New pool level data issued by Ginnie Mae reveal a rising share of FHA-insured loans that have refinanced with grandfathered mortgage insurance premiums (MIP) in new Ginnie Mae mortgage-backed securities issuances, according to analysts. Of particular interest to investors is the share of borrowers with existing FHA-insured home loans who took advantage of an opportunity to refinance on advantageous terms under the FHA Streamline Refinance program, said analysts at Bank of America Merrill Lynch. Under the revised rules of the FHA Streamline Refi program, FHA-insured mortgages endorsed before June 1, 2009, were ...

A weakened mortgage revenue bond market and the unreliability of its primary and pool credit enhancement structure has prompted the Wisconsin Housing and Economic Development Agency to turn to FHA and Ginnie Mae to finance its affordable housing program. Launched in December last year, WHEDA’s $100 million FHA Advantage program is still in its infancy, generating less than $1 million a month. Although marketing has not been aggressive as it should be, Geoff Cooper, WHEDA director of single-family operations, said the housing finance agency will soon announce ...

VA Home Loan Program Celebrates 20-Millionth Loan Beneficiary. The Department of Veterans Affairs this week commemorated the 20-millionth recipient of a VA loan under the agency’s Home Loan Guaranty Program. Agency officials held a ceremony at the Woodbridge, VA, home of the loan’s recipient, Mrs. Elizabeth Carpenter, whose husband, Capt. Matthew Carpenter, passed away in 2010. Since 1944 as part of the original GI Bill of Rights, the VA has been providing guarantees to 30-year mortgage loans with low interest rates and has guaranteed ...

Fixed-rate mortgages comprised most of August’s FHA production, which totaled $22.1 billion, up 13.2 percent from July and 37.9 percent from a year ago, according to an Inside FHA Lending analysis of FHA data. FRMs accounted for 98.9 percent of new loans with FHA insurance in August. In-house originations made up 79.6 percent of new endorsements while purchase loans accounted for 56.1 percent of FHA originations during the month. Wells Fargo is the only top FHA lender to exceed the billion-dollar mark. In fact, the bank reported $2.2 billion in new FHA originations, 76.0 percent of which were produced in-house. The purchase mortgage share of Well’s total FHA originations was ... [2 charts]

The FHA Short Sale program may have cost the Department of Housing and Urban Development more than $1 billion in ineligible claims but only a portion may actually be recovered, according to a report from HUD’s Office of the Inspector General. A HUD OIG audit estimated that the department paid $1.06 billion in claims for 11,693 preforeclosure sales that did not meet FHA’s criteria for participation in the program. The OIG said it began a nationwide review of the short sale program after finding significant deficiencies in borrower qualifications during an audit of CitiMortgage’s preforeclosure sale claims last year. Auditors found ...

The House of Representatives this week overwhelmingly approved legislation that would help the FHA remain solvent and avoid a potential taxpayer bailout. Lawmakers passed the FHA Fiscal Solvency Act of 2012 by a vote of 402-7 on the heels of a Department of Housing and Urban Development report to Congress showing a slight second-quarter decline in the single-family Mutual Mortgage Insurance Fund. The report, which provides a quarterly view of the composition and credit quality of new insurance, showed FHA capital decreasing slightly over the last quarter from $32.3 billion to $31.6 billion. FHA’s total capital is ...

Cash flow from FHA’s business operations funded almost 70 percent of net claims losses over the last year, according to the Department of Housing and Urban Development’s quarterly report on the FHA Mutual Mortgage Insurance Fund programs. HUD paid $5.4 billion in claims in the second quarter of 2012, more than twice the amount of premiums collected during the period. As a result, net cash flows from business operations were negative $1.7 billion during the quarter. Premium collections contributed $8.1 billion over the last four quarters even as paid claims totaled $17.2 billion over the same period. This indicates that ...

SunTrust Banks, Inc. is planning to shift $3 billion of loans, including an undetermined number of delinquent Ginnie Mae loans and other nonperforming loans, to its held-for-sale portfolio and record a $375 million provision for mortgage repurchases in the third quarter of 2012. The moves are expected to strengthen SunTrust’s mortgage portfolio and put the company in a better position by improving its risk profile and balance sheet and stabilizing its capital ratios. The $3 billion transfer of loans to the held-for-sale (HFS) category will include ... (1 chart)

$7.5 Million FHA Mortgage Fraud Scheme. The Department of Justice has filed charges against top executives of a real estate brokerage for their participation in a mortgage fraud scheme that may cost the FHA $7.5 million in losses. Indictments were unsealed earlier this month in Manhattan federal court charging Mitchell Cohen and Erin Davis, the owner and sales manager, respectively, of Buy-A-Home, a real estate brokerage business in Queens, NY. The criminal charges follow a civil fraud lawsuit filed by the U.S. Attorney’s Office for the Southern District of New York last December against ...

Ginnie Mae is reportedly considering increasing its minimum net worth requirement in response to an onslaught of requests by smaller banks for new issuer approvals. Quoting agency officials, reports indicate that Ginnie Mae is being swamped with applications from smaller mortgage lenders seeking authority to issue agency-backed mortgage backed securities. With large aggregators like Bank of America, MetLife and Ally Financial opting out of the correspondent and reverse mortgage businesses, many smaller lenders lost access to the Ginnie Mae program. However, many of these lenders are stepping into the breach on their own or with partners to ...