A high percentage of FHA-insured mortgage loans were deemed unacceptable after a post-endorsement review performed by the FHA revealed material defects that apparently went undetected at the time the loans were approved, according to the Department of Housing and Urban Development. In a recent report by HUD’s Office of Lender Activities and Program Compliance, 44 percent of 6,251 single-family mortgage loans that underwent post-endorsement loan reviews in the first quarter of 2013 were found initially unacceptable. Under the FHA’s three-tier rating system, loans are rated as “conforming,” “deficient” or “unacceptable.” The review found...

Although the recent spike in rates spooked some players in the non-agency market, conduits like Redwood Trust and Credit Suisse are still in the hunt for new customers.

Gordon Albrecht, executive vice president for FCI Lender Services, said, “The less the banks lend, for whatever reason, the more goes to private-money firms.”

Spreads have widened significantly on non-agency jumbo MBS in recent weeks, cutting into issuers’ profits.

According to exclusive figures compiled by Inside Mortgage Trends, Citigroup had $748 million of disputed buybacks with the GSEs at March 31.

Authorizing the FHA to shift mortgage-servicing rights from one processor to another could have a ripple effect on Ginnie Mae servicing rights.

On Tuesday the Fed will hold an open meeting to discuss final rule-making tied to the Basel III accords, which affects the value of mortgage servicing rights.

In response to a significant amount of public input – and private bellyaching – from the mortgage finance industry, the CFPB last week issued a number of proposed clarifications and revisions to several mortgage rulemakings finalized in January 2013, including changes to those having to do with loan originator compensation. The proposed changes would, among other things, clarify the definition of a loan originator. Under the CFPB’s January 2013 loan originator compensation final rule, persons classified as loan originators...

The Department of Veterans Affairs will soon seek comments on certain proposed rules that would allow VA underwriting guidelines to remain independent of the Consumer Financial Protection Bureau and to also implement a lender scorecard. After a lengthy discussion with the CFPB regarding the “qualified mortgage” rule, the VA said it will propose a rule that would prohibit CFPB’s new underwriting guidelines from superseding existing VA guidelines. The VA feels there is no need for any significant change to its current underwriting rules due to ...

FHA endorsements saw very little improvement in May as mortgage interest rates began to climb, according to Inside FHA Lending’s analysis of FHA data. Total FHA originations rose only 2.4 percent in May to $22.0 billion from $21.5 billion the previous month, and 8.9 percent on a year-over-year basis. Volume was split down the middle between purchase and refinancings, with rates rising from 3.35 percent during the first week of May to 3.81 percent at the end of May. Retail accounted for 81 percent of FHA endorsements, which were mostly 30-year, fixed-rate mortgages. The average interest rate for FHA-insured, 30-year FRMs was ... [1 chart]