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 ...

Private mortgage insurers appear to be holding on to the gains in market share they began to accumulate in the middle of last year, according to a new Inside Mortgage Finance analysis. An estimated $108.61 billion of home mortgages originated in the first quarter of this year carried primary mortgage insurance, an increase of 9.4 percent from the previous quarter. That compared to a 3.8 percent drop in total single-family mortgage originations over that period. The apparent jump in primary MI market penetration to 28.2 percent is skewed somewhat by the process for...(Includes two data charts)

Private MI officials say FHA pricing changes have helped the industry regain some market share from the agency, but future gains may depend on how the federal government eventually changes its role in the mortgage market. After its most recent pricing adjustment in April of this year, the FHA does not expect to make further changes in its insurance premiums, said Charles Coulter, deputy assistant secretary at the FHA, during this week’s secondary market conference sponsored by the Mortgage Bankers Association. “We are an average pricer, and that alone creates opportunities” for private MIs, he said...

Genworth Financial this week announced some price and underwriting guideline adjustments aimed at reducing the cost of insurance for most mortgages and making the private mortgage insurer more competitive in the marketplace. Effective for applications received on or after May 14, Genworth is reducing monthly and single premium MI rates (borrower paid and lender paid), subject to state approvals. For monthly premium MI, rates are being lowered for all loans with loan-to-value ratios less than or equal to 95 percent. Rates for LTVs above 95 percent will remain the same, the company said, although new adjustments for...