The Federal Home Loan Banks appear to be eyeing a bigger share of the government-backed lending market with the announcement of a new servicing-release option for FHA, VA and rural housing loans sold into the Mortgage Partnership Finance program. The addition of a servicing-released option from Nationstar Mortgage, a top-10 mortgage servicer, to an already existing servicing-retained execution will give participating lenders greater flexibility in pricing and selling government-backed mortgages they have originated into the secondary market, said Matt Feldman, president of the Chicago FHLB. Previously, program participants were required...

The FHA has issued temporary guidelines to ease the condominium approval process and increase the number of condo projects eligible for FHA financing. The guidelines take effect immediately and will be in place for one year to give FHA enough time to write and implement a more comprehensive rule. With the issuance of the guidelines, FHA anticipates an increase in the pool of FHA-eligible condo projects, which in turn will provide more affordable housing options for first-time and low- to moderate-income borrowers. The interim guidelines modify three key areas where lender complaints have been common. First, the guidelines revise requirements for recertification of condo projects. FHA-approved condo projects require recertification after two years to ensure that the project is still in ...

The private mortgage insurance industry did more business during the third quarter than it has in any period since the housing market came unglued in early 2008 and rolled to another solid round of financial results, according to an Inside Mortgage Finance ranking and analysis. But early indicators suggest the FHA and VA government insurance programs continue to provide stiff competition in the primary MI market. While neither government agency has released new business data for the third quarter, trends in the Ginnie Mae program suggest that the private MI share of new primary coverage drifted down to 33.8 percent in the third quarter, the lowest it’s been since the beginning of 2013. Mike Zimmerman, senior VP for investor relations at Mortgage Guaranty Insurance Corp., said...[Includes three data tables]

New agency issuance of single-family MBS declined in October as a result of a slowdown in the purchase-mortgage market, according to a new Inside MBS & ABS analysis and ranking. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of $107.19 billion of single-family MBS last month, a 5.6 percent slip from September’s volume. The flow of purchase mortgages securitized by the three agencies was down 9.6 percent for the month, while refinance volume was up 2.6 percent in October. Some of the strength in refi activity is...[Includes two data tables]

Fannie Mae and Freddie Mac continued to reduce their retained mortgage portfolios during the third quarter by a combined $35.2 billion, a period in which Fannie reported a $2.2 billion gain in earnings while Freddie suffered a $475 million loss. Freddie Mac noted that its investments in less liquid assets were $114.2 billion at the end of the quarter, down 8 percent or $10.1 billion from the second quarter. The government-sponsored enterprise attributed this to its ongoing portfolio liquidation and the sales of $3.4 billion of non-agency MBS. Freddie also securitized $4.0 billion of single-family re-performing and modified loans. Since being placed in conservatorship, Fannie and Freddie have been...[Includes one data table]

Overly conservative accounting, subpar servicing, lack of claims data and a desire to protect taxpayers from mortgage-related losses contributed to the material flaws in Ginnie Mae’s FY 2014 financial statements. Ginnie Mae is working to implement a recommendation by the Department of Housing and Urban Development inspector general to use generally accepted accounting principles (GAAP) in restating its 2014 financial statement and adjusting affected prior-year financials, according to Ted Tozer, president of the agency. Tozer noted...

American International Group this week cleared the air regarding a potential spinoff of its profitable mortgage insurance division, saying it likes the MI business very much and considers it a “core” asset. In other words, it’s not for sale. Then again, during AIG’s third-quarter earnings call, President and CEO Peter Hancock left open the door to a possible sale of United Guaranty, saying that “over time” the company likes to maintain its flexibility and that if the “right offer to monetize assets” came along, it would ponder a bid. “It gives...

The overall delinquency rates for VA and FHA mortgage loans rose in the third quarter of 2015 due to increases in both 30-60 and 60-90 day delinquencies, according to agency data. Approximately 96.5 percent of VA loans in Ginnie Mae mortgage-backed securities remained current in the third quarter, down slightly from the second quarter, suggesting more borrowers have become past due during the period. VA 30-day and 60-day delinquencies rose to 2.44 percent and 0.23 percent, respectively, while the percentage of VA loans 90 days or more past due fell to 0.84 percent. The remaining principal balance of securitized VA loans was $426.8 billion, up 5.1 percent from the prior quarter. Meanwhile, the share of FHA loans in Ginnie Mae pools that were current dropped to 93.8 percent in the third quarter from 94.2 percent in the prior quarter. FHA 30-day delinquencies increased to ... [ 1 chart ]

Servicing of FHA loans pooled into Ginnie Mae mortgage-backed securities rose 2.1 percent in the third quarter of 2015. Three megabanks in the top five-servicer tier accounted for a significant share of the market. Ginnie Mae servicers of FHA collateral reported $969.0 billion outstanding at Sept. 30, with Wells Fargo accounting for 27.9 percent of total servicing volume. Wells Fargo, Chase Home Finance (#2) and Bank of America (#5) combined to service 39.3 percent of FHA outstanding as of the end of the quarter. PennyMac Corp. closed the quarter with a $57.7 billion FHA servicing portfolio, good enough for third place and 6.0 percent of the market. Fourth-ranked NationStar Mortgage reported a $53.6 billion servicing portfolio at the end of the ... [ 1 chart ]

A bipartisan group of lawmakers is clamoring for reform of existing FHA condo rules, saying that temporary guidance issued by the Department of Housing and Urban Development in 2012 has failed to boost the condominium market. In a letter to HUD Secretary Julian Castro, 69 House members called for policy changes that would relax FHA restrictions to facilitate the purchase and sale of condominiums. Condos are the most affordable homeownership option for first-time homebuyers, small urban families and elderly Americans, the letter pointed out. “The FHA certification process can be daunting, especially for smaller properties and those without professional management,” it stated. “It takes significant time and resources to collect the required information and provide the necessary paperwork to become certified, and this must be done every two years.” Lapsed condo certifications are also a problem because ...