FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]

Clearer FHA guidance on loan defects may help lenders avoid problems but they do not provide legal protection against costly government false-claim lawsuits, according to mortgage industry stakeholders. Long-anticipated rules issued recently by the FHA explain how the agency intends to categorize loan defects identified during an individual loan-level review of endorsed single-family mortgages. The loan-defect assessment methodology or “defect taxonomy” was first unveiled in September 2014 as part of the FHA’s Blueprint for Access, which outlined steps the agency is taking to expand lending to underserved and first-time homebuyers. Combined with the updated loan-certification language used by lenders to warrant compliance with FHA rules and the new Single Family Policy Handbook, FHA plans to use the taxonomy to create a stronger quality assurance program. With better quality ...

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

Rural borrowers will be paying a higher upfront fee for mortgage loans with a Rural Housing Service guaranty, the U.S. Department of Agriculture has announced. In an advance notice, the USDA said it will raise the upfront guaranty fee for loans originated under the RHS’ Single Family Housing Guaranteed Loan Program in FY2016. For purchase and refinance loans, the upfront guaranty fee will change from 2.00 percent to 2.75 percent of the loan amount. The annual fee will remain at 0.50 percent. The fee increase will apply to guaranteed loans obligated on Oct. 1, 2015, through Sept. 30, 2016, the USDA said. A loan is obligated when the USDA has approved a complete loan-application package and issued a conditional commitment for a single-family housing loan guarantee to the USDA lender. The new fee will apply to loan guaranty requests submitted to the USDA prior to Sept. 30, 2015, without a ...

The Internal Revenue Service is rejecting some lender requests for tax-return transcripts due to a recent data breach, warned the U.S. Department of Agriculture’s Rural Housing Service in a lender alert. According to the RHS, the IRS action is meant to deter any fraud that might result from identity theft. The IRS has not responded to a request for confirmation or comment as we went to press. An IRS tax transcript is required as part of a complete loan-application package submitted to a mortgage lender to request a conditional loan commitment. The transcript contains the borrower’s tax record for the current tax year and three prior processing years. The RHS, which guarantees rural housing loans under its Single Family Housing Guaranteed Loan Program (SFHGLP), has issued guidance if a transcript request from a lender returns with the following message: “Due to limitations, the IRS is unable to ...

Lenders are accounting for an increasing share of home purchase financing as investors decrease their largely cash buying. Purchases by first-time homebuyers are rising, helped by FHA financing. “First-time homebuyers rarely buy homes with cash and with their increasing participation in the housing market, we expectedly see the proportion of cash-financed transactions falling,” said Tom Popik, research director of Campbell Surveys. The non-cash share of financing for home purchases increased...

Federal financial institution regulators have approved a long-anticipated final rule that revises mandatory flood-insurance and escrow requirements as well as force-placed provisions. The Federal Deposit Insurance Corp. board of directors adopted the final rule unanimously. It combines two proposed rules issued in 2013 and 2014 that would implement certain provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 and subsequent changes made by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). Biggert-Waters exempts...

The VA maintained a sizeable lead in first-lien mortgage refinancing over FHA and private mortgage insurers in the first quarter of 2015 but yielded to both in purchase originations during the same period. According to the Inside Mortgage Finance database, mortgage lenders originated approximately $221.0 billion of refi loans in the first quarter, a 51.4 percent increase from a revised fourth-quarter production estimate of $146.0 billion. Of first-quarter mortgages securitized by Fannie Mae, Freddie Mac and Ginnie Mae, refi loans comprised 61.4 percent, up sharply from 37.6 percent for all of 2014. VA streamline refis accounted for $20.4 billion while FHA refis made up $12.2 billion of refis pooled in agency mortgage-backed securities. FHA’s refi production jumped 57.8 percent in the first quarter. On the other hand, refi loans with private MI accounted for $14.2 billion produced during the ...

First Tennessee Bank’s agreement with federal agencies to pay $212.5 million to resolve allegations of violation of the False Claims Act is the latest proof of the government’s unrelenting pursuit of FHA lenders over underwriting and quality control issues. The settlement once again demonstrates the federal government’s commitment to combat FHA fraud using the FCA to recover taxpayer losses, according to an analysis by Boston law firm Greene LLP. “[The Department of Housing and Urban Development] made a point of saying that this behavior is exactly what led to the financial crisis and housing market downturn,” Greene’s compliance attorneys said. HUD and the Department of Justice have vowed to continue to pursue and hold accountable lenders who put profits ahead of their customers and legal obligations, the attorneys added. According to the DOJ, First Tennessee, a regional bank, admitted ...

Consumer education is the key to VA’s growing origination volume, according to a top executive of a VA-certified lender. “It has to do more with increased awareness of VA loans and their benefit to veterans,” said Jonathan Schrum, vice president at Commerce Home Mortgage, a VA lender in Huntington Beach, CA. Awareness comes with education, and one can go to any network or cable channel or print publication and see advertisements for loans with a VA guaranty, said Schrum. “There are many veterans and service members out there who don’t know what loan programs are available to them and what they can do,” he observed. “So I think it’s word of mouth, talking about it ourselves and getting the word out there about VA loans as much as we can.” The VA loan is such a specific product that a borrower needs to know what it is – the funding, fees, percentages for disabled vets – they need to ...