Home mortgage production volume increased by 20.4 percent during the third quarter of 2011 as record-low mortgage interest rates sparked a new wave of refinancing activity. An estimated $325.0 billion in new residential mortgages were originated during the third quarter, according to a new Inside Mortgage Finance ranking and analysis. While that was up solidly from the previous three-month period, it still ranked as the second lowest quarter since the mortgage market collapsed at the end of 2008. Through the nine-month mark in 2011, total production for the year was still down 16.7 percent from...(Includes two data charts)

The Federal Housing Finance Agency this week announced a series of substantial and eagerly anticipated changes to the Home Affordable Refinance Program for borrowers with underwater Fannie Mae and Freddie Mac mortgages. Among the new HARP enhancements is the elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lower fees for other borrowers. Also removed is the current 125 percent loan-to-value ceiling for fixed rate mortgages backed by the government-sponsored enterprises. Furthermore, HARP 2.0 waives “certain” representation and warranties made by...

Although Obama administration officials said this week that principal reduction would play a large role in the multistate foreclosure settlement under negotiation, sources suggest that sorting out potential writedowns will be complex and that the settlement will focus on other issues. During a press conference on the revamped Home Affordable Refinance Program this week, Housing and Urban Development Secretary Shaun Donovan said principal reductions would be a big part of a settlement that was rumored to be close to completion. “The settlement negotiation is also going to be focused on significantly accelerating the...

U.S. Attorney General Eric Holder has been called upon to take the lead in investigating allegations that a number of the largest mortgage lenders in the country may have systematically charged illegal fees to military veterans who refinanced their homes. Sen. Jon Tester, D-MT, a member of the Senate Committee on Veterans’ Affairs, sent a letter to Holder recently requesting he get involved in a probe to determine the veracity of the accusations. Earlier this month, a complaint was unsealed in federal court in which two whistleblower types accused the lenders of charging refinance fees that are...

Private mortgage insurer PMI Group Inc. is assessing its options, including a possible restructuring, after state regulators seized its main unit, PMI Mortgage Insurance Co., last week. Headquartered in Walnut Creek, CA, but incorporated in Arizona, the company was seized by Christina Urias, director of the Arizona Department of Insurance, two months after it was placed under regulatory supervision following a recent “rapid increase in losses that has adversely affected its solvency and that of its affiliates.” On its website, PMI Group informed its clients that Urias has obtained an order “directing full and exclusive...

The mortgage lending industry is more likely to see a return to higher FHA loan limits than higher Fannie Mae and Freddie Mac limits, after the Senate gave its approval to legislation that would restore higher conforming loan levels all the way around, according to one top industry lobbyist. Late last week, the Senate voted 60-38 to approve a federal spending bill that included an amendment sponsored by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, that would reinstate the higher loan limits for the government-sponsored enterprises and the FHA that ended on Sept. 30. Those limits dropped from a maximum of...

President Obama nominated Carol Galante to become the next Commissioner of the FHA, an agency that continues to adjust to a bigger role in the mortgage market. Galante has served as deputy assistant secretary for multifamily housing at the Department of Housing and Urban Development since 2009 and has filled in as acting FHA commissioner since the departure of David Stevens. She worked for nearly a quarter of a century at BRIDGE Housing, a company that specializes in affordable housing development. Galante definitely has the management and leadership experience for the post, said Brian Chappelle, co-founder of Potomac Partners LLC. “If...

The Supreme Court of the United States will settle a multi-district circuit court conflict that will likely determine the ability of the mortgage lending industry to determine on its own what to charge borrowers at the point of origination. In deciding earlier this month to accept Freeman v. Quicken Loans Inc., the high court will confront the question of whether a plaintiff must demonstrate an unearned fee for a real estate settlement service was divided between two or more persons in order to establish that a violation of Section 8(b) of the Real Estate Settlement Procedures Act occurred.

The Consumer Financial Protection Bureau has issued the first iteration of its supervision and examination manual, along with its examination procedures for mortgage servicing, in part so that financial services providers know what to expect during their examinations. The first section of the manual describes the CFPB’s compliance supervision and examination process. The second part outlines the bureau's examination procedures, including both general instructions and procedures for determining compliance with specific regulations. The final section provides templates for reporting risk assessments, examination results and supervision plans.