A provision on lender-placed insurance in the servicing segment of the FHA’s draft Single Family Housing Policy Handbook appears to contradict the agency’s previously stated position on LPI, according to the American Bankers Association. The ABA urged the FHA to retain the current policy regarding a lender’s discretion in requiring hazard and flood insurance for loans the agency insures. In a comment letter, the ABA expressed concern about the FHA’s new proposed standard for LPI, which could limit the amount of LPI coverage a lender or servicer could impose on a borrower to the outstanding balance of the loan. It would apply broadly to hazard insurance, including flood insurance. There are several problems with this approach, the ABA said. The group noted that Congress had established a standard which requires any home construction in a special flood hazard area (SFHA) to obtain “at least” ...

Final PMIERS Rule Expected in 1Q15. The Federal Housing Finance Agency has revised its timeline for publishing a final version of the Private Mortgage Insurance Eligibility Requirements, which Fannie Mae and Freddie Mac proposed in July at the direction of the FHFA. The PMIERS will establish capital and other requirements for private mortgage insurers. In a statement, industry trade group U.S. Mortgage Insurers said it has received word from the agency that the final PMIERS would not be published until at least late in the first quarter of 2015. The FHFA initially indicated that a final rule would be issued by yearend 2014. The USMI reiterated its support for an updated PMIERS. Mortgage Executives Concerned About G-Fee Increase. A survey of mortgage executives at this year’s Mortgage Bankers Association annual conference found 53 percent saying that ...

The Obama administration noted this week that it is less than keen on the idea of taking up an outgoing Democrat senator’s call to end the six-plus year conservatorships of Fannie Mae and Freddie Mac. Last week, Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, suggested the GSEs’ conservatorship be ended if legislative reform is not forthcoming.

Fannie, Freddie Conforming Loan Limits Mostly Unchanged for 2015. The Federal Housing Finance Agency this week said that conforming loan limits for Fannie Mae and Freddie Mac in 2015 would remain at current levels in most markets. For much of the country, the conforming loan limit for one-unit properties will remain at $417,000. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 and are calculated each year.

The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...

Thousands of military veterans in high-cost areas may be deprived of VA’s home-loan guarantee benefits unless Congress extends the current VA loan limits before the end of the year. Those loan limits expire on Dec. 31, 2014. The VA loan limits are based on median home values estimated by the FHA, providing loans up to 125 percent of local area median price. The program does not set a cap on how much a veteran can borrow to finance a home purchase but it does limit the maximum amount it can guarantee to 25 percent of the current loan limit. Veteran and industry groups are urging Congress to make the VA limits permanent. A VA spokesperson said the agency was not asked for a position on the issue since Congress did not put forward any bill in any of the hearings this year. “But as a general rule, VA wants to maximize the opportunities ...

Ginnie Mae is seeking comment on several proposed data collections, including those that would strengthen the agency’s ability to monitor participants in its mortgage-backed securities programs. Due to its growing concern over the influx of non-depository issuers into the single-family MBS program, Ginnie has proposed to collect more loan-level data to supplement the information already being collected and reported on a monthly basis. The proposed data collection consists of bankruptcy-related information (action type, case identifier, chapter type, bar date) as well as borrower-related information (borrower bankruptcy indicator, classification type, total mortgaged properties, counseling initiated indicator and credit score date). Other proposed new data include document custodian ID, type of insurance claim coverage, investor unpaid principal balance (UPB), adjustment to ...

The FHA Mutual Mortgage Insurance Fund has improved from a negative position to a positive $4.8 billion in FY 2014 after gaining nearly $6 billion in value over the last year, thanks to aggressive policy actions that led to improvements in key areas, according to an independent actuarial report sent to Congress this week. Overall, the fund showed a $21 billion improvement over the past two years due to changes the FHA implemented following the housing crisis, the report said. The changes led to improved underwriting standards for single-family mortgages, increased mortgage insurance premiums, stronger loss mitigation policies and higher recoveries, it noted. Aggressive policy actions also led...

The outgoing chairman of the Senate Banking, Housing and Urban Affairs Committee this week urged the head of the Federal Housing Finance Agency to look to a final resolution of Fannie Mae and Freddie Mac, while the progressives on the panel pressed the regulator and former Democrat congressman hard to approve principal reductions. “Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market,” said Sen. Tim Johnson, D-SD, during a hearing with FHFA Director Mel Watt this week. But if “Congress cannot agree on a smooth, more certain path forward I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.” Watt did not address...

Look for down-to-the-wire haggling during the remaining hours of the 113th Congress between leaders in the Republican-controlled House and the soon-to-be minority Democrat Senate trying to hash out a deal on “tax extender” legislation, including two expired mortgage-related provisions. Nearly a full year after a series of temporary tax incentives – including the Mortgage Forgiveness Debt Relief Act – expired at the end of 2013 due to partisan sniping and distinctly different legislative approaches of House and Senate tax-writing chairmen, both sides are being urged to close a deal forthwith. Internal Revenue Service Commissioner John Koskinen last month urged...