Ginnie Mae has added a new metric to make it easier for approved issuers to track the prepayment rates of single-family loans underlying they have delivered into mortgage-backed securities. The new prepayment metric would enhance Ginnie’s Issuer Operational Performance Profile (IOPP) tool, which was launched in 2015 to help issuers measure their performance against the agency’s standards. The new tool is the latest move by Ginnie to ensure the integrity and market predictability of Ginnie MBS. The prepayment tool will be available to lenders beginning June 25. The announcement follows an agency administrative action last week against three VA lenders that were penalized for cherry picking and refinancing unseasoned VA loans not to benefit borrowers but to charge them higher fees. The lenders – Freedom Mortgage, SunWest Mortgage Co. and NewDay USA – were among nine issuers that ...

Now that Housing and Urban Development Secretary Ben Carson has sworn in a new FHA commissioner, reverse mortgage lenders are hoping to see some changes in the Home Equity Conversion Mortgage program. The National Reverse Mortgage Lenders Association is planning to ask FHA Commissioner Brian Montgomery for changes in the HECM program, particularly at the back end, to make it more profitable for lenders. Peter Bell, the group’s chief executive officer, believes there are opportunities to reduce the cost of the HECM program to the FHA fund by having better servicing procedures. “We would like to see certain loss mitigation procedures in the new HECM rules to be made available to all reverse-mortgage loans,” he said. Some of those procedures apply only to loans originated on or after the new rules became effective, such as “cash for keys.” Cash for keys is a cash offer by a lender to a ...

All home loans with a VA guarantee, including Interest Rate Reduction Refinance Loans, require a lender’s certification, according to the Department of Veterans Affairs. In recent guidance, the agency clarified that the lender certification requirement applies to all VA-backed loans, and is not contingent upon the type of VA loan. Jeff London, director of the VA Loan Guaranty Service, said there have been inquiries from lenders and the VA regional loan centers regarding the validity of the lender certification on an IRRRL. The lender certification is required on IRRRLs, whether or not underwriting is required, London clarified. Under VA rules, lenders must certify that the VA loans they originate comply fully with the law and meet VA’s underwriting standards. The IRRRL is a streamlined program that requires very little verification yet allows veterans to refinance at a lower rate based on their ...

VA lenders are offering a new mortgage product to help veterans purchase and renovate their homes or make necessary repairs through the refinance of an existing home. The VA renovation or rehabilitation loan program allows borrowers to purchase a home with a traditional VA loan and fund up to $35,000 in repairs and improvements. “This product is great for homebuyers looking for fixer-uppers,” said Patti White, president of Military Mortgage in Avon, CT. VA officials announced the new product during a lender conference in Miami last April and it was on lenders’ menu two weeks later. The VA renovation loan is a second loan much like the FHA 203(k) property repair and rehabilitation loan, according to White. Borrowers may finance up to 100 percent of the as-completed value of the home. Borrowers need a 620 minimum credit score to qualify. The 100 percent financing features reduced ...

The U.S. Department of Agriculture Rural Housing Service has issued guidance detailing requirements for refinancing its direct and guaranteed rural-housing loans. Direct and guaranteed are both Section 502 loan programs but are different from each other. The lender for guaranteed home loans is a privately owned thrift, bank or mortgage company, which is also the servicer of the loan. The lender for the direct program is the RHS, while USDA Rural Development, which includes RH, is the servicer. Guaranteed borrowers are capped at 115 percent of the area median income while income levels for direct borrowers must not exceed 80 percent of AMI. Guaranteed borrowers are not eligible for payment assistance, which can lower the interest rate on the mortgage to as low as 1 percent. The assistance is for direct borrowers and is based on borrower income as a percentage of AMI. Finally, borrower protections differ ...

Reverse mortgage lenders started out strong in the first three month of 2018 with a 19.2 percent increase in Home Equity Conversion Mortgage production from the previous period. HECM endorsements totaled $5.4 billion in the first quarter, with purchase reverse loans accounting for the bulk of originations, 81.9 percent. First quarter production was up 18.5 percent from the same period last year. Meanwhile, HECM mortgage-backed securities issuance totaled $2.97 billion for the quarter, down from $3.25 billion in the prior quarter, Ginnie Mae data showed. The top five HECM originators in sequential order – American Advisors Group, Reverse Mortgage Funding, One Reverse Mortgage, Liberty Home Equity Solutions, and Synergy One Lending – accounted for $1.66 billion, or 30.8 percent, of total production during the first quarter. American Advisors maintained its top ranking with $841.4 million of HECM loans, which ... [Charts]

Ginnie Mae this week warned that VA refinance loans, particularly Interest Rate Reduction Refinance Loans, may not be included in any new pool or loan package if they do not comply with the newly enacted law protecting VA borrowers from predatory lending. The agency announced new pooling guidance pursuant to the loan-seasoning provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act, which President Trump signed into law last week (See details of the new law below ). The changes affect issuances of Ginnie mortgage-backed securities on or after June 1, 2018, but do not affect MBS issued before that date, according to the guidance. However, lenders seeking a guarantee after June 1 may have to recalibrate their loan-origination platforms to exclude refis that do not meet the new law’s seasoning requirements, said the Structured Finance Industry Group. The ...

Provisions to protect VA borrowers from abusive lending are now in effect after President Trump signed into law a broad regulatory relief package last week. The VA measures are part of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which the U.S. Senate passed on March 14 and the House approved on May 22. The bipartisan measures became effective for VA loan applications taken on or after May 25, 2018. They were part of the bipartisan Protecting Veterans from Predatory Lending Act, which Sens. Thom Tillis, R-NC, and Elizabeth Warren, D-MA, introduced in January and later incorporated in S. 2155. The bill was designed to protect VA borrowers from loan churning or serial refinancing and specifically targeted the VA’s Interest Rate Reduction Refinance Loan program, where the churned VA loans ended up. According to the agency, such practices not ...

Industry trade groups are shopping lists of FHA priorities following last week’s Senate confirmation of Brian Montgomery as FHA commissioner and assistant secretary of housing at the Department of Housing and Urban Development. On May 23, the full Senate voted 74-23 to clear the former FHA commissioner for a return engagement after resolving a partisan block on all of President Trump’s nominees for top positions at HUD. Twenty-five Democrats joined 49 Republicans in approving Montgomery. He served as FHA commissioner under both the George W. Bush and Obama administrations. Montgomery was nominated initially in September 2017 and was approved by the Senate Banking Committee on Nov. 28 by an 18-5 vote. Under Senate rules, his nomination was returned to the president at the end of 2017. Montgomery was re-nominated in early January and was again approved by the ...

Officials at the government’s mortgage programs said that major investments in technology will make their programs more efficient and pay for themselves, during a panel session at the Mortgage Bankers Association secondary market conference last week in New York. Michelle Corridon, deputy director in the single-family housing guaranteed loan division of the U.S. Department of Agriculture, said her program’s focus now is on infrastructure and innovation. The USDA is instituting a technology fee on every closed loan starting in October, she said. The enhanced online system will include new screens for housing, which now shares a landing page with other rural programs. When it’s complete, the new system will handle the process from guaranty commitment through loan delivery. In another efficiency move, rural housing is “rolling up” processing chores to fewer offices so it doesn’t have ...