The serious delinquency rate on subprime mortgages continued to improve in the second quarter of 2015 while the amount of subprime mortgages outstanding also dwindled. An estimated $330.0 billion in subprime mortgages were outstanding as of the end of the second quarter of 2015, according to Inside Nonconforming Markets. The volume was down by 14.5 percent compared with the second quarter of 2014. In that time, the serious delinquency rate ... [Includes one data chart]
The monitor of a $2.0 billion settlement involving Ocwen Financial revealed last week that the nonbank was found to have failed another metric under the settlement. However, the monitor noted that Ocwen has worked to address many of the issues that have dogged the company over the past year. The monitor re-tested Ocwen on a number of metrics under the settlement due to concerns that were raised about the integrity of the servicer’s internal review group ...
The $269.29 million jumbo mortgage-backed security that Shellpoint Partners plans to issue next week will be the first to include certain recommendations from the RMBS 3.0 project, according to the Structured Finance Industry Group. Eric Kaplan, a managing director at Shellpoint, helped launch the SFIG’s RMBS 3.0 effort. The representations and warranties on Shellpoint Co-Originator Trust 2015-1 will include a mandatory review upon ... [Includes three briefs]
VA originations set a new record in the second quarter of 2015 with lenders funding $39.6 billion in VA loans while FHA continued to ramp up its volume, according to new figures compiled by Inside FHA/VA Lending. The latest production result surpassed VA’s previous record origination total of $37.5 billion in the first quarter of 2013. Lenders attributed the increase to their effort to promote the VA Home Loan Guaranty program through broadcast, print and social media “We are doing all we can every day to promote the VA product,” said one VA lender. “Many veterans are not familiar with the program and they don’t know what’s available to them. They don’t understand what the government is actually doing for them through this VA portal.” The VA program allows 100 percent financing on a 30-year fixed-rate single-family mortgage. VA production in the second quarter jumped 58.2 percent compared to ... [2 charts]
Mortgage lenders welcomed the FHA’s implementation of a new supplemental method for evaluating a lender’s performance while expanding eligible, underserved borrowers’ access to mortgage credit. But some say the new metric still doesn’t resolve lenders’ liability concerns. The FHA’s new supplemental performance metric will be used in tandem with the agency’s compare ratio, a measure used by FHA to compare a lender’s default and claim rate with those of its peers to determine whether a lender’s authority should be terminated. Due to the compare ratio being a comparison to one’s peers rather than to FHA’s risk tolerance, lenders have found it difficult to lend to borrowers with credit scores below 640 without running afoul of Neighborhood Watch. Commenting on the FHA’s proposed supplemental performance metric last year, the Mortgage Bankers Association said the compare ratio has created a ...
The Department of Veterans Affairs has adopted a final rule aligning the Home Loan Guaranty Program’s disclosure and interest-rate adjustment requirements with the servicing provisions in the Truth in Lending Act, as recently revised by the Consumer Financial Protection Bureau. The rulemaking will ensure VA remains consistent with other consumer finance and housing regulations governing adjustable-rate mortgages, the agency said. The rule is effective Sept. 11, 2015. The VA adopted without the change the rule as proposed on March 30, 2015. In this rule, VA adopted TILA’s minimum 45-day look-back period to clarify that lenders making VA ARMs must meet the statute’s minimum notification requirements. Specifically, disclosures and notifications must be provided to borrowers before an interest-rate adjustment. Lenders are required to adjust ARM rates based on the most recent ...
The FHA’s overall delinquency rate declined in the second quarter of 2015, although late payments increased in the 30-day and 60-day categories on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest national delinquency and foreclosure survey. The FHA, on the other hand, reported some variances in its delinquency data. The 90-day plus delinquency rate in June was down 30 basis points from March’s 6.42 percent on an unadjusted basis. Considering seasonal factors, the decline was just 2 bps. Results of the MBA survey showed FHA’s overall delinquency rate at 9.00 percent in the second quarter, down from 9.10 percent in the previous quarter, as the serious delinquencies (90 days or more) fell over the same period. On the other hand, the 30-day and 60-day delinquency rates for FHA loans were up by a combined 10 bps from the ...
Poor oversight of lenders participating in the Section 203(k) Rehabilitation Loan Mortgage Insurance Program has increased the risk to FHA’s Mutual Mortgage Insurance Fund by more than $1.2 million for 40 active loans, according to the Department of Housing and Urban Development’s Office of the Inspector General. HUD’s Office of Housing questioned the findings of its independent auditors, saying that 203(k) lenders are monitored closely despite the limited staff and resources. The IG recommended to HUD that lenders be required to support or indemnify the department for any future losses on the 40 loans and to reimburse actual losses on two 203(k) loans totaling $83,332. An audit of HUD’s oversight of the program uncovered alleged weaknesses in the monitoring of lenders for compliance with the 203(k) program. In addition, HUD did not always ensure that loan-to-value ratios were ...
The U.S. Department of Agriculture’s Rural Housing Service strongly urged approved lenders to recommend the Section 502 Direct Loan Program to low- and very low-income borrowers who do not qualify for the USDA’s single-family housing guaranteed loan program. While some rural home-loan applicants show willingness and ability to pay their debts, they may not be able to afford to repay a guaranteed loan, the USDA observed. However, lenders can help by introducing such borrowers to the USDA direct loan program, a subsidized mortgages that allows the agency to lend directly to households with adjusted income not exceeding 80 percent of the area median. The program requires no downpayment on a mortgage with a fixed interest rate tied to the Treasury benchmark interest rate. The rate in effect for August and September 2015 is ...
Two FHA lenders in Texas have agreed to pay a total of $469,419 in civil money penalties to resolve government allegations they charged bogus fees to borrowers to inflate the purchase amount of newly built manufactured housing. Among 11 alleged violations of FHA rules, the Department of Housing and Urban Development’s Mortgagee Review Board accused American Home Free Mortgage of Prosper, TX, of artificially increasing mortgage costs by an average of $12,000 per loan through improper fees. The fees were paid allegedly to a company owned and operated by AHFM’s sales manager. In addition, HUD alleged there were multiple violations of quality and annual certification requirements. As part of the settlement agreement, without admitting to any fault or liability, AHFM agreed to pay a $169,419 fine and to the permanent withdrawal of its FHA approval. In June 2014, the MRB also heard a ...