under the Consumer Financial Protection Bureau’s Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Disclosure Closing Disclosure, or TRID-CD form. Under the guidance, VA lenders must document all allowable fees and charges assessed against the borrower as well as any lender and seller credits on the TRID-CD. VA now requires documentation because it no longer accepts a separate, itemized list of credits and charges, as previously allowed with the HUD-1 form. In completing the closing-cost section of the TRID-CD, fees charged to the veteran must be listed in the “Borrower Paid” column. Lender credits should be listed in the “Paid by Others” column, the agency said. Closing costs that are paid for by either the seller or the lender must be placed in either the ...


April 28, 2017 - Inside FHA/VA Lending

VA Seeks Public Input on Ways to Make VA Loans More Competitive

The VA Home Loan Guaranty Service is revisiting agency rules on allowable fees and charges veterans pay to obtain a VA loan for possible changes. VA is seeking comments on a proposed rule that would ease current restrictions to put borrowers in a better position to bargain during negotiations for a home purchase. While the current rule continues to protect veterans from incurring unreasonable closing costs as originally intended, some veterans and their representatives have complained that the restrictions weaken their ability to negotiate with sellers and lenders. Compared with a conventional purchase-loan transaction, sellers and lenders find it more difficult to deal with a borrower with a VA loan because they end up bearing many of the customary fees and charges, the VA explained. “The restrictions on fees and charges puts borrowers at a bargaining disadvantage against ...


Poll

Should any GSE reform bill from Congress be based on the concept of preserving Fannie Mae and Mac and their existing operations?

Yes.
No.
GSE reform won’t happen in my life time.

vote to see results