Mortgage Insurance

Browse articles from all of our Newsletters related to Mortgage Insurance.

July 21, 2017 - Inside FHA/VA Lending

Around the Industry

Bipartisan Flood Bill Introduced in Senate. The Senate Committee on Banking, Housing and Urban Affairs will soon consider a bipartisan bill introduced this week that would keep the National Flood Insurance Program funded for six more years and create new risk mitigation procedures for communities to follow. Senate Banking Committee Chairman Mike Crapo, R-ID, and ranking Democrat Sherrod Brown, OH, said the bill would serve as a template for consideration by the whole committee. The Senate bill does not include core provisions in the House version, including the development of a private flood insurance market to complement the NFIP. In addition, the bill does not call for cuts in the reimbursement rate for Write-Your-Own flood-insurance carriers that service NFIP policies. However, amendments are likely, according to Crapo and Brown. Meanwhile, the ...


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

House Panel Earmarks $50 Million For Home Counseling Assistance

The House Appropriations Committee has recommended $50 million to fund the Department of Housing and Urban Development’s FY 2018 housing counseling assistance to homebuyers, homeowners and low and moderate-income renters. The allocation is $3 million more than the Trump administration had requested and $5 million below the amount appropriated for housing counseling in fiscal year 2017. In its budget report, the committee noted the continued improvement in the economy, which has resulted in fewer foreclosures. Foreclosure filings from 2016 were reported on 933,000 properties, representing a 10-year low and a 14 percent reduction from 2015, the report pointed out. “The foreclosure rate has stayed within a historically normal range for three years, even with the pipeline of legacy foreclosures resulting from the housing bubble,” it said. In addition, the bill retains language that ...


July 21, 2017 - Inside FHA/VA Lending

VA Clarifies, Underscores Use of Tidewater Process in Appraisals

The Department of Veterans Affairs is ratcheting up enforcement of its so-called Tidewater process to prevent veterans from paying more than the appraised value of the property when using a VA loan. In recent guidance, the VA reaffirmed its 2003 Tidewater Appraisal Initiative to help reduce the number of cases where appraisers have been asked to reconsider their initial appraisal, which had come in below the sales price. The guidance emphasizes procedures for improving communication of new sales data to VA fee and staff appraisers for a reevaluation of the low initial appraisal. “These guidelines should help limit the number of cases that reach the reconsideration-of-value phase and also provide a more timely response to those cases that are submitted for reconsideration,” the VA explained. The Tidewater procedure provides a designated “point of contact” (POC) the opportunity to ...


July 21, 2017 - Inside FHA/VA Lending

RHS Spells out Review Procedures For Approved Lenders, Servicers

The U.S. Department of Agriculture’s Rural Housing Service has clarified procedures for reevaluating approved lenders’ and servicers’ eligibility under the RHS Single Family Housing Guaranteed Loan Program. The guidance also provides procedures for updating lender information. The RHS intends to review and document lender eligibility in accordance with regulation and program requirements to protect government assets and minimize taxpayer losses. Office of Management and Budget regulations require federal agencies to reevaluate and record lender and servicer eligibility every two years. “For the [USDA single family loan guarantee program], it requires making sure that lenders and servicers participating in federal credit programs meet all applicable financial and program requirements,” wrote Richard Davis, acting RHS administrator. To meet the requirements, lenders must ...


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 14, 2017 - Inside Mortgage Trends

California Sees Shift in Purchase-Mortgage MI

California remains the biggest purchase-mortgage market for private mortgage insurers, and it looks to be shifting away from FHA, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. In the second quarter of 2017, private MIs wrote coverage for $5.20 billion of California purchase mortgages – or 36.0 percent of insured loans in the state. A year ago, the private MI share was 33.1 percent. Over that period ... [Includes one data chart]


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

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 Kristie Kully, 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 ...


June 30, 2017 - Inside The GSEs

U.S. Mortgage Insurers Analyzes GSE Reform Proposals

The U.S. Mortgage Insurers weighed in on how four think tank and trade group GSE reform proposals align with the group’s reform principles. Mortgage insurers have said that protecting taxpayers, promoting stability, ensuring accessibility and fostering transparency are important components of a successful reform plan. The Milken Institute plan recommends that Fannie Mae and Freddie Mac be taken out of conservatorship and their charters amended to turn them into mutual entities owned and operated by seller-servicers, with Ginnie acting as a stand-alone government corporation. The USMI said the proposal works to protect taxpayers by requiring more private capital and promotes stability by utilizing Ginnie’s existing infrastructure and systems.


June 29, 2017 - Inside Mortgage Finance

Flood Insurance Bills Advance in House, Other Mortgage Reforms Introduced

The U.S. House of Representatives was a relatively busy place last week, with a handful of measures related to flood insurance passing the House Financial Services Committee, and a few other, small-scale, individual mortgage reforms being introduced. Among the bills passed by the committee was H.R. 2875, the “National Flood Insurance Program Administrative Reform Act of 2017,” introduced by Rep. Nydia Velazquez, D-NY. It would make certain administrative reforms to the NFIP to increase fairness and accuracy and to protect the taxpayer from program fraud and abuse. The legislation passed on a 58-0 vote. Also favorably voted on was...


June 29, 2017 - Inside Mortgage Finance

Servicing Group Focuses on Issues with Government-Insured Mortgages; Also Looking for Ways to Simplify Servicing

A group of servicers and other industry participants is focusing on issues with government-insured mortgages and has plans to simplify servicing practices. The Mortgage Servicing Collaborative was organized by the Urban Institute’s Housing Finance Policy Center. It includes representatives from a number of major servicers along with some officials from trade groups, consumer groups, investors, mortgage insurers, vendors and academics. The goal is...


June 23, 2017 - Inside FHA/VA Lending

Around the Industry

House Financial Services Committee Approves Flood Insurance Reform Measures.The House Financial Services Committee this week reported out several bills to reform and reauthorize the National Flood Insurance Program, which is set to expire on Sept. 20, 2017. The bills that passed included H.R. 2875, the National Flood Insurance Program Administrative Reform Act of 2017, which would protect taxpayers from program fraud and abuse; H.R. 1588, the Repeatedly Flooded Communities Preparation Act, which would ensure community accountability for areas frequently damaged by floods; and H.R. 1422, the Flood Insurance Market parity and Modernization Act, which would increase the availability of private flood insurance. The committee also approved H.R. 2246, the Taxpayer Exposure Mitigation Act of 2017, which would shift flood insurance risk for commercial and multifamily properties in ...


June 23, 2017 - Inside FHA/VA Lending

HUD’s Old IT Systems ‘Near Death’ Due to Lack of Technical Support

The Department of Housing and Urban Development could soon face a technology crisis with roughly 87 percent of its antiquated information-technology systems dying or on the verge of collapse. The warning came from the HUD inspector general in a semiannual report to Congress. The report raised concerns about the poor state of HUD’s IT systems, “of which 87 percent are at or near the end of their life cycle.” These systems include 400 IT products that no longer have technical support, the report noted. The problem is so bad that HUD is having trouble doing mathematical ...


June 23, 2017 - Inside FHA/VA Lending

VA Blames Flawed Uploading Procedures for Servicing Glitch

VA troubleshooters have identified the technical glitch that has prevented servicers from uploading current servicing data to the agency’s VALERI system. According to a VA spokesperson, the problem was caused by faulty uploading procedures, not by malware within the documents as earlier feared. “Dridex was originally suspected because we became aware of it at the same time the uploading problem occurred,” he explained. “Our warning to servicers was an emphasis on the side of caution.” The Dridex malware, which can go undetected, targets customers of financial institutions by stealing their personal information through HTML injections. The VA Loan Electronic Reporting Interface (VALERI) is a loan administration system that servicers use to oversee loan servicing, monitor loan defaults, and accept and pay claims and incentives. Servicers experiencing problems with uploading servicing data should immediately ...


June 23, 2017 - Inside FHA/VA Lending

FHA Discusses Challenges when Using Agency’s New EAD Portal

The FHA has issued guidance to lenders and appraisers regarding problems that have arisen since the agency announced its Electronic Appraisal Delivery (EAD) portal in 2015. Effective June 27, FHA will require appraisals for new FHA originations to be submitted through the EAD. The portal’s use has been voluntary. Users without a valid user ID for accessing the EAD portal will be locked out of the system after the effective date, the FHA warned. Users that have not signed on the FHA Connection will lose their user ID. Only their organization’s FHAC application coordinator can reinstate them and restore access to the portal. “Hard stop” messages, which are built into the EAD portal, indicate data errors that must be resolved before the appraisal can be successfully transmitted to FHA. This helps avoid potential data conflicts between the portal and FHA. The FHA has identified five hard-stop errors ...


June 23, 2017 - Inside FHA/VA Lending

MBA Urges DOJ, HUD to Suspend Future FCA Enforcement Actions

The Mortgage Bankers Association is calling for a moratorium on future claims against FHA lenders under the False Claims Act to give the Department of Housing and Urban Development sufficient time to streamline its defect taxonomy and revise its loan-level certification requirements. In letters to HUD and the Department of Justice, the MBA said the FHA has yet to issue clear standards identifying specific errors that could trigger an FCA claim and those that do not. FCA enforcement actions can result in very significant damage to a lender’s reputation and bottom line, warned Dave Stevens, MBA president and chief executive officer. Although FHA lenders work hard to ensure compliance with strict underwriting and documentation standards, origination, insurance and servicing depend heavily on human efforts, which could easily result in technical errors, he added. While lenders process ...


June 23, 2017 - Inside FHA/VA Lending

VA Jumbo Securitization Declines, FHA Jumbo Production also Down

Wells Fargo fell a notch as PennyMac raced to the top to become the leading VA jumbo securitizer for the first quarter of 2017 – a period in which VA jumbo loan securitization took a sharp nose dive. The volume of VA jumbo loans securitized during the first three months plunged 36.8 percent, compared to the meager 2.0 percent decline seen in the fourth quarter. The drop reflected a 32.9 percent drop in jumbo mortgage production during the first quarter, along with similar large drops in virtually every product segment in the mortgage market, according to an analysis by Inside FHA/VA Lending affiliate Inside Mortgage Finance. The agency jumbo market was down 39.1 percent from the fourth quarter despite the bump up in high-cost loan limits to $636,150, an increase of $10,650 that became effective in January. All components of the agency jumbo market took big hits in the first quarter, including ... [ Charts ]


June 16, 2017 - Inside Mortgage Trends

First-Time Buyers, Millennials Drive Home Sales

First-time homebuyers have fueled a surge in home sales in the last two years, and the trend is continuing into 2017, according to a new report on the first-time homebuyer market from Genworth Mortgage Insurance. The report focused on mortgage origination data from more than 20 million first-time homebuyers over the past 24 years, with some interesting findings. Approximately 85 percent of the overall increase in home sales over the past two years was...


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