The Rural Housing Service of the U.S. Department of Agriculture has proposed changes to its single-family housing guaranteed loan program to help certain lenders navigate the loss-claim process. Specifically, the RHS proposes to streamline the loss-claim process for lenders that have acquired title to property through voluntary liquidation or foreclosure. Under current rules, when a lender acquires title to a real estate-owned property, the RHS requires the lender to submit a plan to maintain and market the property. Any change to the plan must be approved by RHS. RHS also provides the lender two opportunities to file a loss claim on an REO property: When the property sells during the permissible marketing period, or after the period (typically from nine to 12 months) if the REO property does not sell. The agency proposes to make changes to the loss-claim payment process when a lender acquires ...

Big Four accounting firm Deloitte has paid $149.5 million to the federal government to settle allegations of misconduct in connection with its role as the independent outside auditor of defunct FHA lender Taylor, Bean & Whitaker. The settlement amount includes $115 million in restitution paid to the Department of Housing and Urban Development on Aug. 13, 2018, according to the HUD inspector general. The rest of the payment went to the Department of Justice, which brought the charges on behalf of the government. Deloitte admitted neither to any liability nor to wrongdoing. TBW was an FHA direct endorsement lender and a Ginnie Mae-approved mortgage-backed securities issuer and servicer. It originated, underwrote, acquired and sold mortgages to Freddie Mac and other investors, which used the loans to support MBS issuance or held them as investments. In its heyday, TBW was one of the ...

The profitability of mortgage servicing is under pressure these days due to factors that keep costs high, but there is a better way to reduce costs and conveyance time, especially for FHA foreclosed loans, according to a white paper from Dimont. Integrated processing of insurance claims and conveyance-related activities can dramatically reduce servicers’ operating costs and penalty risks on FHA and other investor-backed loans, said the Dallas-based technology solution provider. The white paper, “The Power of Integrated Claims & Conveyance Services,” lists factors that could significantly affect a servicer’s profitability, such as low origination volume, declining delinquency rates and other factors, like severe weather patterns. Servicing costs for performing loans peaked in 2015 when the average cost for servicing a single-family loan reached $181 per loan – the highest cost since the ...

Ginnie Mae issuers produced $36.68 billion of new single-family mortgage-backed securities last month, a modest 5.0 percent gain from July, according to a new Inside FHA/VA Lending analysis and ranking. Through the first eight months of the year, Ginnie issuance was down 11.0 percent from the same period in 2017. The MBS figures do not include FHA home-equity conversion mortgages, and loan amounts are truncated to the lowest $1,000. Purchase mortgages accounted for 75.6 percent of new issuance in August, although volume was up just 1.9 percent from July’s level. On a year-to-date basis, the purchase-mortgage share rose from 65.7 percent in 2017 to 70.0 percent for the first eight months of this year. Total volume, however, was down 5.1 percent. The refinance market has been more wobbly. As of the end of August, refi volume totaled $65.87 billion, down 26.2 percent from the ... [Chart]

Home Equity Conversion Mortgage originations fell dramatically in the second quarter, raising the possibility of a long reverse-mortgage winter in 2018, according to an Inside FHA/VA Lending analysis of HECM data. HECM production fell a whopping 40.9 percent in the second quarter from the previous period. Total HECM originations stood at $8.6 billion by the six-month mark, down 8.3 percent from the prior year. Traditional HECMs, which exclude purchases and refinances, accounted for 80.5 percent of FHA-insured reverse mortgages originated during the first half of 2018. The amount of funds available at loan origination for the first six months totaled $4.7 billion. Analysts blame the low HECM originations on the new lower Principal Limit Factors (PLFs) for HECMs, which became effective in FY 2018. Under the HECM final rule issued last year by the Department of Housing and Urban Development, principal limits [Chart]

Rising interest rates continue to benefit the Federal Home Loan Banks whose net income was up by more than 10 percent for the first half of the year, according to a report released this week by Moody’s Investors Service. FHLBank net income was $1.83 billion in the first six months of 2018, up from the $1.67 billion a year earlier. This reflected a 10.45 percent increase that was driven by growth in net interest income, partially offset by lower non-interest income. Moody’s noted that yields on both advances and liabilities increased because of higher interest rates. Overall, the net interest margin improved nine basis points to 0.47 percent from the same period in 2017.

Commercial banks and savings institutions generated $4.26 billion in mortgage-banking income during the second quarter of 2018, according to a new Inside Mortgage Trends analysis of call reports. Second-quarter net income from mortgage production, loan sales and servicing was down 1.0 percent from the first three months of the year. But through the first six months of 2018, the industry’s mortgage banking income was up 18.8 percent from ... [Includes one data chart]

Privately held mortgage firms looking to raise capital by selling stock to the public face a grim reality these days, but alternatives still exist, namely private placement deals. Case in point is RoundPoint Mortgage, Charlotte, NC, the nation’s 15th largest subservicing vendor. Earlier this week, RoundPoint completed a $94 million capital raise accomplished through the sale of convertible preferred stock. The investor in the private placement was not identified. The company ...

After losing an average of $118 per loan originated in the first quarter of 2018, nonbanks made some adjustments and turned profits in the second quarter, according to a survey from the Mortgage Bankers Association. Some 343 nonbanks reported a net gain of $580 on each loan they originated in 2Q18. After an exceptionally weak start to the year, production profitability improved in the second quarter as volume picked up from the spring home buying season,” said Marina Walsh ...

As residential lending goes, so goes the fortunes of the Mortgage Bankers Association, the residential finance industry’s largest trade organization. MBA saw its revenues decline by 8.2 percent to $62.0 million in fiscal 2017 as its investment income plunged to $719,773 from $7.9 million the year prior, according to the trade group’s form 990 tax return. MBA’s “profit” (revenue less expenses) declined by 33.5 percent in FY 2017 to $12.7 million, a drop of $6.5 million ...