The FHA in 2015 posted significant shares overall among insured loans, except in purchase mortgages where private mortgage insurance enjoyed a slight edge over government-insured products, according to an Inside FHA/VA Lending analysis of agency loan-level mortgage-backed securities. The FHA accounted for the bulk of insured loans in mortgage-backed securities issued last year, writing coverage on an estimated $236.3 billion in mortgage originations, or 38.8 percent of all insured mortgage loans in 2015. Approximately $608.8 billion in securitized mortgages received...[Includes one data table]

The Obama administration’s recently proposed federal budget is projecting a $61 million profit for the U.S. Department of Agriculture’s Section 502 single-family guaranteed housing program in FY 2017. The president’s budget proposal projects $900 million in new direct USDA rural housing mortgage loans in fiscal 2017, the same number of loans projected for fiscal 2016. For 2017, the USDA is seeking...

Activity in the Fannie Mae/Freddie Mac refinance program for underwater borrowers continued to decline in the fourth quarter of 2015, according to the Federal Housing Finance Agency. The FHFA said the two government-sponsored enterprises securitized 21,079 loans originated under the Home Affordable Refinance Program during the fourth quarter. That was down 18.4 percent from the previous quarter and brought year-to-date production to just 110,113 loans, a 48.2 percent decline from 2014. HARP accounted...[Includes one data table]

Fannie Mae and Freddie Mac last year securitized just $14.40 billion of refinance mortgages with high loan-to-value ratios and no private mortgage insurance coverage, according to a new analysis by Inside MBS & ABS. That was down 51.7 percent from the total for 2014 and amounted to a drop in the bucket compared to the high-water mark for the Home Affordable Refinance Program back in 2012. The sharpest downturn was...[Includes two data tables]

Sellers delivered $35. 2 billion in VA loans into Ginnie Mae pools in the fourth quarter of 2015, down 15.0 percent from the previous quarter, according to Inside FHA/VA Lending’s analysis of Ginnie loan-level data. Retail lenders and correspondents accounted for the bulk of VA loans securitized during the quarter. Retail accounted for 45.8 percent of VA purchase loans, enjoying a slight edge over correspondents, which comprised 45.5 percent of securitized VA loans. The broker share of securitized VA purchase loans was 8.7 percent, down 21.2 percent from the third quarter. Meanwhile, retail accounted for 53.8 percent of Ginnie mortgage-backed securities backed by VA refinance loans in the fourth quarter, while correspondents’ share was down to 28.5 percent. The broker channel accounted for 17.7 percent of VA loans securitized during the period. The average FICO score on Ginnie VA loans in the ... [1 chart]

The FHA Mutual Mortgage Insurance Fund is projected to generate $9.1 billion in profits in FY 2017 but officials say they will not be reducing mortgage insurance premiums any time soon. Released this week, the White House’s proposed budget projects FHA will insure $204 billion in new forward, single-family mortgages with a negative credit subsidy of 4.42 percent for each loan, resulting in a projected profit of $9.1 billion. In fiscal 2016, the program is expected to generate $7.7 billion in profits. Separately, for the Home Equity Conversion Mortgage program, the proposed budget is projecting $18.5 billion in new reverse mortgage loans with a negative credit rate of 0.33 percent, netting $61 million in profits. During a budget briefing, Housing and Urban Development Secretary Julian Castro said there are no plans to change the current mortgage insurance premium. “We want to ensure our ...

While they are effective, the VA’s Frequently-Asked-Questions on the qualified mortgage interim final rule provide helpful guidance on certain aspects of Interest Rate Reduction Refinance Loans (IRRRLs) origination as they relate to the VA QM rule, according to an analysis by the Washington, DC, law firm K&L Gates. The intricacies of IRRRL treatment under the interim final rule suggest the product may continue to be subject to ambiguities disproportionate to its limited role in the mortgage marketplace, wrote authors Kristie Kully and Eric Mitzenmacher, attorneys with the firm. VA’s interim final rule provides that all VA loans are QMs. The authors note that while most VA loans are safe harbor QMs under the rule, certain streamlined refinance loans (IRRRLs) are entitled only to a rebuttable presumption. Under the VA interim final rule, an IRRRL is deemed to have safe harbor QM status if the ...

Certain aggregators of FHA loans are reportedly refusing to purchase FHA streamline refinance loans, fearing shoddy underwriting on the original loan might raise compliance issues down the road. How widespread is the problem is unclear but an industry consultant, who was tipped off by other aggregators, said the problem seems more of a servicing nature, rather than origination. Prior to 2010, FHA lenders originated many streamline refis with seller-funded downpayment assistance. Many of these loans ended up with high default rates, prompting FHA to eliminate seller-funded DPA and to tighten the FHA streamline refi program. Streamline refi originations fell and the program saw very little activity until the FHA revived the program with changes during the crisis to spur lending and help FHA borrowers refinance. Streamline refis do not require full underwriting. The basic requirements are that the mortgage to be refinanced must be FHA-insured, current on the ...

Rep. Elijah Cummings, D-MD, ranking member of the House Committee on Oversight and Government Reform, and Sen. Sherrod Brown, D-OH, ranking member of the Senate Committee on Banking, Housing and Urban Affairs, earlier this month expressed concern about the sale of nonperforming loans to private investors without sufficient protections for homeowners and neighborhoods. Both lawmakers fear that FHA may not be providing enough incentives to servicers to modify ailing mortgages and that certain investors may be more interested in foreclosure than a cure. The influx of private investors has crowded out first-time homebuyers and raised concerns about the long-term effects of investor-owned homes in communities where foreclosures run high. In a joint letter, the two lawmakers sought information from the Department of Housing and Urban Development about ...

House Approves Legislation Streamlining FHA Condo Rules, Allowing DE Lenders for USDA. Housing reform legislation that would ease FHA restrictions on condominium financing and allow delegation of loan approval authority to qualified lenders under the U.S. Department of Agriculture’s rural housing programs passed the House last week by a vote of 427-0. Described as an FHA reform bill, H.R. 3700, the “Housing Opportunity Through Modernization Act,” would modify FHA requirements for condo mortgages by streamlining FHA’s project certification requirements to qualify condominiums for FHA financing as well as making recertification less burdensome. H.R. 3700 would also expand the USDA’s Section 502 Guaranteed Rural Housing Loan Program for single families by delegating loan-approval authority to certain participating lenders. FHA and VA loan programs already ...