The FHA is developing standards that would allow FHA financing on homes with existing Property Assessed Clean Energy liens going forward. Specifically, the guidance would require subordination of PACE financing to first-lien FHA mortgages. The FHA is also working on a monitoring mechanism to track the number of PACE loans with FHA insurance in the future, said a HUD spokesman. Mortgage market analysts say FHA’s action could lead to broader adoption of the PACE program for FHA-insured single-family homes. The Mortgage Bankers Association, in a statement, applauded the move. “This modification should allow some homeowners to install energy improvements in their home but not impede the rights of the first lien, something the original PACE program failed to consider,” said David Stevens, MBA president and CEO. PACE programs allow local governments to raise bond-funded financing to ...

The Department of Veterans Affairs has adopted a final rule aligning the Home Loan Guaranty Program’s disclosure and interest-rate adjustment requirements with the servicing provisions in the Truth in Lending Act, as recently revised by the Consumer Financial Protection Bureau. The rulemaking will ensure VA remains consistent with other consumer finance and housing regulations governing adjustable-rate mortgages, the agency said. The rule is effective Sept. 11, 2015. The VA adopted without the change the rule as proposed on March 30, 2015. In this rule, VA adopted TILA’s minimum 45-day look-back period to clarify that lenders making VA ARMs must meet the statute’s minimum notification requirements. Specifically, disclosures and notifications must be provided to borrowers before an interest-rate adjustment. Lenders are required to adjust ARM rates based on the most recent ...

The FHA’s overall delinquency rate declined in the second quarter of 2015, although late payments increased in the 30-day and 60-day categories on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest national delinquency and foreclosure survey. The FHA, on the other hand, reported some variances in its delinquency data. The 90-day plus delinquency rate in June was down 30 basis points from March’s 6.42 percent on an unadjusted basis. Considering seasonal factors, the decline was just 2 bps. Results of the MBA survey showed FHA’s overall delinquency rate at 9.00 percent in the second quarter, down from 9.10 percent in the previous quarter, as the serious delinquencies (90 days or more) fell over the same period. On the other hand, the 30-day and 60-day delinquency rates for FHA loans were up by a combined 10 bps from the ...

Poor oversight of lenders participating in the Section 203(k) Rehabilitation Loan Mortgage Insurance Program has increased the risk to FHA’s Mutual Mortgage Insurance Fund by more than $1.2 million for 40 active loans, according to the Department of Housing and Urban Development’s Office of the Inspector General. HUD’s Office of Housing questioned the findings of its independent auditors, saying that 203(k) lenders are monitored closely despite the limited staff and resources. The IG recommended to HUD that lenders be required to support or indemnify the department for any future losses on the 40 loans and to reimburse actual losses on two 203(k) loans totaling $83,332. An audit of HUD’s oversight of the program uncovered alleged weaknesses in the monitoring of lenders for compliance with the 203(k) program. In addition, HUD did not always ensure that loan-to-value ratios were ...

Two FHA lenders in Texas have agreed to pay a total of $469,419 in civil money penalties to resolve government allegations they charged bogus fees to borrowers to inflate the purchase amount of newly built manufactured housing. Among 11 alleged violations of FHA rules, the Department of Housing and Urban Development’s Mortgagee Review Board accused American Home Free Mortgage of Prosper, TX, of artificially increasing mortgage costs by an average of $12,000 per loan through improper fees. The fees were paid allegedly to a company owned and operated by AHFM’s sales manager. In addition, HUD alleged there were multiple violations of quality and annual certification requirements. As part of the settlement agreement, without admitting to any fault or liability, AHFM agreed to pay a $169,419 fine and to the permanent withdrawal of its FHA approval. In June 2014, the MRB also heard a ...

The FHA will not issue a new case number for any FHA-to-FHA refinance if the current mortgage has a repair or rehabilitation escrow account in FHA Connection. The change, which is one of several updates to FHA Single Family Policy Handbook 4000.1, applies only to FHA streamline refis. It aims to ensure that escrow funds of the mortgage being refinanced are properly applied as well as conform to system requirements. The updated sections become effective on Sept. 14, 2015. Another change clarifies that the payoff statement for the mortgage being refinanced is the only document required when calculating the maximum mortgage amount for simple refi transactions. In addition, guidance for loan-to-value limits for cash-out refis has been updated to clarify that the 85 percent LTV restriction applies only to cash-out refis. HUD also noted that appraisers have flexibility in regards to when inspections should ...

FHA Begins Registration of Lenders to Prepare their Transition to the EAD Portal. Lender registration for the transition phase of the new Electronic Appraisal Delivery portal began on Aug. 18. Lenders may select any of the seven onboarding phases, which FHA has established to ensure that lenders have more time to work within the EAD portal to ensure that their systems, data flow and operational process meet portal requirements before the June 27, 2016, mandatory-use date. Although lenders may enter at any phase they choose, the FHA strongly encourages lenders to register for the earliest onboarding phase, and to do it as soon as possible. That would give them more time to get ready for the full transition, the agency said. The first phase begins on Oct. 15, 2015, with additional phases beginning each month and running through the first half of 2016. Information on the onboarding phases as well as ...

Sellers saw a modest increase in VA loans delivered to Ginnie Mae in the second quarter of 2015, most of which were streamline refinance loans, but FHA definitely took the cake, according to an Inside FHA/VA Lending analysis of agency data. Approximately $39.1 billion in VA purchase and refi loans were placed in Ginnie Mae pools in the second quarter, up 11.8 percent from the prior quarter. Of that amount, $20.9 billion were VA refinances, up 2.1 percent from the first quarter. Some 52 percent of the VA refis were originated in-house while correspondents accounted for 30.7 percent. Brokers brought in 17.3 percent of the securitized VA refi loans. VA purchase loans underlie an estimated $18.2 billion in Ginnie mortgage-backed securities in the second quarter, 48.4 percent of them retail. That number was up 25.5 percent from the previous quarter. VA loan correspondents were busy as well, accounting for ... [ 2 charts ]

The fastest-growing sectors of the mortgage market during the second quarter of 2015 were jumbo loans and government-insured production, according to a new Inside Mortgage Finance ranking and analysis. The conventional-conforming segment remains the biggest piece of the mortgage market, accounting for 52.8 percent of originations during the second quarter. Back in early 2013, when refinance activity accounted for three of every four new home loans, the conventional-conforming share was 68.1 percent. Lenders generated...[Includes two data charts]

FHA/VA lender Castle & Cooke Mortgage is embarking on a major expansion that could boost their standing in the government-backed market if things work out as planned. The Salt Lake City-based retail lender is in the midst of an aggressive expansion plan to be in 48 states by the end of 2016, according to Adam Thorpe, who was named president and chief operating officer in late 2014. C&C’s government-backed lending activities are mostly in the West with licenses to operate in 18 states. Recently the company, which entered the mortgage market in 2005, opened a new branch office in Anaheim, CA, bringing to 36 the number of C&C branch offices across the country. Orange County and the Southern California housing market are among the priciest in the nation, and the high demand and lower inventory in those areas can be good for government and ...