New research is helping foment pervasive rumors about a massive government refinancing of agency-backed mortgages intended to bolster – or replace – the underperforming Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac borrowers. Earlier this month, industry watchers began to speculate about possible HARP changes following a note by the Washington Research Group’s Jaret Sieberg – picked up by an American Enterprise Institute blog posting – that predicts President Obama will appoint a “housing advocate” to the Federal Housing Finance Agency via a recess appointment. Such an...

The Department of Housing and Urban Development has proposed to eliminate an outmoded appeals process for determining the maximum FHA mortgage loan limits in certain areas. Published in the Jan. 13 Federal Register, the proposed rule specifically would do away with regulations that allow HUD to set the area-based loan limits on a yearly basis and permit appeals of these loan limits. The appeals were once an important source of data for HUD because it allows any party to submit documentation in support of alternative mortgage limits if that party believes the limit set by HUD did not reflect the median house prices in an area. The loan limit appeals process was set ...

Bulk sales of real estate owned properties by Fannie Mae, Freddie Mac and the FHA that would become rental properties may help relieve pressure from an excess of inventory for sale, but it will require a change in how the agencies have traditionally handled their foreclosure inventory. The Federal Reserve earlier this month made a strong case for an REO-to-rental strategy, arguing that even if it costs the agencies a little more in foreclosure losses it could help the broader housing market by firming up prices and shifting more units to meet growing demand for rental housing. Many private...

Despite lower mortgage rates, MBS prepayment speeds slowed across the board in December, particularly for the recent low coupons, while speeds for higher coupons were up slightly, according to securitization analysts. Researchers varied slightly in their estimates, saying speeds for 30-year Fannie Mae securities slowed 2-6 conditional prepayment rate for the recent low coupons (3.5-4.5 percent from 2011 and 2010). Barclays Capital analysts attributed the slowdown to reduced refinancing activity during the December holiday season. The weighted average CPR for all Fannie Mae MBS declined to...

Veterans will be able to borrow up to a possible maximum of $625,500 in some high-cost areas to purchase or refinance a single-family house under the Department of Veterans Affairs’ loan limits for 2012. The amount of mortgage a veteran could qualify for would depend on the median county price and the VA’s new method for calculating loan limits on a county-by-county basis. In Hawaii, Guam, Alaska and the Virgin Islands, limits will range from $625,500 to as much $938,250, the agency said. A list of VA county loan limits has been posted on the agency’s web site. The VA does not have a maximum loan limit...

The number of FHA endorsements grew by a whisper in November, up 0.2 percent to 88,206 from 88,060 in October, and down a screaming 32.8 percent from last year, according to Inside FHA Lending’s analysis of agency data. Endorsements for the month totaled $14.5 billion, with purchases and first-time homebuyers leading the way. Approved lenders accounted for the bulk of originations during the month, 79.8 percent. Purchase transactions comprised 64.8 percent of total originations for the month. An estimated 96.1 percent of loans insured by FHA were fixed-rate mortgages. Purchase loans with FHA...

The FHA will continue to play a critical role in the nation’s housing markets in 2012 even as it tries to balance the need to extend credit while reducing its market share to open the way for private capital to return to the mortgage market, according to industry observers. That means walking a tightrope in trying to keep the Mutual Mortgage Insurance Fund actuarially sound while trying to avoid piling on more fees and additional restrictions, which could hamper housing recovery, observers said. “We can’t have an economic recovery without a housing recovery,” said Brian Chappelle, a mortgage industry consultant. “The philosophical debate about the role of government in housing should be ...

Bank of America and other large mortgage servicers are seeking a meeting with the Federal Housing Finance Agency to address concerns about the latest version of the Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac borrowers. Since HARP was first launched in 2009, it has failed to meet expectations. The government quickly expanded the program to include loans with current loan-to-value ratios of up to 125 percent, which accounted for a very small share of business. Under HARP 2.0, which went into effect this month but won’t be fully up to speed until the second quarter of...

Senate Republicans have threatened to block the confirmation of Carol Galante as head of the FHA until Senate Democrats come up with a plan to deal with Fannie Mae and Freddie Mac. The Senate Committee on Banking, Housing and Urban Affairs this week voted 13 to 9 to send Galante’s nomination to the Senate floor amid Republican calls to reject the nomination. Some Republicans expressed concern over the health of the FHA Mutual Mortgage Insurance Fund, citing a recent independent actuarial study that reported a precarious drop in the fund’s excess capital reserve for unexpected losses. Sen. Jim DeMint, R-SC, said he did not think ...

The recent change in the FHA’s maximum loan limits would have relatively limited impact for current borrowers trying to refinance, according to analysts. FHA loans insured prior to Oct. 1, 2011, were already grandfathered in for streamlined refinancing regardless of loan size, said analysts with J.P. Morgan Securities. In addition, the analysts said they do not expect many conventional jumbo-to-FHA refinances in this market segment because the mortgage insurance premiums make FHA loans less attractive. Last month, President Obama signed an appropriations bill into law, reinstating the pre-Oct. 1 formula for calculating the “temporary” loan limits for high-cost areas, which is ... [With one chart]