Early indicators suggest that private mortgage insurers saw an uptick in new business during the third quarter, a time when most mortgage production indicators were losing momentum. Fannie Mae and Freddie Mac securitized a total of $58.18 billion of single-family loans that were insured by private MIs during the third quarter, according to a new Inside Mortgage Finance analysis of loan-level detail. That was up 3.7 percent from the second quarter at a time when total production by the two government-sponsored enterprises declined by 15.6 percent. Private MI-insured loans accounted...[Includes two data charts]

SunTrust Banks has agreed in principle with the Department of Housing and Urban Development and the Department of Justice to settle certain FHA-related claims. Separately, a federal judge in Texas refused to dismiss a government suit against two FHA lenders accused of manipulating HUD into insuring poorly underwritten loans which later resulted in massive losses to the agency. Announced on Oct. 10, SunTrust’s agreement with the government agencies is part of a broader resolution of certain legacy matters and repurchase agreements with Fannie Mae and Freddie Mac. SunTrust has agreed to settle certain ...

The Department of Housing and Urban Development’s proposed “qualified mortgage” rule attaches certain conditions to QM treatment that may complicate matters for participating lenders, said attorneys with K&L Gates in Washington, DC. On Sept. 30, the Department of Housing and Urban Development published its own proposed QM rule for FHA loans. The CFPB rule takes effect on Jan. 14, 2014, and will apply to FHA loans until HUD issues a final rule. Under the CFPB rule, many FHA loans would not qualify for the rule’s safe harbor because the higher mortgage insurance premiums would make them “higher priced mortgage loans.” Thus, in order to ...

The U.S. Court of Appeals for the First Circuit has affirmed a district court’s dismissal of a putative class action alleging that a lender improperly required FHA borrowers to buy and maintain higher flood insurance coverage than that indicated in their mortgage contracts. According to an analysis by the Washington law firm BuckleySandler, the ruling from an equally divided en banc court allows mortgage lenders to require borrowers to maintain flood insurance equal to the replacement value of their homes. In Kolbe v. BAC Home Loans Servicing, LP, No. 11-2030, 2013 WL 5394192 (1st Cir. Sept. 27, 2013), plaintiff Stanley Kolbe contends ...

FHA loan originations declined by 10.5 percent in August from July, following a downward trend that seems to suggest that private mortgage insurance companies are gaining the upper hand against their biggest government-backed competitor. Volume dropped to $16.8 billion in August from $18.8 billion in July, and from $22.1 billion a year ago, according to Inside FHA Lending’s analysis of FHA data. Purchase-mortgage originations comprised 68.7 percent of FHA business for the month as rising interest rates slowed refinancing activity. Despite the increase in purchase lending, FHA lenders noted it was ... [1 chart]

The MGIC Investment Corp. reported its second straight profitable quarter in 2013 and another increase in new insurance written. While the numbers may not yet indicate a trend, it certainly appears that the Milwaukee-based mortgage insurer is slowly but consistently showing improvement in its performance since posting a net loss of $246.9 million for the same quarter a year ago. MGIC reported net income of $12.1 million in the third quarter and $12.4 million in the second quarter, compared with a net loss of ...

Despite continuing growth in purchase-mortgage production, Fannie Mae and Freddie Mac saw a marked decline in their overall business during the third quarter of 2013, according to a new ranking and analysis by Inside Mortgage Finance. The two government-sponsored enterprises securitized $284.9 billion of single-family mortgages during the third quarter, a 15.6 percent drop from the previous three-month period. It marked the lowest quarterly production for the GSEs since the second quarter of last year and it was attributable to a sharp drop in refinance activity. Fannie and Freddie securitized...[Includes three data charts]

Fannie Mae plans to issue a $675 million risk-sharing securitization in a transaction that likely will hit the market by mid-October, according to potential investors who were briefed on the government-sponsored enterprise’s plans. Market participants said Fannie has contemplated issuing two such transactions by year-end, but the company isn’t talking about specifics, at least not yet. Still, the GSE is laying...

The Department of Housing and Urban Development this week proposed its own “qualified mortgage” rule for FHA-insured mortgage loans that builds off the existing QM rule finalized by the Consumer Financial Protection Bureau earlier this year. The proposed rule aligns with the ability-to-repay criteria in the Truth in Lending Act as required by the Dodd-Frank Act. Once the proposal becomes final and takes effect, it would replace the CFPB’s rule for FHA loans. The DFA has set a seven-year timetable for FHA, the VA and the Rural Housing Service to promulgate their own QM rules. HUD’s proposed QM rule would ...

Overall FHA production saw little change in the second quarter of 2013 from the previous quarter, with the fixed-rate, 30-year product, refinances and jumbos weakening somewhat during the period, according to Inside FHA Lending’s analysis of FHA data. FHA endorsements dropped 0.7 percent to $63.2 billion from $63.7 billion on a quarter-to-quarter basis. It is also the second time the numbers have slipped since the fourth quarter, when new endorsements totaled $64.0 billion. During the quarter, the top FHA lenders saw their total production drop by ... [2 charts]