Reporting on VA Loans Impacted by Natural Disaster. The Department of Veterans Affairs is cautioning servicers against reporting as delinquent VA loans that are impacted by a natural disaster. The electronic default notification (EDN) should only be reported prior to the 61st day of delinquency if the borrower intends to abandon the property or pursue an alternative to foreclosure, according to VA. Cite “property problems” as the reason for default, the agency added. On the 61st day of delinquency, servicers should use “casualty loss” as the reason for default when reporting the EDN. This will help VA identify loan defaults caused by a natural disaster. Texas USDA Guaranteed Housing Program See Increased Volume. The USDA guaranteed single-family guaranteed housing programs in the Lone Star State are experiencing significant volume increases, and consequently, ...

If anyone in the mortgage industry thought Ginnie Mae – and FHA for that matter – might take a kinder, gentler approach to the lenders it manages under the Trump administration, by now they are sorely disappointed. Over the past few weeks, Ginnie has suspended a mid-sized lender – 360 Mortgage Group – from its program and sent Executive Vice President Maren Kasper to the annual convention of the Mortgage Bankers Association to relay the message that agency stress tests are ...

The amount of single-family Ginnie Mae mortgage servicing rights increased a modest 0.9 percent during the third quarter, according to a new analysis and ranking by Inside FHA/VA Lending. Some $1.858 trillion of Ginnie mortgage-backed securities were outstanding at the end of September, a 6.2 percent gain over the previous 12 months. Loans guaranteed by the VA continued to be the fastest growing segment of the Ginnie market. Volume was up 1.3 percent from the end of June, hitting $630.9 billion, an 11.0 percent increase from the same time last year. The FHA segment remained far bigger: $1.114 trillion at the end of the third quarter. However, its growth rate has been slower: 0.7 percent from June and 3.9 percent compared to September 2017. Loan performance deteriorated slightly in both programs. Some 92.9 percent of FHA loans were current at the end of September, down from ... [Charts]

Participants in Ginnie Mae’s single-family mortgage-backed securities program may expect new policy changes, including servicer and credit ratings for the largest issuers, clarification of “appropriate sources of liquidity” and other financial requirements. The changes come as issuer liquidity continues to be a primary concern for Ginnie Mae, particularly with nonbanks now the dominant segment in the single-family MBS program. “We’re working on those policies right now,” said Leslie Meaux Pordzik, Ginnie’s acting senior vice president, Office of Issuer and Portfolio Management, at the Mortgage Bankers Association’s annual convention in Washington, DC, this week. Nonbanks account for nearly two-thirds of Ginnie MBS issuance and approximately 75 percent of FHA and VA lending. Nonbanks serviced a record 61.1 percent of outstanding Ginnie single-family MBS at the end of the ...

The Department of Veterans Affairs has asked the Office of Management and Budget to review a draft final rule that would establish major requirements for guaranteed cash-out refinance loans. The Economic Growth, Regulatory Relief, and Consumer Protection Act, which reformed the Dodd-Frank Act, gave VA the authority to regulate cash-out refis. The agency has 180 days from enactment to promulgate regulations. The final rule sets the parameters of VA cash-out home loans, to include defining net tangible benefit, recoupment and seasoning requirements. The Dodd-Frank reform act and Ginnie Mae have established similar requirements for Interest Rate Reduction Refinance Loans. IRRRLs and, to a much lesser extent, cash-out refis came under scrutiny due to loan churning or serial refinancing. Last year, a small group of lenders targeted servicemembers and veterans with VA loans to ...

Information technology improvement is the top priority of government lending programs in the coming months and into 2019. Agency representatives at the Mortgage Bankers Association’s annual convention in Washington, DC, said policy changes are in the works to enhance and improve operations, compliance and customer service. FHA Commissioner Brian Montgomery, who joined the agency four months ago, said IT modernization is his primary concern. A state-of-the-art IT system and advanced data analytics are needed to manage FHA exposures effectively, he said. Montgomery made clear FHA has no plans to build a proprietary system but is considering the idea of shared technology, possibly with VA and USDA; something based on Fannie Mae’s and Freddie Mac’s systems; or some off-the-shelf software. In his view, a modern IT system would have automated underwriting that provides ...

Community mortgage lenders are asking the U.S. Senate to consider with caution before voting on legislative language passed recently by the House of Representatives to address “orphan” VA streamline refinance loans. Specifically, the Community Mortgage Lenders of America asked the Senate to step back and allow some time for substitute language to be presented with input from the industry and the Department of Veterans Affairs. At issue is the wording in H.R. 6737, the Protect Affordable Mortgages for Veterans Act of 2018. The bill fixes a technical issue that prevented VA lenders from pooling certain VA Interest Rate Reduction Refinance Loans in Ginnie Mae mortgage-backed securities pools. Approximately 2,500 VA refi loans were affected by an inconsistency between the loan seasoning guidelines issued by Ginnie in late 2016 and provisions in the ...

The Department of Veterans Affairs will begin a new rulemaking on qualified mortgages to conform to Dodd-Frank reform act mandates. Observers say the move is simply housekeeping, since the previous QM interim final rule (IFR) requirements were rendered moot with the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act back in May. The new law, also known as the Dodd-Frank reform act, superseded the previous rule’s seasoning and recoupment requirements for VA Interest Rate Reduction Refinance Loans. Specifically, the act removed the category of rebuttable presumption for IRRRLs deemed as QM under the interim final rule. It also imposed new requirements that were not considered at the time the IFR was issued. The VA did not say whether changes were made ...

Bright’s Confirmation Delayed. With the Senate adjourning last week for the midterm elections, Michael Bright’s confirmation as president of Ginnie Mae will have to wait. President Trump nominated Bright, executive vice president and chief operating officer, last May and he was confirmed by the Senate Committee on Banking, Housing and Urban Affairs in August. Ginnie Mae has been without a permanent head since January 2017 when former president Ted Tozer stepped down. Bright has since been acting president of the agency. Both the House and the Senate will be back on Nov. 13 for a lame-duck session. President Trump Wants 5 Percent Budget Cuts from Cabinet Agencies. President Trump has directed his Cabinet secretaries to trim 5 percent from their respective agencies’ FY2019 budget request. Some agencies can do more than 5 percent, he suggested. It is unclear which of the ...

The credit characteristics of FHA loans pooled in Ginnie Mae mortgage-backed securities have gotten significantly riskier since the beginning of 2017, according to a new Inside Mortgage Trends analysis of Ginnie MBS data.