The Department of Housing and Urban Development is once again asking for authority to charge lenders an administrative support fee to fund information technology upgrades and administrative functions at the FHA, a bid that was shot down by Congress last year. As part of the Obama administration’s fiscal 2016 budget proposal, HUD wants to charge lenders up to $30 million in fees, which would be credited as offsetting collections to the FHA’s Mutual Mortgage Insurance program account. The mortgage industry cautioned...

Members of Congress on both sides of the aisle continue to work on legislation to reform the GSEs but with strong differences between the parties, there remains little optimism that GSE reform legislation will be enacted in the next two years. “While I realize the odds are long and the political issues to overcome are immense, I do believe that reforming this broken marketplace must remain a priority of this committee,” said Rep. Scott Garrett, R-NJ, at a hearing this week by the House Financial Services Committee. Garrett chairs the subcommittee on capital markets and GSEs. Garrett said previous GSE reform bills introduced on both sides of the aisle in Congress in recent years provide a foundation for what he ...

Republicans in the House Financial Services Committee and Mel Watt, director of the Federal Housing Finance Agency, clashed regarding funding of affordable housing funds by the GSEs at a hearing this week. In November, the FHFA directed Fannie Mae and Freddie Mac to begin setting aside funds in 2015 to be allocated to the Housing Trust Fund and the Capital Magnet Fund. The contribution formula calls for Fannie and Freddie to send amounts equal to 4.2 basis points of the principal balance of their new business to the funds, about $290 million based on the GSEs’ activity in 2014. Watt’s directive reversed a suspension that his predecessor, Ed DeMarco, had implemented. Watt repeatedly cited the Housing and Economic Recovery Act ...

Production of loans with a VA guaranty was moderately strong in the third quarter of 2014, thanks to lower rates and increased demand for the no-downpayment loans, according to Inside FHA Lending’s analysis of the latest agency data. A 14.1 percent quarter-to-quarter surge helped the industry end last year’s first nine months with a total of $76.3 billion in VA loans, mostly purchase home mortgages taken out by a younger generation of war veterans. VA streamline refinancing also accounted for a substantial chunk of originations, 19.2 percent. Volume jumped from $19.5 billion in the first quarter of 2014 to $26.5 billion the following quarter. Lenders closed out the third quarter with $30.2 billion. Stanley Middleman, chief executive officer of Freedom Mortgage, said VA lending is on the upswing, driven by low interest rates. He thinks the VA home loan guaranty program has been ... [ 1 chart ]

Analysts are expecting Ginnie Mae prepayments to increase moderately in the wake of last week’s announcement that FHA is reducing its annual mortgage insurance premium by 50 basis points. Specifically, the annual MIP would be lowered 50 bps for 30-year fixed-rate FHA mortgages, although the new charges continue to vary depending on loan-to-value ratio and loan amount. Streamlined refinances of FHA loans endorsed before June 2009 are not covered by the new pricing, nor are 15-year FHA mortgages. The timing of the announcement reflects...

The Congressional Budget Office in December opened a new approach to GSE reform that could become a middle ground between GOP hardliners who want to entomb Fannie Mae and Freddie Mac and lawmakers who want to keep some form of the current system. One way to reduce the GSEs’ footprint in the mortgage market would be to auction a limited supply of Fannie and Freddie mortgage-backed securities guarantees to the highest bidders, the CBO suggested ...

The head of the House Financial Services GSE Subcommittee called on the Federal Housing Finance Agency to look into whether Fannie Mae and Freddie Mac have resumed lobbying and other political activities, which were barred when the GSEs were put in conservatorship in 2008. Political activity by Fannie and Freddie has long been a bone of contention for many GOP members of Congress, who believe that lobbying, campaign contributions and advertising ...

Conversations with Capitol Hill insiders, industry lobbyists and trade group representatives suggest the CFPB is going to face a double-barreled threat from a Republican-controlled U.S. Senate and House of Representatives in the 114th Congress that convenes in January. On the one hand, the GOP is expected to be aggressive in holding numerous oversight hearings on a number of issues having to do with the CFPB. On the other hand, Republicans also are likely to push multiple pieces of legislation relating to the bureau and its rulemaking. A number of tweaks, revisions and technical corrections to the Dodd-Frank Wall Street Reform and Consumer Protection Act are expected as well. Elaborating on the legislative front, Joe Pigg, vice president and senior counsel ...

The Department of Veterans Affairs announced new, lower loan limits for 2015 after Congress decided not to extend the agency’s current maximum lending limits beyond 2014. The current limits will expire on Dec. 31. Under new guidelines, the maximum guaranty amounts for VA loan limits in 2015 will match the lower conforming loan limits established by the Federal Housing Finance Agency for the government-sponsored enterprises next year. These limits range from $417,000 to $625,500, depending on where the borrower is located. VA’s loan limits are tied to the county-based limits established for conforming loans backed by Freddie Mac. Freddie’s loan limits are calculated based on median house prices in counties across the nation. In recent years, VA’s high-cost loan limits have exceeded Freddie’s due to statutory authority granted under the Housing and Economic Recovery Act of 2008. The VA authority was ...

The Inspector General of the Department of Housing and Urban Development has announced a $300 million recovery from an earlier settlement between SunTrust Mortgage and the Department of Justice, Consumer Financial Protection Bureau, the HUD Office of the Inspector General, and 50 state attorneys general. The settlement resolved allegations of violations of FHA requirements in a joint complaint filed on June 14, 2014, by federal and state enforcement agencies. The suit against SunTrust alleged misconduct related to the origination and servicing of single-family residential mortgages. The problem loans were uncovered during a routine OIG review of targeted FHA-insured loans. According to the suit, as an FHA direct endorsement lender, SunTrust certified poorly underwritten loans for FHA insurance from January 2006 through March 2012, despite its knowledge of ...