FHA lenders are anticipating a spike in volume when changes to the FHA Streamline Refinance Program become effective next month. The biggest change to the program taking place on June 11 is the lower upfront mortgage insurance premium, which the Department of Housing and Urban Development had reduced to just 0.01 percent, and the annual MIP, which was lowered to 0.55 percent. The new premium pricing is effective for all streamline refi transactions that are refinancing FHA loans endorsed on or before May 31, 2009. HUD expects the change will ensure that borrowers benefit from a net reduction in their overall mortgage payment and, at the same time, reduce risk to the FHA. The FHA Streamline Refi program allows borrowers with FHA-insured loans who are current on their mortgage to refinance into a new FHA-insured loan without ...

The FHA and the reverse mortgage industry are working on guidelines that would help lenders in the Home Equity Conversion Mortgage program identify unsuitable borrowers. Financial assessment guidelines that are currently in development would limit the pool of HECM applicants to those who can afford to meet the program’s financial obligations in a timely manner, said Jeffrey Lewis, chairman and chief executive officer of Generation Mortgage in Atlanta. HECM loans account for 90 percent of all reverse mortgages originated in the U.S. Loan volume had contracted in the wake of the financial crisis, down ...

Ginnie Mae has announced new data disclosures effective Sept. 1, but investors say it is information they do not need. These include indicators identifying first-time homebuyers, type of third-party originator, and the upfront and annual mortgage insurance premiums. The new disclosures will provide greater transparency on the collateral that backs Ginnie Mae mortgage-backed securities, the agency explained in its latest guidance to program participants. The move also aligns Ginnie Mae’s data disclosures with the industry, it added. Issuers that are unable initially to provide the data will ...

The Department of Housing and Urban Development’s Office of the Inspector General will begin internal audits later in 2012 on various aspects of the FHA single-family mortgage insurance program and release results of some that were begun last year. In August, OIG auditors will begin review of the FHA TOTAL (Technology Open to All Lenders) Scorecard to determine whether the automated underwriting system approves loans that otherwise would not be approved under manual underwriting. Auditors will also check whether the scorecard could ...

Home Equity Conversion Mortgage loans remain widely available, thanks to the independent lenders that rallied to plug the gaps as major players bolted from the reverse mortgage market, an industry executive told lawmakers this week. In testimony during a House subcommittee hearing on FHA regulation of the HECM market, Jeffrey Lewis, CEO of Generation Mortgage Co., said MetLife’s departure from the market and closure of its traditional mortgage-origination business say nothing about the value of the HECM product to consumers. Lewis said MetLife’s decision was a strategic one and had nothing to do with ... (1 chart)

Deutsche Bank and its mortgage subsidiary MortgageIT this week agreed to pay $202 million to settle civil claims that they engaged in a decade of misconduct and deception to qualify risky mortgage loans for FHA insurance. The civil fraud lawsuit was brought against the two companies by the Department of Justice as a result of a referral from the Department of Housing and Urban Development. Filed in May last year, the government lawsuit sought damages and civil penalties under the False Claims Act. The suit alleges that MortgageIT, which Deutsche Bank acquired in 2007, used its authority as a direct endorsement lender (DEL) to ...

Genworth Mortgage Insurance has named Martin Klein as acting chief executive officer in the wake of former CEO Michael Frazier’s resignation last week. Klein is and remains the company’s chief financial officer. James Riepe was named nonexecutive chairman of the board. NMI Holdings, Inc., has raised $550 million in a private placement to provide mortgage insurance on loans to Fannie Mae and Freddie Mac. The company is in the process of obtaining approvals from state insurance regulators and the two government-sponsored enterprises. The MI unit will be called ...

Use of Blueberry Systems’ loan origination technology, RELAY, would result in an incremental reduction in lenders’ origination cost of $287.50 per mortgage loan, an analysis of the system concluded. Deployment of the RELAY loan origination system (LOS) would show a phased increase in return-on-investment in technology in which a lender effectively captures 35 percent of the potential cost benefit in the first year after implementation, according to an independent audit performed by MarketWise Advisors. The audit evaluated the effects of the implementation of the RELAY LOS to the work flow and...

Mortgage lenders large, small and in-between jockeyed for position against a backdrop of slowing new home loan originations during the first quarter of 2012. A new Inside Mortgage Finance market analysis and ranking found that an estimated $385.0 billion in new single-family mortgages were originated during the first three months of the year. That was down 3.8 percent from the fourth quarter. The two most striking trends were that 10 of the top 25 lenders posted increased production volume while the others reported declines – some of which were substantial – and nearly all top...(Includes two data charts)

Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...