Ginnie Mae assured the mortgage industry that it would accept so-called VA orphan loans as long as they satisfy the terms of corrective legislation passed by the House Financial Services Committee recently. “As long as the mortgage loan complies with the law, we will accept it and put our guarantee on it,” said an agency spokesperson in response to an Inside FHA/VA Lending inquiry. Ginnie’s assurance provides certainty to a subset of VA loans that have been in limbo since June because they could not be delivered into Ginnie mortgage-backed securities. Lawmakers responded to industry calls for a legislative fix last week by voting overwhelmingly to approve H.R. 6737, the “Protect Affordable Mortgages for Veterans Act of 2018.” Introduced by Rep. Lee Zeldin, R-NY, the bill would eliminate the seasoning requirements in the recently enacted Dodd-Frank Act reform legislation, which conflicted with ...

It looks like the Department of Housing and Urban Development will not be able meet its September target date for rolling out its long-awaited FHA condominium reform rule. Such is the consensus among stakeholders whose hopes were raised when HUD Secretary Ben Carson told the House Financial Services Committee in June that he would be issuing the rule this month. “HUD and the Office of Information and Regulatory Affairs (within the Office of Management and Budget) want to release the rules with the updated Single Family Handbook and they are still working on that,” said a real estate industry executive. He added that despite what Carson said at the committee hearing, “September is not likely for a release.” As of press time, the final condo reform rule had not yet been delivered for OMB review, a process that in the past has taken months to complete. In contrast, it took about a ...

James Lockhart, the Federal Housing Finance Agency director who headed the regulator when the government takeover of Fannie Mae and Freddie Mac occurred in September 2008, told Inside The GSEs he never dreamed the conservatorships would last a decade. “We thought it might go a couple of years and Congress would act,” he said. Lockhart added philosophically: “Perhaps, the conservatorships worked too well.” Lockhart, who eventually became a vice chairman of WL Ross & Co., and played a key role in that firm’s mortgage-related investments, said he’s happy that the two are now steadily profitable. But he...

The bulk of the House Financial Services Committee hearing last week focused on the lack of reform and how the GSEs’ growing role in the housing market makes them more of a liability to taxpayers today than they were before the housing crisis. The hearing was held on September 6, the 10-year anniversary of the conservatorship that has lasted longer than anyone expected. Retiring chairman of the committee Rep. Jeb Hensarling, R-TX, called the date the “not so happy anniversary” and said while reform is critical, it’s proven illusive.Hensarling introduced a bipartisan bill during the hearing, the Bipartisan Housing Finance Reform Act of 2018, but implied it likely won’t go anywhere in this Congress.

More than two dozen trade groups signed an open letter to the administration and Congress urging them to preserve what works in the current housing-finance system and get more private capital back into the market. “There is a pressing need to ensure that the existing progress is cemented rather than cast aside,” said the groups, which include the Mortgage Bankers Association, the Community Home Lenders Association, the Community Mortgage Lenders of America, Independent Bankers of America and the Credit Union National Association. The groups want to make sure that any effort to change the role the GSEs play doesn’t result in market disruptions that reduce access to credit in the single-family and multifamily space.

Dropping the debt-to-income cap for qualified mortgages is one way to level the playing field between the GSEs and the private market, according to the Urban Institute. With the somewhat controversial GSE patch in qualified mortgages expiring in January 2021, talk has turned to coming up with alternatives for retaining or replacing this special treatment given to Fannie Mae and Freddie Mac loans. The GSE patch allows Fannie and Freddie to purchase loans with debt-to-income ratios exceeding 43 percent as long as they meet other QM rule requirements set forth by the Consumer Financial Protection Bureau.

Fannie’s Latest NPL Sale. Fannie Mae announced its latest sale of non-performing loans this week, including the company’s 14th Community Impact Pool. The five larger pools include approximately 10,700 loans totaling $1.95 billion in unpaid principal balance. The Community Impact Pool contains approximately 80 loans totaling $28.7 million in UPB. The Community Impact Pool consists of loans geographically located in New York City. Bids are due on the five larger pools on October 4 and on the Community Impact Pool on October 23. Investors Unite on 10-Year Conservatorship Anniversary. The GSE shareholders group said 10 years later, the GSEs remain wards of the state. “After...

If Rep. Jeb Hensarling’s new housing finance reform bill becomes law, the common securitization platform of Fannie Mae and Freddie Mac and the “disclosure framework from Common Securitization Solutions” will be transferred into a private, nonprofit corporation or “exchange.”

The Mortgage Bankers Association is working to reduce the speed talking and fine print that tend to accompany advertisements for mortgages. Currently, ad-disclosure requirements for mortgages vary by state. In August, Illinois became the first state to adopt a uniform ad-disclosure protocol supported by the MBA. Mortgage ads in the Prairie State must now include a reference to the Nationwide Multistate Licensing System and Registry’s consumer access website and cite ...

Rep. Jeb Hensarling, R-TX, released his much-anticipated proposal, the Bipartisan Housing Finance Reform Act of 2018, for housing-finance reform last week but industry observers say it has little or no chance of making any headway. In fact, Hensarling said if reform stalls in this Congress or the next, he would advocate for the administration to tackle reform when a new Federal Housing Finance Agency director is named in January. He released the “discussion draft” the day of a House Financial Services Committee hearing on Sept. 6, the 10-year anniversary of the conservatorship. The bill would transition to a system where qualified mortgages backed by government-approved guarantors with regulated capital can access the...