The reverse mortgage lending industry is working with the Department of Housing and Urban Development to implement two policy changes that would strengthen the FHA’s Home Equity Conversion Mortgage program. One policy change involves the development of a new HECM option that combines features of the fixed-rate, full-draw HECM Standard and the HECM Saver, according to Peter Bell, president and chief executive officer of the National Reverse Mortgage Lenders Association. HUD eliminated the standard 30-year, fixed-rate HECM in April because ...

Lenders must consider debt disputes, collection accounts and judgments in analyzing a borrower’s credit worthiness because they are indicators of the borrower’s ability and willingness to meet his or her credit obligations, according to the FHA. In recently issued guidance, the FHA said lenders should analyze all collections and judgments, past and present, because they may indicate a borrower’s disregard for credit obligations. Such analysis helps decide whether a loan should be approved for FHA insurance, the agency said. The FHA amended its guidance on collections and disputed accounts in Mortgagee Letter 2013-24, and further clarified ...

The mortgage banking industry has commended the Senate Committee on Banking, Housing and Urban Affairs on passing the FHA Solvency Act earlier this month but raised concerns about the bill’s indemnification provision. In a letter to Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, David Stevens, president of the Mortgage Bankers Association, said some deserving borrowers are being shut out of FHA because of strict credit overlays that lenders add to avoid indemnification risks. Stevens said when the Department of Housing and Urban Development is able to require ...

Continued abuses has caused single-family loan originations to remain a top priority for reviews and targeted audits, according to the Department of Housing and Urban Development’s Office of the Inspector General. A specialized audit program has been developed to target lenders, considering a number of high-risk indicators, the OIG said. Although the agency did not elaborate, it did note Congress’ keen interest in FHA solvency and in eradicating policies and practices that contribute to the agency’s current financial woes. The OIG said it plans to ...

The VA home loan program was up 23.5 percent in the first six months of 2013, although activity slowed by 1.5 percent from the first quarter, according to Inside FHA Lending’s analysis of VA data. The VA reported $74.4 billion in purchase and refinanced loans during the first six months, with refis accounting for 52.9 percent of total volume. The program’s share of the overall mortgage insurance market fell to 22.2 percent in the second quarter from 24.3 percent in the previous quarter. Combining their year-to-date results, the FHA and VA reported a combined ... [1 chart]

Ginnie Mae has changed certain office names to reflect the activities and responsibilities of the office more accurately. For example, the Office of Mortgage-Backed Securities is now known as the Office of Issuer and Portfolio Management. The Office of Program Operations name also has been discarded in favor of the Office of Securities Operations. The MBS Guide, including the summary of addresses and all forms and appendices, has been updated to reflect the office name changes. In addition, the address for overnight delivery of new MBS issuer applications ...

The House Financial Services Committee this week reported out a legislative package of housing finance system reforms, including measures designed to reduce FHA’s role in the mortgage marketplace, strengthen lender oversight and avoid a potential taxpayer bailout. The bill, Protecting American Taxpayers and Homeowners Act (H.R. 2767), passed by a vote of 30 to 27 despite mixed responses from industry experts, academics, financial trade associations and consumer advocates. Critics called for changes. Offered by Rep. Jeb Hensarling, R-TX, chairman of the Financial Services Committee, the bill proposes ...

FHA officials, industry groups and consumer advocates appear to be leaning more towards a Senate FHA reform bill that is moderate and far less ambitious than legislation approved by the House Financial Services Committee this week. Introduced by Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, the FHA Solvency Act of 2013 “focuses on the right issues, not like the House bill, which tries to dramatically alter the program and affect borrower eligibility,” said an industry observer. Testifying as the sole witness at a Senate Banking Committee hearing on FHA solvency this week, FHA Commissioner Carol Galante said ...

A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...

The FHA is trailing Fannie Mae, Freddie Mac and the Department of Veterans Affairs in the disposition of real estate-owned properties, according to a new study from the Government Accountability Office. The study found that FHA’s net proceeds from REO sales from January 2007 through June 2012 were about 4 to 6 percentage points lower than Fannie’s and Freddie’s returns. The differences in combined returns between FHA and the government-sponsored enterprises persisted at an estimated 2 to 5 percent even after controlling for differences in value, location, market conditions and other relevant factors. In addition, the FHA took about ...