Fannie Mae and Freddie Mac last year securitized just $14.40 billion of refinance mortgages with high loan-to-value ratios and no private mortgage insurance coverage, according to a new analysis by Inside MBS & ABS. That was down 51.7 percent from the total for 2014 and amounted to a drop in the bucket compared to the high-water mark for the Home Affordable Refinance Program back in 2012. The sharpest downturn was...[Includes two data tables]

The FHA Mutual Mortgage Insurance Fund is projected to generate $9.1 billion in profits in FY 2017 but officials say they will not be reducing mortgage insurance premiums any time soon. Released this week, the White House’s proposed budget projects FHA will insure $204 billion in new forward, single-family mortgages with a negative credit subsidy of 4.42 percent for each loan, resulting in a projected profit of $9.1 billion. In fiscal 2016, the program is expected to generate $7.7 billion in profits. Separately, for the Home Equity Conversion Mortgage program, the proposed budget is projecting $18.5 billion in new reverse mortgage loans with a negative credit rate of 0.33 percent, netting $61 million in profits. During a budget briefing, Housing and Urban Development Secretary Julian Castro said there are no plans to change the current mortgage insurance premium. “We want to ensure our ...

On Jan. 20, the Department of Veterans Affairs published a Frequently-Asked-Questions (FAQ) guide to its qualified mortgage interim final Rule. We are picking up from where we left off last issue: Will VA still guaranty the loan if the Interest rate Reduction Refinance Loan (IRRRL) does not meet the recoupment period of less than 36 months, or does not meet the six-month seasoning requirements? Yes, VA will guaranty the loan. However, the loan will not have a safe harbor QM status. Instead, it will be a rebuttable presumption QM. VA does not condition the guaranty on satisfaction of all of the QM requirements. Lenders should consult their legal staff regarding safe harbor and rebuttal presumption QMs. What is the date that begins the seasoning and recoupment periods? The date of the note is the date on which legal obligations are established between borrower and lender. Therefore, to calculate the ...

The Blackstone Group this week continued its expanding reach into the mortgage industry, agreeing to buy – through an affiliate – Interactive Mortgage Advisors, Denver, one of the busiest sellers of mortgage servicing rights in the nation. No purchase price was revealed. IMA is being sold through an “asset” transfer. Its trading desk affiliate, Spurs Capital, is not part of the transaction, though the two firms will maintain a working relationship. In the fourth quarter, IMA brokered...

While the mortgage insurance industry patiently waits to see if the FHA will cut government MI premiums further this year, the sector is facing another potential threat to profitability: pricing concessions from the nation’s second largest retail originator, Quicken Loans. Moreover, Quicken – also the largest nonbank lender in the U.S. – is promising to pass on 100 percent of the cost savings to its customers, at least that’s what a company spokesman told Inside Mortgage Finance this week. “We take...

The FHA Mutual Mortgage Insurance Fund is projected to make $9.1 billion in profits in fiscal year 2017, but the Obama administration currently has no plans to cut FHA premiums. In fiscal 2016, the program is expected to generate $7.7 billion in profits, according to the White House proposed budget released this week. The administration projects FHA next year will insure $204 billion of forward single-family loans, with a negative credit subsidy of 4.42 percent for each loan, resulting in a projected profit of $9.1 billion. During a briefing this week. Julian Castro, secretary of the Department of Housing and Urban Development, downplayed...

A complaint has recently been filed in U.S. District Court for the Central District of California in an attempt to initiate a class-action case against PHH Corp. and Realogy Holdings Corp. and some of their subsidiaries and affiliates for allegedly deceptive and collusive practices in violation of the Real Estate Settlement Procedures Act. The case references and appears to be inspired, at least in part, by the enforcement action the CFPB brought against PHH in 2014 in which the bureau alleged the lender violated RESPA by illegally referring borrowers to mortgage insurance companies in exchange for kickbacks. In that case, PHH Corp. v. CFPB, the U.S. Court of Appeals for the District of Columbia is set to hear oral arguments on ...

For the first time since October 2008, Moody’s Investors Service upgraded two top private mortgage insurance companies to investment grade due to strong performance of new insurance written, cost savings and fewer losses. However, risk factors, including proposed capital regulations from the National Association of Insurance Commissioners, could adversely impact the ratings. Mortgage Guaranty Insurance Corp. and Radian Guaranty now have Baa3 ratings from Moody’s, although other rating servicers appear disinclined to follow. Both MIs continue to be rated below investment grade by Standard & Poor’s. The improved ratings come...

The Department of Veterans Affairs has issued guidance to help VA lenders understand better the agency’s interim final rule on a borrower’s ability to repay and qualified mortgages. The guidance was published in a frequently asked questions (FAQs) format to clarify and explain both the VA’s ATR and QM standards. The VA interim final rule became effective on May 9, 2014, the date it was published in the Federal Register. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires residential mortgage lenders to make a reasonable and good faith determination that the consumer has a reasonable ability to repay the loan according to its terms. The statute directed the Consumer Financial Protection Bureau to develop and implement an ATR/QM rule. Under the CFPB’s final rule, a qualified mortgage is a category of loans that have certain, more stable features that ...

The Department of Veterans Affairs and the U.S. Department of Agriculture Rural Housing Service have issued 2016 guidelines for lending to borrowers who have gone through a bankruptcy, foreclosure or a short sale. Under VA guidelines, borrowers emerging from a previous Chapter 7 bankruptcy may apply for a VA loan two years after the bankruptcy discharge. Borrowers with a Chapter 13 bankruptcy may qualify for a new VA loan if they have made at least 12 months of payments and the lender concludes that they have reestablished satisfactory credit. Before the bankruptcy-tainted borrower applies for a VA loan, however, the trustee or the bankruptcy judge must approve the new loan. The lender may put in a good word on behalf of the borrower provided the latter has met all requirements for a new loan. Borrowers may apply for a VA loan two years after a foreclosure or a short sale. In the case of ...