Mortgage Insurance

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

September 21, 2017 - Inside Mortgage Finance

Minding the Flood Insurance Policy Gap, GSEs Say They Monitor Servicers Annually for Compliance

Although flood insurance is required for Fannie Mae and Freddie Mac loans in designated flood areas, the recent hurricane activity in Houston and Florida has revealed that a number of borrowers didn’t have the coverage they were supposed to have. But getting to the root of the disconnect is complicated. Both government-sponsored enterprises said that it’s up to servicers to evaluate whether loans are in compliance with flood insurance requirements. But Fannie and Freddie said they also have their own systems in place to help ensure compliance. “Servicers are required...


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

USDA Securitization Up in 2Q17, Chase Regains Previous Ranking

Ginnie Mae securitization of single-family mortgages backed by rural housing loans with the U.S. Department of Agriculture guarantee rose in the second quarter of 2017 and on a year-over-year basis. Issuance of securitized USDA loans increased 9.0 percent from the previous quarter and was up 17.1 percent halfway through 2017 compared to first six months last year. Securitized rural housing loans accounted for $5.0 billion of total Ginnie MBS issuance in the second quarter and $9.5 billion of Ginnie MBS issued during the first six months of 2017. Freedom Mortgage led the market with $1.8 billion. Although down 1.4 percent from the first quarter, Freedom reported a whopping tenfold increase for the first six months from the same period last year. PennyMac maintained its second-place ranking with $1.4 billion, up significantly on a quarterly and year-over-year basis, while Wells Fargo, in third place, closed out the first half with $673.8 million in USDA-backed MBS. Chase Home Finance climbed ... [Chart]


September 15, 2017 - Inside FHA/VA Lending

VA Finalizes Rule for Establishing Fees, Charges for Vendee Financing

The Department of Veterans Affairs has announced a final rule that will allow it to establish reasonable fees to cover the costs of originating and servicing a VA-backed vendee loan. A vendee loan enables a borrower to purchase a VA real estate-owned property. Vendee financing is not a veteran benefit but is available to any purchaser, including veterans and servicemembers. In addition, vendee financing is available for non-owner and owner-occupied residential properties. An owner-occupied purchase can be financed with as little as zero percent downpayment while a non-owner-occupied purchase requires a minimum 5 percent downpayment. In addition, for non-owner-occupied purchases, investors may use 75 percent of anticipated rent, based on an appraiser’s estimate, to offset the subject property monthly payment. Furthermore, investors must have experience in ...


September 15, 2017 - Inside FHA/VA Lending

Lenders Seeking to Maintain Profit Margins Boost HECM Production

Reverse mortgage originations with FHA insurance increased both on quarterly and year-over-year bases as lenders, led by nonbanks, moved into the Home Equity Conversion Mortgage market to boost their bottom lines. HECM originations were up 5.5 percent from the first to the second quarter, closing out the first six months with $9.3 billion in total originations. Production was up 25.8 percent at the halfway mark compared to last year. Purchase loans comprised approximately 82.9 percent of HECM volume during the first half of the year. Adjustable-rate HECMs remained the preferred reverse-mortgage product for the majority of borrowers. Despite increased originations, FHA data show HECM production in gradual decline since endorsements peaked at $114.7 billion in FY 2009. The top five HECM producers in the first quarter continued to hold on to their spots. American Advisors Group maintained its rank as ... [Charts]


September 15, 2017 - Inside FHA/VA Lending

MBA Offers Measures to Deal With VA Appraisal Issues, Delays

The Mortgage Bankers Association has recommended steps to address the VA appraiser shortage and increased appraisal turn times. The industry group made its recommendations in a recent letter to Jeffrey London, executive director of the Department of Veterans Affairs’ Loan Guaranty Service, based on a roundtable discussion between MBA and other industry stakeholders in March. Stakeholders expressed their concern for the lack of VA appraisers and longer waiting periods for appraisal reports. Appraiser shortage is an ongoing problem for the VA, and has resulted in delayed loan closings, particularly in highly rural areas. Some states, like Oregon, have very few appraisers, the MBA pointed out. “This delay may force veterans to choose other loan programs to meet certain deadlines or face other adverse outcomes,” the MBA letter warned. On the other hand, the ...


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 15, 2017 - Inside FHA/VA Lending

Ginnie Mae to Take Action Against Illicit Refinancing of VA Mortgages

Rapid, aggressive refinancing of VA loans has made a comeback with some issuers using strategies to mask the practice and avoid possible penalties, including expulsion from the Ginnie Mae program, according to a top agency official. Responding to concerns raised by Sen. Elizabeth Warren, D-MA, Michael Bright, acting Ginnie Mae president and chief operations officer, said a joint Ginnie Mae/VA lender-abuse task force is analyzing monthly data and developing additional policy measures to deal with the problem. Bright confirmed the resurgence of inappropriate streamline refinancing in Ginnie securitization pools in recent weeks and has promised to crack down on the questionable practice. The problem surfaced last year when Ginnie Mae noticed unusually fast prepayment speeds in its mortgage-backed securities, particularly MBS backed by VA loans. Ginnie found that certain lenders and ...


September 15, 2017 - Inside MBS & ABS

Credit Rating Agencies Expect Limited RMBS Exposure Will Ease Effects of Losses in Storm Areas

Most rated residential MBS in regions affected by Hurricanes Harvey and Irma have limited exposure that will mitigate the losses resulting from the devastation, according to rating services. Residential MBS rated by Moody’s Investors Service, including securities backed by single-family rental properties, have minimal exposure to the storm-affected counties of Texas and Louisiana thereby easing the losses due to reduced property values, rising delinquencies and longer foreclosure and liquidation timelines, the rating agency said. The analysis is...


September 8, 2017 - Inside Mortgage Trends

Demographics Promise Growth for Private MIs

Changing demographics will be the private mortgage insurance industry’s most powerful growth engine over the next 20 years, predicts an industry report published by the Urban Institute’s Housing Finance Policy Center. The new report cited U.S. census data showing a 10 percent increase in the share of minority households in U.S. homeownership over the last two decades. It forecasts the share will increase to 38 percent by 2030. Demographic shifts, growth of minority households ...


September 7, 2017 - Inside Mortgage Finance

Purchase-Mortgage Lending Soared to Record Volume in 2Q17, But May Be Slowing Down

Mortgage lenders harvested a landmark crop of purchase-money mortgages during the second quarter, fueled partly by continuing growth in the first-time buyer segment, according to a new ranking and analysis by Inside Mortgage Finance. An estimated $307.0 billion of purchase loans were originated in the second quarter, up a stunning 49.8 percent from the first three months of the year. That was the highest quarterly volume for purchase-mortgage lending since the third quarter of 2006. Purchase loans accounted for 67.5 percent of the estimated $455.0 billion in first-lien mortgage originations during the April-June cycle, the highest such share since at least 2003. First-time buyers contributed...[Includes three data tables]


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

Agencies Issue Special Assistance Guidance for Lenders, MBS Issuers

As Hurricane Harvey’s floodwaters recede, federal agencies that provide guarantees on mortgages are faced with the daunting task of identifying and assisting borrowers with government-backed mortgages in disaster-stricken areas of Texas. FHA, VA, the U.S. Department of Agriculture’s Rural Housing Service and Ginnie Mae have issued special relief guidance for approved lenders following Hurricane Harvey. The FHA has issued guidance to remind lenders and servicers that FHA-insured mortgages secured by properties in a presidentially-declared major disaster area are subject to a 90-day moratorium on foreclosures following a natural disaster. FHA also provides lenders an automatic 90-day extension upon expiration of the moratorium to begin or re-start foreclosure action or evaluate the borrower’s need for loss mitigation. In addition, FHA urged servicers to brush up on the 203(h) and the ...


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 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

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 28, 2017 - Inside the CFPB

Is This Richard Cordray’s Last Week at the Helm of the CFPB?

The political calendar in Ohio may compel CFPB Director Richard Cordray to resign shortly – perhaps even this week – so that he can announce his candidacy for governor at the Sept. 4 Cincinnati AFL-CIO Labor Day picnic. According to CFPB watcher Alan Kaplinsky, a practice leader in the Philadelphia office of the Ballard Spahr law firm, Cordray is scheduled to deliver remarks at the event. “Assuming the speculation that Director Cordray plans to run for Ohio governor is accurate, that event seemed to be an ideal venue for him to announce his candidacy,” the attorney said in a recent blog post. The thing is, Cordray would have to resign from the bureau before declaring, according to Kaplinsky. That bolsters the argument ...


August 25, 2017 - Inside MBS & ABS

Mortgage Reinsurance: A Viable Growth Source But A Difficult Risk to Offload, Warns S&P

Relatively stable pricing and fairly healthy returns are giving mortgage reinsurers hope for a more robust market, according to a new analysis from Standard & Poor’s. Reinsurers seeking respite from a deteriorating property casualty reinsurance sector have found mortgage reinsurance a promising business diversification and source of growth – at least for now, said the rating service. However, reinsurers coming late to the feast might find...


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

Private MI Trade Group Urges CFPB To Establish Single QM Rule for All

The private mortgage insurance industry has called for harmonized qualified-mortgage standards to discourage potential arbitrage that might adversely affect consumers. In a comment letter, the U.S. Mortgage Insurers urged the Consumer Financial Protection Bureau to assess whether the various QM standards established under the Dodd-Frank Act have created arbitrage opportunities to the detriment of consumers. The CFPB is about to begin a reevaluation of its ability-to-repay rule/QM rule. QM standards are different for Fannie Mae, Freddie Mac and the Federal Home Loan Banks than for FHA, VA and the U.S. Department of Agriculture. The USMI said analysis should focus on the different treatment of points and fees and maximum borrower debt-to-income ratio among the various QM standards. The CFPB can address the calculation of points and fees under its ATR/QM rule by ...


August 18, 2017 - Inside FHA/VA Lending

NYDFS Accuses Veterans United of Overcharging Vets on VA Loans

The Mortgage Research Center, which does business as Veterans United Home Loans and/or VA Mortgage Center, has agreed to pay $1.1 million to New York regulators to resolve allegations of overcharging veterans on loans guaranteed by the Department of Veterans Affairs. Veterans United was the second largest VA lender in the country in the second quarter, with a 5.4 percent share of the VA market, according to the Inside FHA/VA Lending database. The settlement agreement is part of a consent order entered into recently by Veterans United with the New York Department of Financial Services (NYDFS). The settlement stemmed from an investigation which found that the Columbia, MO-based company did not refund “surplus lender credits” on 322 VA loans originated from Jan. 1, 2011, to June 30, 2014. According to the consent order, borrowers obtained a credit from ...


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 ...


August 18, 2017 - Inside MBS & ABS

Portfolios Shrink at Fannie and Freddie as GSE Share of MBS Market Hits 3 Percent in 9th Year of Conservatorship

The Home Affordable Refinance Program was arguably one of the most successful initiatives aimed at delivering consumer relief in the wake of the housing meltdown. It’s proving hard to kill. The Federal Housing Finance Agency this week extended HARP for another year, until the end of 2018. It was slated to sunset at the end of this year. The program has been extended several times since it was authorized back in 2009. The extra year is...


August 17, 2017 - Inside Mortgage Finance

Editorial Note

Inside Mortgage Finance received revised data from a private mortgage insurance company after the August 11 issue was published


August 17, 2017 - Inside Mortgage Finance

Industry Reps Use Congressional Recess to Gear Up For Second-Half Push of Mortgage Legislation

Members of Congress have left Washington, DC, for their summer recess, and mortgage industry representatives are using the time to plan strategy and educate lawmakers on key issues to help propel a number of measures across the finish line before the year ends. The most time-sensitive issues are reauthorizing the national flood insurance program and setting budgets for FHA and Ginnie Mae activity in fiscal 2018, which begins Oct. 1, 2017. Lawmakers will be looking to deal with these in September. Authority for the National Flood Insurance Program expires...


August 10, 2017 - Inside Mortgage Finance

Private MI Industry on a Roll: Market Share Surging and Profits Still Climbing (Updated 8/16/2017)

The private mortgage insurance business saw a jump in its share of the primary MI market during the second quarter, and all six active firms racked up solid gains in earnings, according to a new Inside Mortgage Finance analysis and ranking. Private MIs reported $70.65 billion in new primary MI written through traditional flow business activity during the second quarter. That was up 38.4 percent from the first three months of the year, though still slightly below the pace set in late 2016. Meanwhile, the government-insurance market faltered...[Includes two data tables]


Poll

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

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