FHA Origination

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

September 15, 2017 - Inside FHA/VA Lending

Around the Industry

DOL’s Overtime Rule Dead – For Now. A federal district court in Texas recently struck down an Obama administration proposal that would have made millions of people eligible for overtime pay. Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas on Aug. 31 invalidated the DOL’s pending overtime regulations, which would have raised the salary threshold exemptions under the Fair Labor Standards Act. The Obama administration finalized the proposed regulations in May last year but was unable to implement them after Mazzant granted a request for injunction filed by the Plano Chamber of Commerce and 55 other business groups last November. The business entities opposed the proposed rule, which would have raised the minimum salary threshold necessary to qualify for the FLSA’s overtime exemption. The salary threshold would have increased from ...


September 15, 2017 - Inside FHA/VA Lending

FHA Announces Changes to HECM Counseling Certificates

The FHA will provide lenders that originate Home Equity Conversion Mortgage loans the option to view and print unsigned HECM counseling certificates in FHA Connection starting Sept. 18, 2017. While the lender may still take the initial loan application, the lender can only begin to process it once the counseling is complete, as evidenced by a completed HECM counseling certificate that contains signatures of both the counselor and borrower. Lenders that chose to use this option will be required to establish procedures to obtain and document authorization from the HECM borrower to access the counseling certificate in FHA Connection. In addition, lenders must certify that a borrower authorization to view the counseling certificate was obtained. Lenders must follow the guidance on processing HECM loans contained in the HUD Handbook, the FHA said. To access HECM counseling certificates, lenders will ...


September 15, 2017 - Inside FHA/VA Lending

Legal Experts Suggest Five ‘Fixes’ To Avoid Unfounded FCA Claims

Compliance attorneys are calling for legislative changes to prevent possible misuse of the False Claims Act that could result in settlements that could be financially devastating to mortgage lenders. Concerns about possible government misuse of FCA provisions are evident in the statutory qualifiers that are already embedded in the existing statute, according to a recent analysis by Krista Cooley and Laurence Platt, attorneys and partners in the Washington, DC, office of Mayer Brown. The qualifiers are in the main provision of the FCA that the Department of Justice has used against mortgage lenders and servicers, the attorneys said. The provision imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or ...


September 15, 2017 - Inside FHA/VA Lending

Trump Nominates Industry Veteran To Be the Next FHA Commissioner

The White House this week officially nominated industry veteran Brian Montgomery to be the next FHA commissioner and assistant secretary for the Department of Housing and Urban Development. In a related development, the Senate on Thursday confirmed the nomination of Pamela Pantenaude as HUD deputy secretary, three months to the day the Senate Committee on Banking, Housing and Urban Affairs approved her nomination. Montgomery, currently vice chairman of the Washington-based business-consulting firm The Collingwood Group, is no stranger to the job. He previously served as FHA commissioner/HUD assistant secretary during the second Bush administration and as acting HUD secretary in January 2009. As FHA commissioner, Montgomery lead legislative efforts to preserve the nation’s affordable rental housing stock while reducing rental-assistance costs and the cost of ...


September 1, 2017 - Inside FHA/VA Lending

Around the Industry

Ginnie Mae Spokesperson Leaves Agency. Cynthia Adcock, director of communications and congressional relations at Ginnie Mae, will no longer be with the agency effective Sept. 4, 2017. Adcock will assume similar duties and responsibilities as a director with the Federal Housing Finance Agency. Michael Huff will handle media inquiries related to Ginnie Mae and congressional matters. FHA Lenders Settle Alleged Violations of FCA, FHA Requirements. The Department of Housing and Urban Development’s Office of the Inspector General recently announced receipt of $44.3 million from separate settlements with two FHA lenders. The settlements resolve allegations of fraudulent claims and violation of FHA requirements against Financial Freedom of Austin, TX, and Prospect Mortgage of Sherman, Oaks, CA. On May 16, 2017, Financial Freedom, an FHA servicer, agreed to pay the ...


September 1, 2017 - Inside FHA/VA Lending

FHA Provides Info Sheet to Help Lenders in Their Use of the LRS

The FHA has posted a quick-reference sheet on its website to help lenders navigate the agency’s new Loan Review System. The quick-reference sheet summarizes the most important information in the LRS user manual. The LRS is an electronic platform for single-family, quality-control processes that includes post-endorsement loan reviews, direct endorsement authority test cases, lender-monitoring reviews, and lender-self-reporting of fraud and other material findings. Defect taxonomy, a key LRS component, provides a streamlined method of identifying and capturing information about loan defects uncovered through individual loan reviews. Lenders have four opportunities to respond to FHA reviews. They may access the LRS to view the results of the review in detail but they may not edit or submit responses, upload documents, manage binder requests or create self-reports. When FHA requests a ...


September 1, 2017 - Inside FHA/VA Lending

FHA Extends Indefinitely Interim Rules for Condo Project Approval

The FHA this week extended temporary rules for approving condominium projects for FHA financing indefinitely. The extension will remain in place until the condominium rulemaking process is completed, the agency said in a mortgagee letter. Temporary approval requirements were first issued in 2012 and later modified in 2015. The current temporary provisions expired on Aug. 31, 2017. Under a proposed rule issued for comment on Sept. 27, 2016, elderly condominium owners would find it easier to obtain a Home Equity Conversion Mortgage. FHA proposes to reinstate “spot condo” approvals whereby individual units are approved by FHA rather than the entire condominium project as required under current rules. Spot-condo approvals would require property recertification every three years rather than the current two-year requirements. Processing recertifications would be streamlined under the ...


September 1, 2017 - Inside FHA/VA Lending

FHA, VA Reach Lowest Delinquency Levels in 2Q17, MBA Survey Finds

The FHA and VA reached a milestone of sorts in the second quarter of 2017 when both agencies hit their lowest delinquency levels in as many years, according to the Mortgage Bankers Association’s quarterly survey of mortgage delinquencies nationwide. The FHA delinquency rate fell to 7.94 percent from 8.09 percent in the first quarter on a seasonally adjusted basis, reaching its lowest level since 1996. Also on a seasonally adjusted basis, the VA delinquency rate declined to 3.72 percent from 3.90 percent in the previous quarter, the lowest it has been since 1979. Mortgage delinquencies also decreased for conventional loans on a seasonally adjusted basis. It dropped to 3.47 percent from 4.04 percent in the first quarter on a seasonally adjusted basis. Overall, the delinquency rate for mortgage loans on single-family residential homes fell to a seasonally adjusted rate of 4.24 percent of all ...


September 1, 2017 - Inside FHA/VA Lending

HUD Operations, Enforcement at a Crawl as Staff Confirmations Stall

Several mortgagee letters issued this week may have lifted the Department of Housing and Urban Development out of the doldrums, though that can quickly change if key staff positions remain vacant for a longer period, according to industry observers. Observers say problems might arise, as two key staff positions that are crucial to the implementation and enforcement of any HUD rule remain vacant. The Trump administration’s proposed deep cuts to HUD’s FY 2018 spending bill and Republican opposition to HUD’s Affirmatively Furthering Fair Housing Rule reportedly have put a crimp on the nominations for the department’s top staff positions, observers said. Confirmations of Pamela Pantenaude as HUD deputy secretary and J. Paul Compton as HUD general counsel appear stalled on the Senate floor. The Senate Committee on Banking, Housing and Urban Affairs approved ...


September 1, 2017 - Inside FHA/VA Lending

FHA Further Clarifies New Servicing Requirements in HECM Final Rule

The FHA has issued guidance to clarify new servicing requirements in the Home Equity Conversion Mortgage final rule that will take effect on Sept. 17, 2017. The HECM final rule codifies previously issued policies as well as new policies contained in the HECM proposed rule published on May 19, 2016. The guidance provides more detail on three servicing policies contained in the HECM final rule that HUD published in the Federal Register on Jan. 19. These policy areas include default for unpaid property charges, sale of property securing a due and payable HECM, and cash-for-keys and relocation incentives. The comment period ends on Sept. 24. Specifically, the guidance clarifies when a lender must submit a due-and-payable request if a borrower is unable or unwilling to repay funds advanced by the lender to pay property charges. In addition, the guidance updates the ...


September 1, 2017 - Inside FHA/VA Lending

Borrowers Warned on Use of HECMs to Delay SS Benefits

Working past age 62 is usually a less costly way to increase a senior’s Social Security benefit than borrowing a reverse mortgage, according to the Consumer Financial Protection Bureau. In a report published last week, the CFPB warned that a strategy touted by financial consultants to seniors – borrowing a reverse mortgage loan to get more SS benefits later – could result in significant costs that may erase gains from delaying SS benefits. The strategy would require older homeowners to borrow a reverse mortgage at age 62, the minimum age a person can begin collecting SS benefits, in order to delay claiming such benefits. This means retirees would use the proceeds from a reverse mortgage to replace the money they would otherwise receive from SS in the years between 62 up to their full benefit age of 66 (for those born before 1960) and 67 (for those born after 1960), or their maximum ...


September 1, 2017 - Inside FHA/VA Lending

Fewer HECM Borrowers Expected As Program Changes Take Effect

The Department of Housing and Urban Development this week announced changes to the FHA-insured reverse mortgage program, including a 200 basis point adjustment in the upfront mortgage insurance premium that may shut out some potential borrowers. HUD officials acknowledged during a press call that changes in both the upfront MIP and the HECM principal limit factors could reduce the number of borrowers initially by as much as 20 percent. Officials estimated that there are approximately 24 million seniors with untapped equity in their homes. “Overall, it is still a very large potential market,” said one official who spoke on background. “In the last few years, we did about 45,000 to 50,000 reverse mortgages annually. The net effect of all these changes is a better and safe HECM program for seniors. We’ll just have to wait and see how it plays out.” The revisions would help stabilize the ...


September 1, 2017 - Inside FHA/VA Lending

FTHB Purchase Securitization Up in First Half of 2017, FHA Leads Pack

First-time homebuyers accounted for $170.3 billion of securitized purchase mortgages during the first half of 2017, according to an Inside FHA/VA Lending analysis of loan-level data for mortgage-backed securities issued by Ginnie mae, Fannie Mae and Freddie Mac. Purchase-mortgage origination to first-time homebuyers was up 15.7 percent year-over-year and comprised 50.3 percent of total purchase-mortgage loans securitized during the six-month period. FHA accounted for 36.8 percent ($61.4 billion) of first-time homebuyer purchase mortgages delivered into agency pools from beginning to midyear, while conventional purchase mortgages with private mortgage insurance accounted for 28.3 percent ($48.3 billion) over the same period. FHA and private MI are the two leading mortgage insurers for first-time homebuyers. Together, they have provided mortgage insurance for nearly ... [Charts]


August 18, 2017 - Inside FHA/VA Lending

No Ginnie Mae Summit in 2017, Event Moved to January 2018

Ginnie Mae will not have an annual summit this year but has rescheduled it for January 2018, according to Ginnie Mae’s new spokesperson. Michael Huff, senior advisor, congressional and stakeholder relations, said a new administration and staff departures have caused organizers to reconsider having the annual Ginnie Mae Summit this year, usually held in October. The Trump administration has yet to announce a nominee for the top job at Ginnie Mae since former president Ted Tozer left in January. David Kittle is reportedly a leading contender, but there has been no official announcement or confirmation. So far, Kittle has declined to comment. Kittle is a mortgage industry veteran who began as a loan officer and now heads his own company. He also was a top executive with the Mortgage Bankers Association and managed, among other things, the group’s political action committee. In addition, Kittle co-founded the ...


August 18, 2017 - Inside FHA/VA Lending

Wells Fargo, PHH Reach Separate Settlements to Resolve FCA Suits

Wells Fargo and PHH Mortgage have reached separate settlements with the Department of Justice and three other federal agencies to resolve alleged violations of the False Claims Act. The DOJ, Department of Housing and Urban Development, Department of Veterans Affairs and the Federal Housing Finance Agency will rake in $182 million from the settlement of lawsuits involving FHA and VA loans, as well as loans sold to Fannie Mae and Freddie Mac. Wells Fargo denied the allegations in the whistleblower lawsuit but agreed to pay $108 million to resolve the claims. It admitted to no fault or liability. Filed in 2006 and unsealed in 2011, the lawsuit alleged that the bank overcharged veteran borrowers by masking ineligible fees in order to obtain VA guarantees on certain Interest Rate Reduction Refinancing Loans, or streamlined refi mortgages. At the same time, Wells allegedly falsely certified to the VA that it ...


August 18, 2017 - Inside FHA/VA Lending

Clarity Sought on HUD Preemption Of State Statutes of Limitation

Reverse mortgage lenders are asking FHA to clarify the applicability of state statutes of limitations on collections and foreclosures involving Home Equity Conversion Mortgage loans. In a comment letter to the Department of Housing and Urban Development, the National Reverse Mortgage Lenders Association sought clarification to avoid any potential risk to the department and reverse mortgage lenders. Since federal agencies are not subject to state statutes of limitations, the NRMLA asked the FHA to confirm that HECM loans assigned to HUD are not covered by state statutes of limitations on collections and foreclosure. The trade group also requested FHA to clarify whether HECM regulations and program guidelines preempt any such state law. “Requiring mortgagees to assign loans to HUD and make certifications that such loans are and will be ...


August 18, 2017 - Inside FHA/VA Lending

FHA Originations Up, VA Down, Quicken, USAA Lead Production

FHA production increased slightly even as VA originations fell by a larger percentage in the second quarter of 2017, an analysis of the agencies’ lending activities found. FHA ended the quarter with $60.8 billion in forward mortgage endorsements, up 1.8 percent from the previous quarter. In contrast, VA originations declined by 4.9 percent over the same period, closing the second quarter with $40.8 billion. FHA and VA production typically gain share when the purchase-mortgage lending increases. For example, Inside Mortgage Finance reported that purchase mortgages comprised 71.3 percent of loans securitized in Ginnie Mae mortgage-backed securities in 2Q17, compared to 59.9 percent in Fannie Mae and Freddie Mac MBS. FHA endorsements over the first half of 2017 totaled $120.6 billion, of which $86.0 billion were purchase loans. This was up 4.8 percent from the same six-month period ... [Charts]


August 18, 2017 - Inside FHA/VA Lending

Industry Experts Favor Unified GSE, FHA/VA Servicing Policies

Simplifying and aligning the default servicing policies of the conventional conforming and the government-backed mortgage markets would better serve the mortgage industry and homeowners, according to industry experts. In a recent discussion on how regulatory burden and high servicing costs might impede lending, members of the Mortgage Servicing Collaborative agreed on the need for streamlined and harmonized federal, state and agency policies and rules on servicing. Increased regulatory requirements have caused mortgage-servicing costs to skyrocket in recent years, experts said. Even though the quality of servicing has improved, the new regulations are complex and costly, they noted. Multiple pressures placed upon servicers have suppressed mortgage lending, making it harder for borrowers with tainted credit to obtain a mortgage, according to the ...


Poll

The year is almost 75% done. How is mortgage origination volume at your shop?

We will fund about the same as we did in 2016.
We will fund more than last year – by a little.
We will fund more than last year – by a lot.
We will fund less than last year – by a little.
We will fund less than last year – by a lot.

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