FHA Origination

Browse articles from all of our Newsletters related to FHA Origination.

September 21, 2018 - Inside FHA/VA Lending

DASP Note Sales Result in Lower Losses than Conveyance Claims

Loss rates for notes sold in the Department of Housing and Urban Development’s distressed asset sales program are lower than those for notes that pass through the traditional conveyance claim process, according to HUD’s inspector general. An IG audit found that the DASP loss rate was more than 3 percentage points lower than the loss rate of similar conveyance notes. The IG took into account the losses for actual DASP sales and real estate-owned conveyance claims during the same audit period, the IG said. Ultimately, the DASP program saved the FHA insurance fund more money than the conveyance process, the report concluded. The FHA Office of Housing conducts mortgage loan sales under the Single Family Loan Sale Initiative, and most distressed notes are sold through DASP. The initiative aims to maximize recoveries to the ...


September 21, 2018 - Inside FHA/VA Lending

FHA Delinquency Rates Decline Significantly in August from July

The delinquency rates on the approximately 7.9 million FHA loans outstanding fell by 20.7 basis points in August from the previous month, according to an Inside FHA/VA Lending analysis of FHA data. About 11.24 percent of FHA loans were in various stages of delinquency at the end of August. An estimated 4.73 percent of active FHA loans were 30-60 days past due while 3.90 percent were 90-plus days seriously delinquent at midpoint of the third quarter. FHA loans that were 60 to 90 days delinquent accounted for 1.56 percent of FHA loans outstanding while 1.05 percent of loans were in foreclosure. Texas, which accounted for 805,535 of total FHA loans being serviced, reported 11.4 percent of the loans as delinquent or in foreclosure. Second-place California showed a 7.39 percent delinquency/foreclosure rate overall. The state’s foreclosure rate was at a very low 0.53 percent. New Jersey and Louisiana ... [Chart]


September 21, 2018 - Inside FHA/VA Lending

September Issuance of FHA Final Condominium Reforms Unlikely

It looks like the Department of Housing and Urban Development will not be able meet its September target date for rolling out its long-awaited FHA condominium reform rule. Such is the consensus among stakeholders whose hopes were raised when HUD Secretary Ben Carson told the House Financial Services Committee in June that he would be issuing the rule this month. “HUD and the Office of Information and Regulatory Affairs (within the Office of Management and Budget) want to release the rules with the updated Single Family Handbook and they are still working on that,” said a real estate industry executive. He added that despite what Carson said at the committee hearing, “September is not likely for a release.” As of press time, the final condo reform rule had not yet been delivered for OMB review, a process that in the past has taken months to complete. In contrast, it took about a ...


September 21, 2018 - Inside FHA/VA Lending

Government Share of Originations Down Slightly in Second Quarter

Originations of government-insured mortgages rose 11.2 percent from the first to the second quarter of 2018, according to Inside Mortgage Finance estimates. That increase was slightly lower than the 17.1 percent gain in total first-lien originations over that period. The big winner for the second quarter was the jumbo sector, where loan volume surged 33.5 percent from the first three months of the year. On a year-to-date basis, government lending was down 12.6 percent from the first half of 2017. This reflects the steep decline in refinance lending in general, which affected FHA/VA production significantly. Jumbo lending was also down, by 6.6 percent, from the first six months of last year, but the conventional-conforming market saw a 4.2 percent gain at the midway point in 2018. FHA/VA loans accounted for 22.8 percent of first-lien originations in the first half of 2018. The government share for all of last year was ... [Chart]


September 7, 2018 - Inside FHA/VA Lending

Deloitte Settles Allegations of Sloppy Audits of TBW Financials

Big Four accounting firm Deloitte has paid $149.5 million to the federal government to settle allegations of misconduct in connection with its role as the independent outside auditor of defunct FHA lender Taylor, Bean & Whitaker. The settlement amount includes $115 million in restitution paid to the Department of Housing and Urban Development on Aug. 13, 2018, according to the HUD inspector general. The rest of the payment went to the Department of Justice, which brought the charges on behalf of the government. Deloitte admitted neither to any liability nor to wrongdoing. TBW was an FHA direct endorsement lender and a Ginnie Mae-approved mortgage-backed securities issuer and servicer. It originated, underwrote, acquired and sold mortgages to Freddie Mac and other investors, which used the loans to support MBS issuance or held them as investments. In its heyday, TBW was one of the ...


September 7, 2018 - Inside FHA/VA Lending

Collection of Post-Payment Interest Gets Wells Fargo Bank in Trouble

A federal district court in San Francisco preliminarily approved a $30 million class-action settlement resolving allegations that Wells Fargo Bank improperly collected post-payment interest on FHA-insured mortgages without notice to the borrowers. The U.S. District Court for the Northern District of California granted preliminary approval of the settlement on Aug. 22. Class members include plaintiff Vana Fowler and other borrowers who had an FHA loan originated between June 1, 1996, and Jan. 20, 2015. Plaintiffs allege that Wells Fargo continued to collect interest on FHA loans they had already fully repaid without sending them proper notice. HUD allows lenders to collect interest if the borrower repays the full principal on his or her FHA loan after the first of the month. This means that banks can still collect interest through the end of the month even though the ...


September 7, 2018 - Inside FHA/VA Lending

GNMA MBS Issuance Nudges Higher in August, Trails 2017

Ginnie Mae issuers produced $36.68 billion of new single-family mortgage-backed securities last month, a modest 5.0 percent gain from July, according to a new Inside FHA/VA Lending analysis and ranking. Through the first eight months of the year, Ginnie issuance was down 11.0 percent from the same period in 2017. The MBS figures do not include FHA home-equity conversion mortgages, and loan amounts are truncated to the lowest $1,000. Purchase mortgages accounted for 75.6 percent of new issuance in August, although volume was up just 1.9 percent from July’s level. On a year-to-date basis, the purchase-mortgage share rose from 65.7 percent in 2017 to 70.0 percent for the first eight months of this year. Total volume, however, was down 5.1 percent. The refinance market has been more wobbly. As of the end of August, refi volume totaled $65.87 billion, down 26.2 percent from the ... [Chart]


August 24, 2018 - Inside FHA/VA Lending

Around the Industry

Michael Bright Clears First Hurdle to Becoming President of GNMA. The Senate Committee on Banking, Housing and Urban Affairs this week voted to confirm Michael Bright as president of Ginnie Mae. Bright’s confirmation is broadly positive for housing, said Jaret Seiberg, financial services and housing policy analyst for Cowen Washington Research Group. Bright is a former staffer for Sen. Bob Corker, R-TN, and has a history of working well with Republicans and Democrats, said Seiberg. In addition, he has worked closely with Sen. Elizabeth Warren in cracking down on loan churning, he added. The Mortgage Bankers Association welcomed the news. “Mr. Bright would bring significant experience within the mortgage industry and on Capitol Hill to the role of Ginnie Mae president,” said Bill Kilmer, the group’s chief lobbyist. “He has demonstrated a commitment to bipartisan solutions regarding complex ...


August 24, 2018 - Inside FHA/VA Lending

Overall FHA Delinquency Rate Down in July; 90 Days Past Due at 4%

Approximately 11.5 percent of FHA single-family mortgages were in some stages of delinquency in July, 26 basis points down from the previous month, according to an Inside FHA/VA Lending analysis of FHA delinquency rates. At the end of July, FHA servicers were servicing 7,901,090 FHA loans, with top servicer Wells Fargo accounting for 19.2 percent. The share of FHA mortgages that were 30-59 days past due, which is considered early-stage delinquency, was 4.8 percent at the end of July. The share of FHA loans 60-89 days delinquent was 1.6 percent while the share of seriously delinquent loans in July was 4.02 percent. ... [Chart]


August 24, 2018 - Inside FHA/VA Lending

Nothing to Report, Says FHA Even As Lenders Seek Certainty, Clarity

It has been more than three years since FHA introduced a new streamlined process of identifying loan defects and their severity to minimize or avoid enforcement action and hefty penalties under the False Claims Act. Despite calls by the mortgage industry to improve and clarify the process – the Single-Family Loan Quality Assessment methodology or “defect taxonomy” – the FHA has yet to make a move to meet industry demands for more detailed defect taxonomy. Contacted for an update on the defect taxonomy, a Housing and Urban Development spokesperson said simply, “Nothing to report on this.” An outgrowth of lender concern over the government’s indiscriminate use of the FCA to prosecute mortgage fraud and recover FHA losses, the defect taxonomy establishes nine categories of loan defects in loans it endorses. The nine defect categories replaced the 99 loan defect codes that were ...


August 24, 2018 - Inside FHA/VA Lending

MBA Requests Clarification on DACA Lending, Handbook Issues

The Mortgage Bankers Association is seeking clarification from FHA on a number of issues in the agency’s Single Family Housing Policy Handbook following Brian Montgomery’s swear-in as FHA commissioner. The MBA identified seven priority issues which lenders say need further guidance. The issues include the following: Deferred Action for Childhood Arrivals and employment authorization documents; Third-party underwriting and vendor verification of borrower income, employment, and assets; Student loan debt calculation; Rent below fair market; Minimum decision credit scores; Contract for deed; and Community transfer fees. In September 2017, President Trump rescinded DACA, a special program created by the Obama administration to provide temporary legal status and work permits to underage persons who entered the U.S. illegally until the government decides ...


August 24, 2018 - Inside FHA/VA Lending

FHA Forward Production Increases, HECM Challenges Remain in 2Q

FHA forward originations increased modestly in the second quarter while Home Equity Conversion Mortgage production hit its lowest three-month volume since late 2012. Forward endorsements totaled $51.6 billion in the second quarter, up 5.4 percent from the previous period. It was a different story, however, at midyear where volume was down 16.6 percent from the previous year. Fixed-rate mortgages accounted for the majority of FHA forwards produced from April through June, ending the quarter with $51.3 billion, up 5.1 percent from the first three months of 2018. FHA adjustable-rate mortgages posted a whopping 88.7 percent increase to end the quarter with $307.4 million. FHA purchase activity rose 19.7 percent, closing the quarter with $41.7 billion, while streamlined refinancing dropped 41.3 percent from the prior period. Conventional-to-FHA refi business also was off ... [Charts]


Poll

Who "owns" the mortgage customer that’s brought to a wholesale lender through a loan broker?

The broker. It’s his/her client.
The wholesale/table funder. They’re taking the financial risk.
The broker, but only for the first year. After that, the borrower is fair game.
Hard to answer. It’s a complicated issue.

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