House Democrats are trying to persuade Housing and Urban Development Secretary Ben Carson to reinstate a 25-basis-point FHA mortgage insurance premium cut scheduled under the Obama administration, citing continuing improvement of the FHA Mutual Mortgage Insurance Fund. In a letter to Carson last week, 21 Democrats led by Rep. Joyce Beatty, OH, called upon the secretary to place homeownership within the reach of families, especially millennials and minorities, by lowering the FHA annual MIP rates to the same level that was announced during the waning days of the Obama administration. On Jan. 9, 2017, encouraged by the strong recovery of the MMI Fund, former HUD Secretary Julian Castro announced...
The Consumer Financial Protection Bureau plans to make some significant, but as yet unspecified, changes to its mortgage servicing rule sometime this fall, in response to concerns raised by the industry, the bureau revealed in a blog posting about its latest semiannual rulemaking agenda. The agency said it is “considering concerns raised by industry participants regarding a few substantive aspects of the mortgage servicing rule that we used in August 2016. These aspects may be posing particular complexities for implementation that were not anticipated in the course of the original rulemaking. We expect to issue a proposal to make one or more substantive changes to the rule in response to these concerns this fall – perhaps as early as September.” Edward Mills, an analyst with FBR Capital Markets & Co., said...
An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place.
The VA home loan guaranty program continued to grow faster than the FHA program during the second quarter of 2017, according to a new analysis and servicer ranking by Inside FHA/VA Lending. At the end of June, Ginnie Mae mortgage-backed securities pools included $548.04 billion of VA loans, a 3.3 percent increase over the previous quarter. Compared to a year ago, the volume of VA loans was up a hefty 15.6 percent. The $1.055 trillion of FHA loans in outstanding Ginnie MBS was still nearly twice the volume of VA loans. But the FHA total was up a more subdued 1.8 percent from March and by 5.4 percent from a year ago. One reason the VA market grows somewhat faster than the FHA is that it loses fewer loans to default. For starters, the VA delinquency rate is lower – 3.03 percent in the second quarter of 2017 vs. 5.52 percent for FHA. Over the past three and a half years, the ... [ Charts]
The House Appropriations Committee this week approved a FY 2018 spending bill for the Department of Housing and Urban Development with a $135 million allocation for information technology upgrades in lieu of a proposed lender fee. The set-aside also covers quality control and risk management improvements as well as other administrative costs. The recommended funding is $5 million more than the FY 2017 enacted level for administrative contract expenses and $25 million below the budget request. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary spending for FY 2018, down $487 million from the current level. The House bill authorizes $400 billion for loan guarantees under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $500 billion for Ginnie Mae. Ginnie will also receive $25.4 million for agency staffing, which is ...
An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...
The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...
The U.S. Department of Agriculture’s Rural Housing Service has clarified procedures for reevaluating approved lenders’ and servicers’ eligibility under the RHS Single Family Housing Guaranteed Loan Program. The guidance also provides procedures for updating lender information. The RHS intends to review and document lender eligibility in accordance with regulation and program requirements to protect government assets and minimize taxpayer losses. Office of Management and Budget regulations require federal agencies to reevaluate and record lender and servicer eligibility every two years. “For the [USDA single family loan guarantee program], it requires making sure that lenders and servicers participating in federal credit programs meet all applicable financial and program requirements,” wrote Richard Davis, acting RHS administrator. To meet the requirements, lenders must ...
The Department of Veterans Affairs is ratcheting up enforcement of its so-called Tidewater process to prevent veterans from paying more than the appraised value of the property when using a VA loan. In recent guidance, the VA reaffirmed its 2003 Tidewater Appraisal Initiative to help reduce the number of cases where appraisers have been asked to reconsider their initial appraisal, which had come in below the sales price. The guidance emphasizes procedures for improving communication of new sales data to VA fee and staff appraisers for a reevaluation of the low initial appraisal. “These guidelines should help limit the number of cases that reach the reconsideration-of-value phase and also provide a more timely response to those cases that are submitted for reconsideration,” the VA explained. The Tidewater procedure provides a designated “point of contact” (POC) the opportunity to ...
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