Mortgage Insurance

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

November 16, 2017 - Inside Mortgage Finance

MMIF Value, Capital Ratio Decline in FY 2017 Due to Rising HECM Claims; Calls to Remove Program from Fund Increase

The Mutual Mortgage Insurance Fund’s economic net worth and capital reserve ratio declined in fiscal year 2017 due to losses in the FHA Home Equity Conversion Mortgage portfolio caused by rising claims, according to the agency’s annual report to Congress released this week. While the fund remains above its minimum capital level, both the economic net worth and the capital ratio fell from levels at the end of fiscal 2016, the report said. Specifically, the fund’s…


November 10, 2017 - Inside FHA/VA Lending

MBA Chief Calls for ‘Targeted’ FHA Reforms to Broaden Credit Access

Targeted reform of the FHA housing program, not broad structural changes, can potentially improve borrowers’ access to credit while clarifying the rules for lenders and protecting taxpayers, a top industry executive told Congress earlier this month. Testifying before the House Financial Services Subcommittee on Housing and Insurance, David Stevens, president and CEO of the Mortgage Bankers Association, said FHA reforms do not entail changes to the program’s scope, such as FHA market share or its customer base. Stevens noted that first time or low- to moderate-income borrowers are typical FHA borrowers. “The structure and coverage of FHA insurance has served borrowers and lenders well,” he said. “It should not be reduced or otherwise altered.” The Mutual Mortgage Insurance Fund capital ratios and thresholds are likewise appropriate, though options to improve the fund’s long-term solvency should ...


November 10, 2017 - Inside FHA/VA Lending

MBA Calls for Changes to LRS, Remedies for Lender Complaints

FHA lenders think the new Loan Review System is a “modern and streamlined system” that is less user-friendly than Neighborhood Watch, according to the Mortgage Bankers Association. In a letter to the Department of Housing and Urban Development, the MBA called on the FHA to continue its ongoing discussion with lenders and other industry stakeholders on how the improve the LRS and its response timelines. Implemented last May, the LRS is an electronic platform for monitoring and reviewing the quality of single-family mortgages that FHA has insured. It replaced the post-endorsement technical review performed by the FHA Connection/Underwriting Review System (URS), review functions for post-closing test cases submitted by direct endorsement lenders, and lender self-reporting functions in Neighborhood Watch. The LRS also includes a defect taxonomy, which features a list of ...


November 10, 2017 - Inside FHA/VA Lending

Analysts Expect Positive Actuarial Results for FHA Insurance Fund

Analysts are predicting continued positive results in the forthcoming actuarial report to Congress on the status of the FHA Mutual Mortgage Insurance Fund. The FY 2017 annual report is expected to show stable FHA financials, which could prompt renewed industry calls for a cut to the annual mortgage insurance premium, according to a Bank of America Merrill Lynch analysis. Rising home prices and loan-to-value curing are likely to suppress forecasted losses in the MMIF’s single-family forward portfolio, enabling the fund to stay above its mandated 2.0 percent capital reserve ratio, analysts said. However, the BAML analysts see a “low likelihood of an actual cut in MIPs.” Although Department of Housing and UrbanDevelopment Secretary Ben Carson said he would study MIP reduction once a new FHA commissioner is confirmed, the Trump administration is less likely to ...


November 10, 2017 - Inside FHA/VA Lending

Correspondent Platforms Feast on FHA, VA Securitization Market

Correspondent-based lending operations are accounting for a growing share of the FHA and VA home loans pooled in Ginnie Mae mortgage-backed securities, according to a new analysis and ranking by Inside FHA/VA Lending. In fact, correspondent originations are the only production channel to see year-over-year growth in FHA and VA business through the first nine months of 2017. Retail and wholesale-broker production is down for both FHA and VA loans. Correspondent programs are most dominant in the FHA market, perhaps reflecting a preference among large producers to have recourse to a primary-market lender if the government later finds defects in how the loan was originated. Correspondents accounted for 48.7 percent of FHA loans pooled in Ginnie MBS during the first nine months of the year, up from 43.1 percent in all of 2016. Volume was up 1.7 percent from the ... [Charts]


November 9, 2017 - Inside Mortgage Finance

FHA Market Share Drifting Lower as Private MIs And VA Post Bigger Gains During Third Quarter

Private mortgage insurers remained busy during the third quarter of 2017, but the VA loan guar-anty sector saw the biggest growth in primary MI business, a new Inside Mortgage Finance ranking and analysis reveals.


October 27, 2017 - Inside FHA/VA Lending

Around the Industry

CoreLogic to Provide Solutions to Cut FHA, MMIF Losses. The Department of Housing and Urban Development has chosen CoreLogic to provide valuation and workflow solutions to mitigate losses to the FHA and the Mutual Mortgage Insurance Fund. Under an agreement with HUD, CoreLogic will provide support to determine the best strategies and plans for the valuation and disposition of distressed and real estate-owned properties in HUD’s inventory. Individual Condominium Loan Processing in the VA’s WebLGY System. The Department of Veterans Affairs has issued guidelines to address issues that have arisen since making changes to its web-based loan guaranty system, WebLGY, earlier this month in regards to condominium identification. System changes included removal of the fields where users would input condo IDs when ordering a VA loan identification number (LINs)/appraisal ...


October 27, 2017 - Inside FHA/VA Lending

Waters Introduces Legislation to Make FHA Loans More Affordable

Legislation was introduced this week to repeal the FHA’s life-of-loan requirement and reinstate a previous policy of requiring borrowers to pay premiums until the outstanding principal balance reaches 78 percent of the original home value. Rep. Maxine Waters, D-CA, ranking member of the House Financial Services Committee, introduced the Making FHA More Affordable Act so that families would not have to keep paying mortgage insurance premiums for the life of their FHA-insured loan. Up until June 3, 2013, FHA was aligned with the private mortgage insurance industry in charging premiums only until the outstanding principal balance reached 78 percent of the original home value. The FHA first announced its intention to require life-of-loan premium payments in January 2013, allowing the agency to collect more premium revenue to bolster its ailing Mutual Mortgage Insurance Fund. FHA’s life-of-loan policy ...


October 27, 2017 - Inside FHA/VA Lending

Land Bank Program Cures Vacant Property Issues with 203(k) Loans

A new “fixer-upper” affordable housing program developed by a real estate broker for the Land Bank of Kansas City, MO, may not only help lower-income borrowers purchase a home but prove to be a profitable niche for FHA 203(k) lenders. The KC Land Bank initiative extends affordable mortgage loans to homebuyers looking to purchase and rehabilitate abandoned vacant homes in 21 neighborhoods in Kansas City. The vacant residential properties are acquired through a tax foreclosure auction and the aim is to sell them to borrowers in the same neighborhood where the property is located. Financing for the purchase and rehabilitation of a Land Bank home is mostly through the FHA 203(k) program, according to Ted Ihde, a licensed real-estate broker who developed the program and markets the homes through neighborhood housing groups. The program addresses an urban problem that ...


October 27, 2017 - Inside FHA/VA Lending

FHA, VA Post Lower Denial Rates, Minorities More Likely Users of FHA

Overall denial rates for nonconventional loan applications (FHA, VA and Rural Housing Service) fell slightly in 2016 to 13.4 percent from 13.9 percent in 2015, Home Mortgage Disclosure Act data showed. In the nonconventional refinancing segment, denial rates rose to 32.9 percent last year from 30.3 percent in the previous year. Approximately 23.9 percent of FHA loan applicants were denied last year while VA turned down 20.0 percent of borrowers who sought a VA loan. An estimated 14.3 percent of FHA purchase-loan applicants were turned down. VA denied 11.4 percent of its purchase-mortgage applicants although its total purchase-loan applications are far fewer compared to FHA. According to the Federal Reserve’s overview of the 2016 HMDA data, as in past years, blacks, Hispanics and “other minority” borrowers had notably higher denial rates overall compared to white borrowers. Denial rates for ...


October 27, 2017 - Inside FHA/VA Lending

Carson Announces Plan to Review Cert Process, Defect Taxonomy

The Department of Housing and Urban Development will review its current lender-certification process and defect taxonomy to address industry concerns about costly penalties and settlements arising out of False Claims Act lawsuits. In remarks at the Mortgage Bankers Association’s annual convention in Denver this week, HUD Secretary Ben Carson said the review would benefit greatly from feedback by lenders and other stakeholders in response to President Trump’s directive to all federal agencies to eliminate burdensome and duplicative regulations. Carson said HUD’s immediate concern is bringing back lenders that have exited the FHA single-family program or limited participation because of the undue risks they face from FCA enforcement. Lenders need clarity in what HUD expects from them in terms of lending and reduced exposure to outsized liability from immaterial errors, the ...


October 20, 2017 - Inside Mortgage Trends

Private MI Gaining Market Share from FHA

Private mortgage insurers are winning purchase-mortgage business away from the FHA, and VA lending is also gaining ground, according to an analysis of agency mortgage-backed securities data by Inside Mortgage Trends. Lenders delivered $50.25 billion of purchase loans with private MI coverage into agency MBS during the third quarter of 2017. That represented 40.2 percent of total insured purchase loans securitized by the agencies, up from 39.3 percent ... [Includes one data chart]


October 20, 2017 - Inside MBS & ABS

Arch Brings First Mortgage Insurance Linked-Notes Deal with Credit Rating

Arch Capital Group is set to issue a mortgage-insurance linked note transaction. Unlike two other re-insurance deals from a similar shelf, Bellemeade Re 2017-1 received credit ratings, expanding the investor base for the transaction. A mezzanine tranche of the deal received preliminary BBB ratings from Morningstar Credit Rat-ings this week. Mortgages delivered to the government-sponsored enterprises with an unpaid principal balance of $29.30 billion are included in the transaction ...


October 13, 2017 - Inside FHA/VA Lending

HUD Dumps Lender Insight for New Loan Review Summary Report

The Department of Housing and Urban Development is discontinuing its quarterly newsletter, Lender Insight, with the implementation of FHA’s Loan Review System. The change is aimed at improving both FHA’s and lenders’ quality-control and risk-management operations. HUD will be publishing a quarterly Loan Review Summary Report to provide a snapshot of the results of FHA’s quality-control review of mortgage originations over the preceding 12 months. According to HUD, the report will include only underwritten loans that were subject to a post-endorsement technical review. It does not include the results of lenders’ self-reports or any other loans that were reviewed as part of a lender examination, the agency said. The report will show the initial rating of all loans, the updated rating six months from the end of the review period, and a final rating. The “final” rating is subject to change as long as ...


October 13, 2017 - Inside FHA/VA Lending

HUD Finds IG’s Recommendations On Water Safety Unwarranted

The Department of Housing and Urban Development has requested its inspector general to reconsider certain recommendations intended to toughen safety standards for drinking water in FHA-insured properties. Other lenders or appraisers could interpret imposing stringent requirements on a few FHA lenders wrongly, which could lead to unnecessary water testing simply to avoid future litigation risk, HUD warned in its response to audit findings. HUD disagreed that administrative action is warranted. “Due to potential unintended consequences, [HUD Single Family] does not believe the imposition of sanctions at this time presents a viable alternative,” the department wrote. While making changes to water-safety standards, HUD said it will train lenders and appraisers to ensure compliance with the revised standards. The IG audit came in the wake of a previous audit, which found that ...


October 13, 2017 - Inside FHA/VA Lending

FHA Eases Occupancy Rule for Properties with H4P Financing

The FHA has updated its guidelines for Home Equity Conversion Mortgage for Purchase (H4P) loans to allow lenders to accept loan applications from borrowers without requiring a certificate of occupancy, as well as prior to completion of HECM counseling. The change follows the Sept. 19 effective date of the HECM final rule, which the Department of Housing and Urban Development released earlier this year. The final rule codifies the many policies that are now in place for originating and servicing reverse mortgages, including H4P requirements. According to the revised guideline, an FHA lender may take an initial HECM loan application either prior to or after the completion of HECM counseling. Also, previously, H4P properties were eligible for FHA insurance only when construction was completed and when the local jurisdiction issued a certificate of occupancy or its equivalent, confirming the ...


October 13, 2017 - Inside FHA/VA Lending

Ginnie Reveals Nearly 10 Percent Exposure in Disaster Areas

An estimated 9.8 percent of Ginnie Mae’s business may be potentially at risk due to hurricanes Harvey, Irma and Maria, according to data released recently by the agency. The data represent the number of Ginnie loans and their unpaid principal balance amounts in presidentially declared disaster areas in Texas, Florida, Georgia, Puerto Rico and the U.S. Virgin Islands. A total of 1.07 million mortgage loans with an unpaid principal balance of $184.5 billion have been affected. Ginnie Mae’s current mortgage-backed securities portfolio totals $1.9 trillion. The data only refer to the geographic locations of all affected properties underlying loans in Ginnie MBS pools and do not indicate the percentage of those that may have sustained damage during a storm. Hurricane Irma had the highest share of affected loans, 6 percent, while Harvey and Maria accounted for 3 percent and 1 percent, respectively. Irma caused the ...


October 13, 2017 - Inside FHA/VA Lending

Carson Open to Excising HECM From Mortgage Insurance Fund

Department of Housing and Urban Development Secretary Ben Carson indicated he is open to the idea of moving the Home Equity Conversion Mortgage program out of the FHA Mutual Mortgage Insurance Fund to stem future losses. Testifying before the House Financial Services Committee this week, Carson said the changes the department has made recently, as well as those currently under consideration, will eliminate most of the program’s problems although residual issues may still linger. Carson acknowledged that the HECM program’s default rate has been a drain on the MMI Fund even though it is much smaller than the FHA’s forward loan portfolio. The recently revised HECM rules issued on Sept. 19 have “stopped the bleeding” in terms of new reverse mortgages, he added. However, separating the HECM portfolio from the FHA insurance fund and making it a stand-alone program is ...


October 12, 2017 - Inside Mortgage Finance

Agency MBS Data Show Private MI Business Kept Growing in 3Q17, FHA Activity Lagged Behind

Private mortgage insurers captured a larger share of the purchase-mortgage market during the third quarter of 2017 as the credit profile of new FHA production tilted toward riskier business, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized $64.59 billion of purchase loans with private MI coverage during the third quarter, a 28.5 percent jump from the previous period. That was substantially greater than the ... [Includes three data charts]


Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.
No. It’s still difficult compliance/regulatory-wise.
Maybe. It’s under consideration.
Not now. But things could change as 2018 progresses.

vote to see results