After some rough sailing, the FHA could use a bit of good news. In a recent audit, the Department of Housing and Urban Development’s Office of the Inspector General found that funds held by lenders have adequately reduced FHA’s payments of single-family mortgage insurance claims. Such funds include buydown funds remaining in escrow, unapplied assistance payments, rental income, escrow funds and others. The audit focused on the FHA’s Single Family Claims Branch and was performed in response to concerns that HUD may not have the ...

The Department of Housing and Urban Development’s Office of the Inspector General has announced a second round of mortgage note sales for this year under the expanded Distressed Asset Stabilization Program. Separate sales of approximately 20,000 severely delinquent loans have been scheduled for June 26 and July 10 as part of HUD’s effort to reduce its bulging inventory of foreclosed residential properties and to target relief to areas hit the hardest by foreclosures. HUD estimates the total unpaid balance of the loans in this sale at ...

Regulation by Mortgagee Letter. The Department of Housing and Urban Development this week urged House lawmakers to grant it statutory authority to make temporary changes to the Home Equity Conversion Mortgage program through mortgagee letters while working to formalize the change through rulemaking. In a hearing before the House Financial Services Subcommittee on Housing and Insurance this week, Charles Coulter, HUD deputy assistant secretary for single-family housing, sought specific authority to limit the amount that may be drawn from ...

Mortgage delinquency rates declined during the first quarter of 2013, according to an index compiled by Inside Mortgage Finance based on 19 lenders that service a total of $6.04 trillion in home mortgages. The overall delinquency rate index fell from 9.47 percent at the end of 2012 to 8.70 percent at the end of the first quarter. That was the lowest level since the third quarter of 2008. There were...[Includes one data chart]

Private mortgage insurers lost a little collective market share to the FHA and VA during the first quarter, although that may have been simply a timing distortion, according to a new market analysis and ranking by Inside Mortgage Finance. The more groundbreaking news is that the surviving private MIs, as a group, probably turned a profit during the first quarter of 2013. The four publicly traded companies reported a combined loss on their domestic MI business of just $14.6 million during the first quarter of 2013. Essent Guaranty, the fifth-largest MI in terms of new business, is...

The three percent points-and-fees cap for qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay rule is likely to push the private mortgage insurance industry away from products that emphasize upfront premiums and towards products built on monthly premiums. As the rule stands now, borrower-paid, non-refundable upfront MI premiums would be included in the points-and-fee calculation, but borrower-paid monthly MI premiums would not. There are two caveats: lenders may also exclude...

Overall FHA loan production dropped a tad during the first quarter of 2013 even as refinancing volume remained elevated, according to an Inside FHA Lending analysis of agency data. FHA lenders produced a total of $63.7 billion in new FHA-insured loans during the quarter, down 0.6 percent from the previous quarter but up 27.4 percent from the same period last year. FHA streamline refinancing rose 8.4 percent to $31.0 billion in the first quarter from the prior period. That was also up a whopping 97.8 percent from the same period last year. In a new report to Congress, the ... [2 charts]

The FHA paid out more in claims than it had collected in premiums and note and property sales as of Sept. 30, 2012, according to the Department of Housing and Urban Development’s quarterly report to Congress on the FHA Mutual Mortgage Insurance Fund. FHA disbursed $19.5 billion at the end of the third quarter last year mostly to pay claims and booked $16.7 billion in collections, resulting in an outflow of $2.8 billion, the report stated. Cash flows from operations over the last year covered 80 percent of default losses, the report noted. Premiums collected over four quarters ending Sept. 30, 2012, totaled ...

Wells Fargo will reportedly appeal a federal judge’s decision that a $25 billion agreement Wells and four other banks made with federal agencies and 49 state attorneys general last year to settle allegations of servicing malpractices does not make the banks immune to future claims under the False Claims Act. The Feb. 12 decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia said that the landmark settlement she had approved in April 2012 does not release the from future False Claims Act claims the government may bring. Dating back to the U.S. Civil War, the FCA provides for treble damages for fraud that results in ...

The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...