FHA this week announced a 6.8 percent increase in loan limits nationwide for 2018 with 26 counties seeing increases above the national rate. In high-cost areas, the loan-limit ceiling will rise to $679,650 from $636,150 in 2017, while the floor will increase to $294,515 from $275,665. In addition, the national mortgage limit for Home Equity Conversion Mortgages (HECMs) or reverse mortgages will rise to $679,650 from $636,150. FHA regulations do not allow HECM loan limits to vary by metropolitan statistical area or county. Instead, the single limit applies to all mortgages regardless of where the property is located, the agency explained. In between the floor and the ceiling is a broad band of loan limits for single-family forward mortgage loans set at 115 percent of median house prices. The forward limits vary according to MSA and county. The changes in the loan limits are the result of ... [ Chart ]

Congress on Thursday passed a stopgap-spending bill to prevent a potential government shutdown and to give lawmakers time to negotiate crucial issues. The House voted 235-193 to pass the measure. A short time later, the Senate quickly approved it 81-14. The temporary spending bill will keep the government running through Dec. 22. The continuing resolution or CR, that has kept the government open would have expired on Dec. 8. Both the House and Senate are scheduled to adjourn on Dec. 15. Congress will need to pass a final appropriations bill or another continuing resolution to keep the government operating after Dec. 22. Despite differences over tax reform, FY 2018 budget, immigration, health care and other issues, lawmakers do not want a shutdown, mortgage industry sources said. Republicans, in particular, hope to enact their $1.5 trillion tax package by Christmas. On the other hand, ...

The Senate could vote on Brian Montgomery’s nomination as FHA commissioner and assistant secretary for housing before the end of the year. The nomination appears to be on a fast track to get Montgomery, a mortgage industry and FHA veteran, on board at the Department of Housing and Urban Development by early January, according to an industry participant who requested anonymity. Last week, the Senate Committee on Banking, Housing and Urban Affairs voted 18 to 5 to advance Montgomery’s nomination. Twelve Republicans and six Democrats voted in favor of the nominee. Sens. Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, opposed Montgomery’s nomination due to concerns that his work as a private consultant with the mortgage industry might influence his judgment as FHA commissioner. Montgomery, a principal with The Collingwood Group, is no stranger to the job. He served as ...

FHA single-family endorsements rose 2.0 percent in the third quarter from the prior quarter as more borrowers took out purchase loans and nonbanks remained in control of the market during the period. The FHA endorsed $62.1 billion of forward mortgages during the third quarter, which brought total production over the first nine months of 2017 to $182.7 billion (excluding reverse mortgages), a 2.5 percent decline from 2016. Fixed-rate loans continued to comprise nearly all of FHA’s business. Adjustable-rate endorsements totaled $935.3 million for the first nine months of 2017, up from $701.7 million a year ago. FHA purchase activity was up 4.4 percent to $48.5 billion in the third quarter while annual volume increased 2.6 percent from 2016. Purchase loans accounted for 73.6 percent of total FHA endorsements for the nine-month period. Of the $182.7 billion of FHA loans endorsed during the ... [Charts]

Any chance of a mortgage-insurance premium reduction in the near future has dimmed in the wake of an actuarial report placing the FHA insurance fund on shakier ground at the end of FY 2017. One clear thing from the report released on Nov. 15 was that FHA’s flagship single-family home mortgage program continued to grow stronger with an economic net worth of $38.4 billion in fiscal 2017. In contrast, problems persisted in the Home Equity Conversion Mortgage portfolio, driving the program’s economic value down by another $6 billion to negative $14.5 billion. The drag HECM losses inflicted on the MMIF has renewed calls to separate the ailing portfolio from the fund, which can only be accomplished by legislation. Right now, the reverse mortgage issue is not even on Congress’ legislative agenda. HECM losses also caused the fund’s economic net worth and capital reserve ratio to decline in fiscal year ...

The Department of Veterans Affairs and the Consumer Financial Protection Bureau have issued a joint warning to servicemembers and veterans about VA refinancing offers that sound too good to be true. There is a good chance that borrowers with a VA loan have already received unsolicited offers to refinance their mortgages even just months after closing, the agencies said in their first “warning order” (WARNO). Many of these refi solicitations promise extremely low rates, thousands of dollars in cash back, skipped mortgage payments, no out-of-pocket costs and no waiting period, the agencies noted. The VA and the CFPB said lenders offering VA refinances may use aggressive and potentially misleading advertising and sales tactics. “Lenders may advertise a rate just to get you to respond or you may receive a VA mortgage refi offer that provides limited benefit to you while adding thousands of dollars to your loan balance,” the agencies warned. Even though the VA prohibits a lender from advertising skip payments on ...

A former FHA commissioner has recommended raising the agency’s capital reserve ratio to 3 percent, to make FHA stronger and more resilient. Carol Galante, who served two years as FHA commissioner and assistant secretary for housing in the second term of the Obama administration, laid out her proposal along with other recommendations in a paper that she co-authored. Housing-finance reform without a retooled FHA could threaten families’ access to homeownership and increase risk to taxpayers, contrary to the goals of reform, said Galante, currently the faculty director of the Terner Center for Housing Innovation at University of California Berkeley. In her paper, Mission Critical: Retooling FHA to Meet America’s Housing Needs, Galante spelled out the changes necessary to help FHA perform its complementary and countercyclical role in the nation’s housing markets. Galante called for ...

Ginnie Mae called on issuers to ensure that the data they submit are accurate following the discovery of erroneous payment reports. The agency said it has noticed discrepancies in the reporting of the first payment date on loan modifications in violation of Ginnie guidelines. Specifically, the first payment date some issuers reported as part of the loan-delivery data did not match the date submitted for the same mortgage loan as part of issuers’ monthly report of pool and loan data. Ginnie blamed the errors either on loans set up incorrectly for servicing or faulty data issuers had reported to the Department of Housing and Urban Development. Guidance issued by Ginnie on Nov. 14 reminded issuers to report the first scheduled payment date of the re-amortized loan when reporting the first payment date for modified mortgages through either the GinnieNET or the Reporting and Feedback System. The date ...

Mortgage banker David Kittle, a candidate for Ginnie Mae president, has informed the White House and Housing and Urban Development Secretary Ben Carson that he is no longer interested in the position, according to industry sources. Kittle, a founding partner and vice chairman of the Mortgage Collaborative, an industry vendor, could not be reached for comment. Kittle was first approached by the White House nine months ago about the job. A background check on the potential nominee was reportedly underway but he was never officially nominated. The industry veteran began his mortgage-banking career as a loan officer with American Fletcher Mortgage Co. He is a past chairman of the Mortgage Bankers Association, completing his term in October 2009. A Republican, he also once served as president of the Kentucky Mortgage Bankers Association. Kittle’s withdrawal leaves the ...

Congress and the FHA should avoid undertaking policy changes that would further weaken the agency’s ability to cover insurance losses and potentially lead to another taxpayer bailout, according to a recent analysis by The Heritage Foundation. THF analyst John Ligon and Norbert Michel, a research fellow, said FHA policy reforms should ensure that the agency maintains a limited role in the housing finance system. FHA should make way for private capital to enter the market and serve the housing needs of American households, they added. FHA can accomplish such policy goals by lowering its loan limits and adequately pricing insurance for borrower risk, the analysts said. In addition, Congress should ensure that FHA borrowers are required to maintain mortgage insurance over the full life of the loan as required currently by the Department of Housing and Urban Development, said ...