The FHA is working on a statistical model that incorporates new factors to help the agency target loan-level compliance reviews and in-depth lender examinations more precisely, according to a top agency official. The model’s selection criteria is not lender-specific but focus instead on attributes in the loan file that have the highest propensity or probability of containing a material deficiency or defect that could result in a loss for the FHA insurance fund, said Justin Birch, director of the FHA Quality Assurance Division. The model was developed for post-endorsement reviews, which currently are ...

Ginnie Mae is increasing its scrutiny of issuers and tightening the screening of new issuer applicants to ensure that all participants in its mortgage-backed securities program fulfill their obligations. The agency is concerned about issuers coming in with little understanding of how the program works and what their responsibilities are, and putting Ginnie Mae at risk, said Michael Drayne, senior vice president at Ginnie Mae’s Office of Issuer and Portfolio Management, during a recent webinar hosted by Inside Mortgage Finance. Drayne noted Ginnie Mae’s success, saying that the only way it would not be profitable is ...

Mortgage-backed securities production by the top Ginnie Mae issuers in the third quarter of 2012 slipped but not by enough to offset the 32.1 percent gain on a year-over-year basis, according to an Inside FHA Lending analysis of Ginnie Mae data. Ginnie Mae MBS issuance fell by a mere 0.1 percent from the second quarter, a hiccup that would have been easily cured had any of the top five issuers posted even a modest gain. All five issuers saw their issuances fall during the quarter. The top issuers reported a total of $100.57 billion in MBS sold to investors at the end of the third quarter, down from $100.62 billion the previous quarter. The slip disrupted an ...

The mortgage banking industry is urging Congress to reject the FHA’s call to eliminate the existing “knew or should have known” standard in the National Housing Act in connection with an agency proposal to extend indemnification authority to all direct-endorsement lenders. Both proposals are part of legislative and administrative measures sought by the FHA to strengthen its capability to manage risk and protect its Mutual Mortgage Insurance Fund. A recent independent actuarial review of the fund found that in FY 2012 the economic value of the FHA’s single-family portfolio had dropped to negative $13.5 billion (excluding Home Equity Conversion Mortgage loans) and that ...

The Department of Housing and Urban Development this week clarified that mortgages using cash investment funds provided under a government housing assistance program to meet the FHA’s 3.5 percent downpayment requirement are eligible for FHA insurance. HUD issued the interpretive rule to clarify the confusion caused by a provision in the National Housing Act that prohibits certain sources of a homebuyer’s funds for the required minimum FHA downpayment on a home loan. Because of this provision, cash investment funds provided by federal, state and local homeownership assistance programs to first-time and lower-income homebuyers may be deemed ...

The FHA has extended a temporary waiver of its regulation that prohibits property flipping in the single-family mortgage insurance program to encourage more investors to participate in agency efforts to ease its burgeoning inventory of real estate-owned properties. First issued in January 2010, the regulatory waiver is now effective through Dec. 31, 2014, after two previous adjustments since issuance. Prior to the waiver, a mortgage was not eligible for FHA insurance if the purchaser sold the property within 90 days of its acquisition and is ...

FHA endorsements jumped 18.8 percent in October from the previous month and by more than half from a year ago, with mortgagees accounting for 80 percent of production, according to Inside FHA Lending’s analysis of FHA data. FHA originations, excluding Home Equity Conversion Mortgage loans, totaled $22.8 billion in October, up from $19.2 billion in September and 56.4 percent more than a year ago. Fixed-rate forward mortgages accounted for nearly all FHA loans produced during the month, with purchase mortgages having a slight edge in the mix over refinances. Top-ranked Wells Fargo outdid other lenders in October with ...

Thanks to the Federal Reserve’s aggressive support for the agency mortgage market and continuing strength in the refinance program for underwater Fannie Mae and Freddie Mac borrowers, mortgage refi activity has accounted for 73.1 percent of 2012’s surging production volume. But home-purchase lending started to regain some market share during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. An estimated $143 billion of home-purchase mortgages were originated during the third quarter, up 10.9 percent from the previous three-month period. By comparison, refinance production was up just 2.8 percent from the second quarter. The purchase-mortgage sector still has...[Includes three data charts]

The state of emergency in the U.S. mortgage market lives on for another year, as the Federal Housing Finance Agency announced that conforming loan limits will remain as they are for 2013. The agency didn’t have much say in the matter, since Congress in late 2011 extended the “emergency” loan limits for Fannie Mae, Freddie Mac and the FHA through the end of 2013. Lawmakers did lower the top Fannie/Freddie loan in high-cost markets of the lower 48 states to $625,500, while the top-end FHA loan is still $729,750. Although the FHA has not yet announced...

The mortgage finance industry is getting antsy because the much-anticipated ability-to-repay final rule still has yet to be released by the Consumer Financial Protection Bureau, even though it was widely expected to come out after the election, perhaps by Thanksgiving. The bureau does not have a specific release date yet, but officials still expect it to happen before the statutory deadline of Jan. 21, 2013. Lenders are pretty amped up...